Rebecca Holland, a public school employee, sued Elevance Health, Inc. (formerly Anthem, Inc.) alleging that its health insurance plan discriminated against enrollees with obesity in violation of Section 1557 of the Affordable Care Act. The plan excluded coverage for weight-loss medications like Wegovy and Contrave under a section titled 'Bariatric Surgery / Morbid Obesity.' Holland, who was diagnosed with obesity and prescribed these medications by her doctors, was denied coverage. She filed a putative class action claiming the exclusion violated federal law by discriminating based on her disability. The district court granted Elevance's motion to dismiss, ruling that Holland's allegations were conclusory and that the exclusion applied neutrally to all enrollees regardless of disability status. Holland appealed, arguing the exclusion constituted intentional, proxy, and disparate impact discrimination.
The First Circuit reviewed the dismissal de novo, accepting Holland's well-pleaded facts as true but finding them insufficient to state a plausible claim. The court analyzed three theories of discrimination under Section 1557, which incorporates the Rehabilitation Act's prohibition on discrimination 'solely by reason of' disability. First, regarding proxy discrimination, the court noted that while some circuits recognize this theory, Holland failed to plead a sufficiently close 'fit' between the exclusion and disability. The court explained that the medications excluded are FDA-approved not only for obesity but also for overweight individuals with weight-related conditions like high blood pressure or diabetes. Because the exclusion applies to a broader group than just those with disabling obesity, Holland could not plausibly allege that the policy was a proxy for disability discrimination. Second, the court addressed intentional discrimination. Holland argued the plan was facially discriminatory and that Elevance acted with deliberate indifference. The court rejected the facial discrimination claim because the exclusion appeared in a section titled 'What's Not Covered Under Your Prescription Drug… Pharmacy Benefit,' indicating it applied to any drug 'mainly used for weight loss,' regardless of the underlying condition. Regarding deliberate indifference, the court held that Holland failed to allege that Elevance knew obesity was a federally protected disability or that the exclusion was substantially likely to harm protected rights. The court emphasized that deliberate indifference requires more than negligence or benign neglect; it requires knowledge of the harm and a failure to act. Finally, the court rejected the disparate impact claim. Citing the Supreme Court's decision in Alexander v. Choate, the court explained that Section 504 does not guarantee equal results but rather 'meaningful access' to benefits. Holland failed to allege facts defining the scope of the benefit guaranteed under the ACA or showing that the exclusion denied meaningful access to that specific benefit. The court concluded that a plan excluding a specific treatment for all enrollees does not disparately impact disabled individuals by denying a benefit it never offered to anyone.
The decision affirms the district court's dismissal, leaving the health plan's exclusion of weight-loss medications in place. It clarifies that under current First Circuit precedent, a health insurer's neutral exclusion of a specific class of drugs does not automatically constitute disability discrimination. The ruling leaves open the question of whether obesity is a protected disability in all contexts but emphasizes that plaintiffs must plead specific facts showing a close nexus between the policy and disability, or knowledge of the disability status by the insurer, to survive a motion to dismiss. The case is remanded to the district court with instructions to dismiss the complaint.
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