## Facts

- Joseph Micheletti was a New Jersey state employee who received family health insurance through the State Health Benefits Program (the Program).
- Micheletti’s minor son, Jake, was diagnosed with autism.
- Jake’s physicians prescribed speech therapy and occupational therapy as medically necessary treatment for his autism.
- The therapies were described as the only accepted treatment method used for a child with autism.
- Coverage under the Program was provided subject to the terms and exclusions contained in the applicable insurance plan.
- The plan excluded “nonrestorative services,” meaning services rendered to help a patient reach a level of function beyond what the patient had previously shown.
- The State Health Benefits Commission (the Commission), which administers the Program, denied coverage for Jake’s speech and occupational therapy.
- The Commission concluded the therapies were directed at developing or improving skills beyond a level Jake had previously demonstrated and therefore fell within the plan’s nonrestorative-services exclusion.
- Micheletti appealed the denial through the administrative process and then sought appellate review.

## Issues

1. Whether the Commission properly denied coverage for an autistic child’s speech and occupational therapy where the plan excluded nonrestorative services and the therapies were intended to build skills beyond those previously demonstrated.
2. Whether the Commission’s coverage determination should be upheld under the deferential standard applied to administrative agency decisions.

## Decision

- The court affirmed the Commission’s denial of coverage.
- The court accepted that the controlling plan terms excluded nonrestorative services and that this exclusion applied even if the requested therapies were medically necessary for autism treatment.
- The court upheld the Commission’s determination that Jake’s speech and occupational therapy sought to develop functions beyond those he had previously demonstrated and thus fit within the nonrestorative-services exclusion.
- The court concluded the Commission’s decision was supported by the record and was not arbitrary, capricious, or unreasonable.

## Legal Principles

- A health benefits plan may lawfully exclude categories of treatment; a showing of medical necessity does not by itself create coverage when an exclusion applies.
- When a plan excludes “nonrestorative services” (services aimed at achieving function beyond a previously demonstrated level), an insurer or administering commission may deny coverage for therapies that fall within that definition.
- Courts generally defer to an administrative agency’s application of the plan terms it administers and will uphold the agency’s action if supported by substantial evidence and not arbitrary, capricious, or unreasonable.

## Conclusion

In re Micheletti upheld the State Health Benefits Commission’s denial of coverage for a child’s autism-related speech and occupational therapy because the governing plan excluded nonrestorative services, and the Commission reasonably found the therapies were intended to develop abilities beyond those the child had previously demonstrated.


In re Micheletti, 913 A.2d 842 (2007)