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Raytheon Settles Mental Health Suit for $640,000, Coverage Boost

Sept. 15, 2022, 4:39 PM

Raytheon Co. will settle a class action challenging its health plan’s alleged failure to properly cover speech therapy services by paying $640,000 and maintaining expanded coverage through at least 2027, according to a Massachusetts federal court filing.

The deal, filed Wednesday in the US District Court for the District of Massachusetts, resolves a 300-person class action challenging Raytheon’s alleged practice of covering restorative speech therapy for people who lost verbal communication abilities, but failing to cover non-restorative therapy for people who never developed that ability in the first place.

A Raytheon employee whose 5-year-old child, N.R., received the latter treatment claims this distinction is an impermissible coverage restriction under the Mental Health Parity and Addiction Equity Act, a federal law requiring health plans to cover mental health benefits on the same terms that they cover medical and surgical benefits.

Raytheon amended its health plan to cover medically necessary speech therapy services for Autism Spectrum Disorder and other conditions previously considered non-restorative, according to the motion. The settlement requires the company to keep this expanded coverage in place for at least the next five years.

The settlement is subject to approval from Judge Richard G. Stearns. In 2020, Stearns blocked the employee’s family from challenging Raytheon’s coverage practices through a claim for benefits under ERISA, reasoning that parity law violations can’t be challenged through this ERISA provision.

On appeal, the Labor Department filed a brief challenging this reasoning, arguing that health plan participants who would be entitled to coverage in the absence of a parity act violation can seek relief through a claim for ERISA benefits.

The US Court of Appeals for the First Circuit revived N.R.'s claim for ERISA benefits in January, largely taking the Labor Department’s view without specifically discussing the agency’s brief.

The class is represented by Sirianni Youtz Spoonemore Hamburger PLLC and Fair Work PC, which can petition for up to $150,000 in attorneys’ fees. Conn Kavanaugh Rosenthal Peisch & Ford LLP represents Raytheon.

The case is N.R. v. Raytheon Co., D. Mass., No. 1:20-cv-10153, settlement approval motion 9/14/22.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com