A Fiduciary Theory of Health Entitlements

Authors

Margaux J. Hall, Columbia Law School

Abstract

The Affordable Care Act's "contraceptive mandate" continues to generate controversy in courts and academic literature. While a growing body of scholarship analyzes the merits of employers' religious freedom claims, claims presently before the Supreme Court, academics and commentators have overlooked a more fundamental tension illuminated by the Act but predating its enactment: Historically, the law has empowered employers to make almost all decisions relating to the cost, quality, and accessibility of health insurance on behalf of employees with virtually unlimited discretion, even when those decisions have subverted employees' interests. While contraceptives are the current source of controversy, tensions exist around a wider range of services.

Academic literature has not adequately recognized the conflicts that result when employers select employees' health insurance terms, and the law itself provides no current framework to resolve those conflicts. This Article contends that employees have an entitlement to health insurance, grounded in the Affordable Care Act's statutory guarantees and employer mandate, and in the inherent structure of employment-based health insurance financing. After all, employees pay for their health insurance either directly (through premium contributions) or indirectly (through a wage-benefit tradeoff). Nevertheless, the law undermines employees' rights by empowering employers to make coverage decisions on their behalf with broad discretion.

This Article introduces fiduciary law to re-theorize this relationship between employers and employees. It suggests that employers act as fiduciaries when they make coverage decisions on employees' behalf. Fiduciary law constrains fiduciaries with duties of care and loyalty, requiring that fiduciaries act in beneficiaries' sole interest and disregard their own social or other preferences. The fiduciary reframing accepts a world of dependent health care relationships, particularly given the complexity of health insurance decision-making. Yet it ensures that these third parties act in beneficiaries' interest with appropriate diligence and care. The Article concludes by analyzing doctrinal obstacles and opportunities in implementing the revised fiduciary account.

Disciplines

Insurance Law | Law

Recommended Citation

Margaux J. Hall, A Fiduciary Theory of Health Entitlements, 35 Cardozo L. Rev. 1729 (2014).
Available at: https://larc.cardozo.yu.edu/clr/vol35/iss5/4