Verizon Anti-Assignment Clause Upheld by 11th Cir.

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

Jan. 12 — The anti-assignment clause in Verizon Communications Inc.'s welfare benefit plan bars an out-of-network health-care provider's claims under ERISA to recover unpaid benefits, the U.S. Court of Appeals for the Eleventh Circuit ruled.

In affirming the district court's decision to dismiss the provider's complaint against Verizon, a three-panel judge held that the participants' assignment of benefits to the provider was void and unenforceable because the plan's terms included a valid anti-assignment clause.

The Jan. 12 unpublished decision is the fifth since December issued by the Eleventh Circuit in a stream of cases filed by Dr. W.A. Griffin, a Georgia dermatologist, on similar grounds (1 PBD, 1/4/16).

In December, the appeals court upheld the anti-assignment clauses of plans sponsored by Southern Co. Services Inc., Focus Brands Inc., Health Systems Management Inc. and General Mills Inc. Cases against Lockheed Martin Corp., Habitat for Humanity International Inc. and SunTrust Banks Inc. are still pending in the appeals court docket.

Just as the Eleventh Circuit decision was issued, Griffin filed a new complaint against Verizon on Jan. 11. She now brings a claims under Section 1557 of the Affordable Care Act alleging civil rights violations. She claims that Verizon discriminated against her by denying her derivative standing under the Employee Retirement Income Security Act because of her gender and race.

Assignment of Benefits

Griffin provided emergency and medical services to two patients insured by a health plan administered and sponsored by Verizon. Blue Shield Blue Cross Georgia was the claims administrator.

The insured patients executed an assignment of benefits to Griffin. When she submitted the claims to Blue Cross for payment, it denied coverage on one and underpaid the second.

After completing the administrative appeals procedure, Griffin filed a lawsuit against Verizon with ERISA claims for alleged unpaid benefits, breach of fiduciary duty and failure to provide plan documents.

The district court granted Verizon's motion to dismiss, ruling that Griffin lacked standing under ERISA based on the plan's anti-assignment clause.

Anti-Assignment Clause

The appeals court noted that even though ERISA doesn't prohibit a participant or beneficiary from assigning benefits to a provider, an anti-assignment clause in a plan—which limits or prohibits a participant or beneficiary from assigning her right to payment of benefits—is valid and enforceable.

As a result, an anti-assignment provision can bar a participant or beneficiary from assigning benefits to a provider, meaning the provider can't acquire a cause of action under ERISA, the court said.

Since a valid and enforceable anti-assignment clause was part of Verizon's plan terms, the insureds' assignments of benefits to Griffin were void, the court ruled.

Griffin argued that the anti-assignment clause was inapplicable because Georgia law required the insureds to assign their benefits to her.

The court rejected her argument. It said that the Georgia statute guaranteed only that if benefits were payable to an in-network provider under a plan, the plan also had to pay benefits to out-of-network providers to whom the patients assigned their rights. Nothing in the Georgia statute required an insured to assign her benefits to a medical provider, the court concluded.

The court also rejected Griffin's argument that because Blue Cross failed to disclose the anti-assignment term, Verizon was equitable estopped from relying on the anti-assignment clause, or had waived it.

The court concluded that equitable estoppel didn't apply because there wasn't any evidence that Verizon or Blue Cross made representations to Griffin interpreting the anti-assignment clause.

The court also said that Griffin failed to allege sufficient facts to show that Verizon waived the anti-assignment clause. The court concluded that her allegations that Blue Cross failed to inform her of the anti-assignment provision was insufficient to establish a “clear case” that Verizon intentionally and voluntarily relinquished its rights under the anti-assignment clause.

The per curiam opinion was joined by Judges Beverly Martin, Jill A. Pryor and Lanier Anderson III.

Griffin represented herself, pro se. Verizon was represented by Troutman Sanders LLP.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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