• Increasing exposure to costly liability lawsuits will
hurt Americans who today have health benefits. They'll face
higher health premiums, possible loss of coverage and lower
quality. Only plaintiffs' lawyers will benefit from this
expansion of liability.
• Bill proponents say it has an exception to protect
employers from liability. But an analysis by the law firm of
Schnader, Harrison, Segal & Lewis identifies an
exception to the exception. The "Exception for
Employers and Other Plan Sponsors," which purportedly shield
employers against the liability expansion, is trumped by a
"Special Rule." The "Special Rule" invokes liability when an
employer retains "discretion" to help resolve benefits
claims. The bill gives little protection against punitive
damages awards. In other words, there's effectively no
employer carve-out.
• The Schnader, Harrison analysis concludes:
[T]he Dingell-Norwood bill would dramatically change the way that
group health benefits claims are litigated in the United
States. State personal injury law would come to dominate
virtually all aspects of managed care. Employers would be
subject to state law causes of action, replete with jury trials,
extra-contractual damages and punitive damages. It would be
an entirely new day in this aspect of employee benefits law.
Anyone who claims the contrary is simply failing to comprehend the
thrust of the legislation."
• With increased liability exposure, 57 percent of small
employers would likely stop offering health benefits altogether,
according to a survey. Translation: Many working
Americans who now have health coverage would become
uninsured.