On August 25, 2025, a U.S. District Court denied a motion to dismiss a class action lawsuit against Kaiser Foundation Health Plan Inc. (KFHP) for its denial of coverage for prescription hearing aids, in violation of Section 1557 of the ACA. Specifically, the court found the plaintiff had standing to bring the lawsuit and adequately alleged that the plan's coverage exclusion was discrimination under the ACA.
Background
The plaintiff in the case was an enrollee in a health plan administered by Kaiser Foundation Health Plan of Washington Inc. (KFHPWA) and suffers from bilateral sensorineural hearing loss. The plaintiff has worn prescription hearing aids since childhood in order to work and effectively conduct daily activities. After enrolling in the KFHPWA plan, the plaintiff saw an audiologist who recommended a new type of prescription hearing aid that was not covered under the plan. The plaintiff subsequently brought a single claim on behalf of himself and a putative class alleging that the defendant's exclusion of hearing aid exams and prescription hearing aids violates Section 1557 of the ACA, because it discriminates against plan members on the basis of disability.
The Court's Analysis
The defendant issued a motion to dismiss the claim, arguing that the plaintiff lacked standing under Article III of the U.S. Constitution to bring the lawsuit. Article III standing requires that a plaintiff must have suffered an injury in fact that is fairly traceable to the challenged conduct of the defendant. Here, the defendant argued that the plaintiff's alleged injuries were not fairly traceable to KFHP because the plan was issued by its subsidiary, KFHPWA. However, the court held the plaintiff had established that the alleged harms suffered by himself and the class were fairly traceable to KFHP's plans, including those administered by KFHPWA, which all deny coverage related to prescription hearing aids.
The defendant also moved to dismiss the plaintiff's claim under Section 1557 of the ACA, which prohibits discrimination in health programs and activities based on race, color, national origin, sex, age, or disability, for certain covered entities that receive federal financial assistance. First, the court determined the defendant was a “covered entity” because KFHP (the parent company) engaged in health programs or activities that received federal financial assistance.
Next and notably, the court found that the plaintiff had satisfactorily pled that the hearing aid exclusion is a sufficiently close fit to intentional discrimination on the basis of disability. Specifically, the complaint alleged that the prescribed hearing aids are the precise coverage often needed by disabled people with hearing loss that cannot be treated by the bone-anchored hearing aids and cochlear implants covered under the plan.
The court also rejected the defendant's argument that the plaintiff's discrimination claim fails because the plan does not deny hearing disabled enrollees meaningful access to the facets of the plan enjoyed by other enrollees. Rather, the court found the plaintiff had adequately alleged that the proposed class members had no "meaningful access" to the same plan benefits (e.g., outpatient visits and durable medical equipment) as made available to other enrollees who needed the same to treat their own respective diagnosed health conditions. The court concluded the plaintiff sufficiently pled that the discriminatory design and administration of the plan had a disparate impact on hearing-disabled enrollees.
Employer Takeaway
While the case here is still in its very early stages, and the court has not issued a final judgment on the merits of the Section 1557 discrimination claim, the case nonetheless highlights the potential liability risks involved with coverage exclusions under the ACA. Employers should remain aware of these developments and should carefully evaluate any coverage exclusions for prescription hearing aids. We will continue to monitor this case and related legal developments and provide additional updates moving forward.
Read the full case here: Delessert v. Kaiser (Order on Motion to Dismiss)