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Raytheon’s Class Deal Over Speech Therapy Coverage Wins Approval

Sept. 21, 2022, 6:59 PM

A class settlement requiring Raytheon Co. to pay $640,000 and maintain expanded coverage for speech therapy services in its employee health plan on Wednesday received preliminary approval from a federal court in Massachusetts.

The deal 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 child received the latter treatment claims this distinction violates 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 settlement motion. The deal requires the company to keep this expanded coverage in place through at least 2027.

Judge Richard G. Stearns of the US District Court for the District of Massachusetts signed the preliminary approval order, scheduling a Jan. 27, 2023, fairness hearing to further consider the deal.

Stearns previously blocked the employee’s family from challenging Raytheon’s coverage practices through a claim for benefits under the Employee Retirement Income Security Act, reasoning that mental health parity law violations can’t be challenged through this ERISA provision.

On appeal, the Labor Department filed a brief challenging this reasoning. The US Court of Appeals for the First Circuit revived the employee’s claim for ERISA benefits in January, largely taking the Labor Department’s view without specifically discussing the agency’s brief.

The plaintiffs are represented by Sirianni Youtz Spoonemore Hamburger PLLC and Fair Work PC, which stand to receive up to $150,000 in attorneys’ fees if the deal receives final approval.

Conn Kavanaugh Rosenthal Peisch & Ford LLP represents Raytheon.

The case is R. v. Raytheon Co., D. Mass., No. 1:20-cv-10153, preliminary approval order 9/21/22.

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