Court Moves Forward Interference of Health Benefits Suit

May 6, 2014 ( – A federal district court has moved forward a lawsuit claiming an employer refused to advance a part-time employee to a full-time position to avoid paying for health coverage.

Amerimed, Inc. argued that former employee John K. Sanders was never a participant or beneficiary in its group health plan and was not entitled to benefits as a part-time employee, and as such, he does not have statutory standing to bring a claim of interference of benefits under the Employee Retirement Income Security Act (ERISA) Section 510. However, U.S. District Judge Timothy S. Black of the U.S. District Court for the Southern District of Ohio, found ERISA’s definition of participant and evidence by Sanders’ shows he does have standing to sue. 

Black noted ERISA defines “participant” as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan.” He also cited a similar case, Fleming v. Ayers & Associates, in which the court found “participant” under ERISA includes not only employees who are currently eligible for certain benefits, but also those employees who “may become eligible to receive a benefit of any type from an employee benefit plan.” Black found Sanders had shown he had a reasonable expectation of becoming a full-time employee eligible for benefits. 

According to the court opinion, proof of this included:

  • He applied for several different full-time positions with Amerimed while he was a part-time or “optional” employee;
  • Amerimed accepted his applications for these positions and interviewed him for at least one of them;
  • Amerimed recommended that he obtain an additional certification in order to help him secure a full-time position, and he did as recommended;
  • As an existing employee, his work was already known to Amerimed, and Amerimed had given him good performance reviews—facts which would ordinarily make him an ideal candidate to fill an open full-time position;
  • In 2012, Amerimed specifically told him about a full-time position that would soon become available and explicitly stated that he would be considered for this position.


Sanders alleged in the lawsuit that he was denied a full-time position with Amerimed because of his age and a permanent medical condition that affected his nervous system. Specifically, he claimed Amerimed refused to hire him for a full-time position because it was concerned that he would add substantial medical expenses to its group health plan. 

The court denied Amerimed’s motion for partial dismissal. 

The opinion is here.