When State Law Requires Coverage but an ERISA Plan Says No: What a 2025 Federal Case Means for Insurance Appeals

Many consumers believe that if their state requires health insurers to cover a certain medical treatment, their insurer must automatically follow that law. But when the coverage is part of an ERISA-governed employer health plan, things become far less straightforward. ERISA — the federal law regulating employer-provided benefit plans — often preempts state rules. Yet ERISA also has a crucial “saving clause” that protects state insurance regulations, including many state-mandated benefit laws.

A major 2025 decision, BlueCross BlueShield of Tennessee, Inc. v. Nicolopoulos, clarifies exactly how these laws interact. The ruling confirms that insurers cannot rely on ERISA fiduciary duties or plan exclusions to avoid state mandates — a powerful point for anyone appealing a health insurance denial.

This case has important implications for consumers dealing with fertility treatment denials, autism therapy denials, mental health parity disputes, cancer screening coverage issues, and more.

Case Background: Fertility Treatment Denied Despite State Mandate

A New Hampshire resident underwent medically necessary fertility treatments. Under New Hampshire law, fertility treatment is a mandated benefit that insurers must cover.

However, her employer’s group plan — administered by BlueCross Tennessee — contained an exclusion for fertility treatment. Because the plan was governed by ERISA, BlueCross denied all claims.

New Hampshire’s Insurance Commissioner initiated an enforcement action, asserting that BlueCross must follow New Hampshire laws when providing or administering coverage to residents of the state.

BlueCross argued:

• it was acting as an ERISA fiduciary,

• federal law required it to follow the plan terms, and

• the state lacked authority to impose its benefit mandates.

The state countered that BlueCross was acting as an insurer, not just as a fiduciary — and therefore was subject to New Hampshire insurance laws.

The Legal Issue

The court had to answer one critical question:

Was the state enforcing its laws against BlueCross in its capacity as an insurer, or in its capacity as an ERISA fiduciary?

This matters because:

• State regulation of insurers is preserved under ERISA.

• State regulation of fiduciary duties is not.

If BlueCross was being regulated as an insurer, ERISA does not apply. If it was being regulated as a fiduciary, ERISA could block the enforcement action.

The Court’s Holding: State Mandates Still Apply

The Sixth Circuit held that:

New Hampshire was regulating BlueCross as an insurer — not as an ERISA fiduciary.

Therefore:

✔ State-mandated coverage laws are not preempted by ERISA

✔ Insurers cannot avoid state benefit mandates by pointing to ERISA plan terms

✔ State insurance departments may enforce compliance through penalties, hearings, and cease-and-desist orders

In simple terms:

If a state requires coverage for a treatment, insurers operating in that state may have to comply — even if the employer’s ERISA plan excludes the treatment.

This gives consumers a powerful tool for appealing denials involving state-mandated treatments.

Why This Case Matters for Insurance Appeals

Insurers routinely deny claims with statements like:

• “Your plan excludes this treatment.”

• “This is not covered under your benefit plan.”

• “This service is not a covered benefit.”

But if your state mandates that treatment, an exclusion in the plan may not be valid — especially when the insurer is licensed, authorized, or functionally operating within the state.

This ruling shows that:

• State mandates can override plan exclusions

• State regulators can enforce compliance

• Insurers cannot hide behind ERISA to escape state benefit laws

This is a powerful angle to use in appeal letters, especially for partially denied or fully denied claims involving mandated benefits.

How to Apply This Case to a Real Appeal

When preparing an appeal for a treatment that is mandated by state law, it can be effective to:

1. Identify the applicable state insurance mandate

(Example: fertility coverage, autism therapy, contraceptive coverage, cancer screening, diabetes supplies)

2. Point out the conflict between the mandate and the plan exclusion

(Example: “State law requires fertility coverage; the plan excludes it.”)

3. Reference the principle affirmed in this federal case

Insurers cannot rely on ERISA fiduciary duties to override state benefit mandates.

4. Request reconsideration consistent with state law and established legal precedent

This framework helps position the denial as inconsistent with required insurance practices.

Real-Life Situations Where This Case Helps Consumers

1. Fertility Treatment Denials

Many states mandate fertility coverage.
If a plan cites an exclusion, this case supports overriding the exclusion.

2. Autism / ABA Therapy Denials

State laws often require coverage for autism treatment.
Plans excluding ABA may still be subject to state requirements.

3. Cancer Screening & Genetic Testing

BRCA testing, mammography, colonoscopy, and other screenings may be state-mandated, even if the plan lists limitations.

4. Mental Health Parity

Some states require broader mental health coverage than federal law.

5. Diabetes Treatment & Supplies

Continuous glucose monitors, insulin, and diabetes equipment may be protected by state law.

6. Contraceptive Coverage

Some states require coverage for contraceptives beyond federal ACA mandates.

In all of these situations, a denial citing “plan exclusion” may be vulnerable to challenge.

Why Insurers Still Deny These Claims

Even when a state requires coverage, insurers may still deny claims because:

• The employer is located in another state

• The plan includes a “choice of law” provision

• The insurer asserts ERISA preemption

• The treatment appears in an exclusion list

• The insurer assumes patients will not challenge the denial

This case shows that these arguments may not always hold up.

Strengthening an Appeal With State Mandates & Case Law

An appeal can be significantly reinforced by referencing:

• the specific state mandate,

• the insurer’s obligation to comply with that mandate,

• and the court’s holding that ERISA does not override state insurance regulations applied to insurers.

Many consumers overlook this argument entirely — which makes it highly effective when included in a clear, structured appeal.

How Attorney-Drafted Appeal Templates Help

A strong appeal must:

• identify the legal basis for coverage

• cite supporting regulations

• reference medical evidence

• challenge incorrect plan interpretations

• outline procedural violations (if any)

• request review consistent with state and federal requirements

Most consumers do not know how to structure these arguments or cite state mandates effectively.

Attorney-drafted templates help by providing:

• the correct appeal structure

• legally grounded argument sections

• state-law analysis when relevant

• evidence checklists

• language proven to get insurers’ attention

These tools help prevent costly mistakes and ensure the appeal contains the arguments insurers must address.

If a claim was denied due to a “plan exclusion” or a dispute involving a state-mandated benefit, a well-written appeal can make all the difference.

Don’t risk losing your appeal.
Get an attorney-drafted appeal template with the legal arguments, supporting language, and step-by-step instructions needed to challenge the denial effectively.

👉 Explore the Appeal Templates Library
👉 Download the Free Legal Appeal Guide

Take action now and give yourself the strongest chance of overturning the denial.