Trial Court Properly Granted Insurer’s Motion for Summary Judgment in Class Action Challenging Infertility Treatment Benefits because California Law Requires only that Blue Cross “Offer” such Coverage on Terms Negotiated with Employer, not that the Insurance Benefits Provide “Full” Coverage for Infertility Treatments California Appellate Court Holds
Plaintiff filed a putative class action against Blue Cross of California alleging for violations of California’s Unfair Competition Law (UCL) and false advertising; specifically, the class action complaint alleged that California law required Blue Cross to offer to provide insurance coverage for infertility treatments, but that it only offered “to pay up to $2,000 a year for half the cost of each group member’s treatment for infertility.” Yeager v. Blue Cross of California, 175 Cal.App.4th 1098, 96 Cal.Rptr.3d 723, 723-24 (Cal.App. 2009). According to the allegations underlying the class action, plaintiff “could not become pregnant without medical assistance” and the “limited infertility treatment [covered by the insurance policy] proved ineffective.” Id., at 724. She therefore filed her class action against Blue Cross, id. The theory underlying the class action was that Blue Cross was required to provide “full” coverage for infertility treatments, id., at 725. Defense attorneys moved for summary judgment on the ground that California law does not require full insurance coverage for infertility treatments and that it complied with California law. Id., at 724. The trial court agreed and entered judgment in favor of Blue Cross, id. Plaintiff appealed, and the California Court of Appeal affirmed.
The Court of Appeal explained that the statute at issue – California Health & Safety Code section 1374.55 – requires only that insurers “offer” coverage for infertility treatment “under those terms and conditions as may be agreed upon between the group subscriber and the plan.” Yeager, at 725 (quoting § 1374.55) (italics added). Plaintiff argued that “only about 15 percent of couples suffering infertility can be successfully treated for less than $4,000” – the relevant figure considering the plan’s $2,000 cap and 50% co-pay – so the benefits afforded were essentially illusory, id. The appellate court found, however, that “[plaintiff’s] argument for full coverage finds no support in the statute’s language,” id. The Court of Appeal also rejected plaintiff’s argument that the preamble to § 1374.55 supports her position, id., at 725-26. The appellate court held that “a statute’s preamble can be illuminating if a statute is ambiguous” but “a preamble is not binding” and “many not overturn the statute’s language.” Id. (citation omitted). Put simply, “[t]he Legislature knows how to establish a health plan’s coverage and costs when it chooses,” as evidenced by California law mandating coverage for mental health in contrast to merely offering coverage for infertility treatments. Id., at 726-27. Accordingly, the Court affirmed the judgment of the trial court. Id., at 730.