Huss v. IBM Medical and Dental Plan et al

Filing 76

MEMORANDUM Opinion and Order. Signed on 3/20/2009.Mailed notice(drw, )

UNITED STATES DISTRICT COURT N O R T H E R N DISTRICT OF ILLINOIS E A S T E R N DIVISION EILEEN M. HUSS, individually and as G uard ian for JOSEPH R. HUSS, JR., P l a i n t i f f, v. IB M MEDICAL AND DENTAL PLAN and R .A . BARNES, in her capacity as PLAN A D M IN IS T R A T O R , D e fe n d a n t s . M E M O R A N D U M OPINION AND ORDER T his is an ERISA suit to overturn the denial of enrollment eligibility for Joseph R. Huss, Jr., Eileen Huss's 25-year old mentally disabled son, in the employee welfare plan sponsored and adm inistered by Eileen's former employer, IBM. Eileen Huss ("Huss") filed a four-count amended co m p lain t under the Employee Retirement Income Security Act ("ERISA") against the IBM M ed ical and Dental Plan (the "Plan") and the Plan Administrator (collectively "IBM" or " D efen d an ts") . Huss seeks relief in the form of health benefits due to her son pursuant to 29 U.S.C. § 1132(a)(1)(B) (Count I) and statutory damages from the Plan and the Plan A d m in istrato r for their failure to provide requested documents pursuant to 29 U.S.C. §§ 1024(b)(4) an d 1132(c) (Count II). Specifically, Huss claims that the Plan incorrectly interpreted the eligib ility requirements of the Over Age 23 Disabled Dependent Child provision set forth in the P lan and that the decision to deny Joseph's enrollment in the Plan was arbitrary, capricious, and u n r e as o n a b le . Huss further claims that Defendants failed to produce certain documents that were critically important to a full and fair resolution of her and Joseph's rights. Count IV seeks N o . 07 C 7028 Jud ge James B. Zagel

attorn eys' fees pursuant to 29 U.S.C. § 1132(g)(1). I dismissed Count III, Huss's claim for breach o f fiduciary duty, on June 30, 2008. The parties now cross move for summary judgment on Counts I and II. I. F a c ts P lain tiff Eileen M. Huss ("Huss") is a retired International Business Machines Corporation (" IB M ") employee and legal guardian for her disabled son, Joseph R. Huss, Jr. Defendant IBM M ed ical and Dental Plan ("IBM Plan" or the "Plan") is the legal entity through which IBM p ro v id es employee benefits to its active and retired employees. The benefits program offered by IB M is governed by the provisions of the Employee Retirement Income Security Act of 1974 (" E R IS A ") . The Plan is designed to provide health, dental, and disability benefits to eligible em p lo yees of IBM. Defendant R.A. Barnes is the Plan Administrator for the IBM Plan, operating o u t of the Office of the Plan Administrator at the IBM Employee Services Center. In her capacity as Plan Administrator, Barnes has the sole discretion to make the final decision with respect to eligib ility under the Plan: T he Plan Administrator has the sole discretion to make the final d ecisio n with respect to eligibility under the IBM Medical and D e n ta l Plan. The decision will take into account any factors d eterm in ed to be relevant within the intent of the Plan and consistent w ith the tax-qualified status of the Plan. E ligible individuals will receive coverage under the IBM Medical and Dental Benefits Plan only if and while enrolled for coverage. O n December 31, 2006, Huss retired as an IBM employee after more than 30 years of serv ice. During her employment and upon her retirement, Eileen was at all times material both a participan t and a beneficiary under multiple iterations of the IBM Plan. Eileen's son, Joseph, was bo rn on August 8, 1981. Since his birth, Joseph has suffered from a severe mental disability that

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re n d er s him incapable of speech, and he has at all times been completely dependent upon his p ar en ts for his support and well-being. Joseph was enrolled in the IBM Plan from the date of his b irth until December 31, 1997. Beginning on January 1, 1998, Joseph was enrolled in the e m p lo ye e benefit plan offered through his father's employer. In late 2005, Huss made a phone call to the IBM Plan Customer Service Center. Huss sp o k e to a Customer Service Specialist ("CSS"), explained the details of Joseph's disabled and d ep en d en t status, and asked what steps were required to enroll Joseph in the Plan. The CSS told H u ss there would be no problem enrolling Joseph in the Plan and suggested that Huss call again ab o u t six months prior to her retirement. O n January 16, 2006, Huss spoke with a different CSS who confirmed that any of her d ep en d en ts listed as "contacts" in the Plan's system "could be added to her retiree benefit co v erage." At the time, Huss had no contacts listed in the system. O n June 15, 2006, Huss called and spoke with another CSS and added Joseph as a contact o n her benefits record. She again explained Joseph's status as a permanently disabled dependent and asked what she needed to do to ensure Joseph's enrollment in the Plan in the following annual o p en enrollment period. The CSS placed Huss on hold to verify if anything else needed to be done re gar d ing adding dependents and then confirmed what the previous IBM Plan employee had told H u ss ­ that there was nothing for her to do until she was ready to add Joseph to the Plan. O n January 3, 2007 (just after Huss's retirement on December 31, 2006), another CSS, T od d Rogers, called Huss to confirm her pension and benefit elections. Rogers confirmed that Jo sep h was listed as a "contact," but he told Huss that the Plan would not permit Joseph to enroll b e ca u se she was supposed to have submitted a written application at least 60 days prior to Joseph's

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a tta in e d age 23 ­ on or before June 9, 2004 ­ and that her failure to do so barred Joseph's en ro llm en t in the Plan. O n January 5, 2007, Rogers called Huss again and confirmed that Joseph would not be perm itted to enroll in the IBM Plan. When Huss told Rogers that a previous Plan employee had add ed Joseph as a "contact" and had told Huss she could enroll Joseph during the next open enro llm ent period, Rogers stated that although Joseph had been added as a "contact," a "special ind icator for dependent" status in the IBM system had not been checked. Rogers advised Huss that th e Plan had not received a written application within 60 days of Joseph's 23 rd birthday. Rogers also indicated that the Plan had no reason to send a notification of the application requirement to H u ss prior to Joseph's attaining age 23. However, if Joseph had been enrolled in the Plan when he w as about to reach the age of 23, IBM would have sent a notification to Huss regarding the ap p licatio n requirement. O n January 8, 2007, Huss sent an email to Rogers requesting a copy of "the IBM summary plan," "the policy language for this benefit," and "[a]ny notices or instructions that may have been sent out on this benefit." Rogers responded the same day by saying there were no further do cum ents other than the January 1, 2006 version of the Summary Plan Description ("SPD") that had already been sent to Huss. O n January 9, 2007, Rogers again spoke with Huss, confirmed he received her email requ est for documents, and explained that he would verify whether she needed any additional in fo rm atio n beyond the January 1, 2006 SPD. On January 16, 2007, Rogers contacted Huss and a d v is ed that the January 1, 2006 SPD was the only document she needed for her appeal. Rogers sent Huss an email on January 17, 2007 confirming: "I have done some research with our back

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o ffice to see if there is any additional documentation that you might have received or need to research your appeal. Our back office has informed me that there are no other mailing [sic] that we w o u ld have sent out to you. Also, their [sic] are no additional resources that you should need. The on ly document that we would send or that you should need is the [January 1, 2006 version of the] S um m ary Plan Document. I requested this document on 1/9/07." O n January 23, 2007, Huss emailed Rogers to confirm that she received the January 1, 20 06 SPD. In her email, Huss also specifically requested the Plan language in effect in 2004, as " th is is the date you advised that I would have had to notify IBM that my son is a dependent." In an email dated January 29, 2007, Rogers responded to Huss, "[u]nfortunately, there is no policy or co n tract information for us to send. Everything you should need to file your appeal would be includ ed in the Summary Plan Description booklet you received." O n March 27, 2007, Huss's counsel sent an appeal letter to the Plan requesting the Plan A d m inistr ato r to review the "determination concerning the eligibility of Joseph Robert Huss, Jr. to receiv e health insurance benefits as a dependent under the IBM Medical and Dental Plan." The app eal letter noted Huss's prior requests for all operative plan language, including the plan langu age from 2004, and made a new request for the following documents: "actual plan do cum ents for IBM Medical and Dental Plan effective January 1, 2004, 2005, 2006 and 2007, as w ell as the Summary Plan Descriptions for 2004, 2005 and 2007." B y letter dated April 26, 2007, Defendants denied Huss's request to enroll Joseph in the P lan . The denial letter quoted a passage from the "Who is Eligible" section of the January 1, 2006 v ersio n of the SPD 1: This denial letter itself (as well as the second one sent in August, 2008) does not specify to which version of the SPD it refers. However, Defendants admitted in their response to Huss's
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Y ou r mentally or physically disabled child who was covered under th e Plans immediately before reaching age 23 and who, but for h av ing reached age 23 would still be eligible, will be eligible to enro ll or remain enrolled upon attainment of age 23, and thereafter to remain continuously eligible beyond the age of 23 if, at the time th e child turns age 23, IBM determines, on the basis of the child's co n d ition at the time, that (1) he or she is mentally or physically d isab led , and (2) because of such mental or physical disability he or sh e incapable of self-support, and (3) he or she is unmarried, and (4) h e or she is primarily dependent upon you, the employee, for m ain ten an ce and support. (SSI or SSDI income may be used in determ ining whether your child is principally dependent upon you.) If you think your child will meet the above criteria at age 23, you m u st request continuation of IBM health benefits by completing the " O v er Age 23 Disabled Child Application" and submitting it to the IB M Employee Services Center at least 60 days before his or her 2 3rd birthday. Applications are available by calling the IBM E m p lo ye e Services Center. A ccord ing to the denial letter, "In order to enroll Joseph in IBM benefit coverage the Over Age 23 D isa b led Child Application had to be submitted to the IBM Employee Services Centers no less th an 60 days prior to Joseph reaching age 23." Because Huss failed to submit such an application, Jo sep h was precluded from enrolling in the Plan. The letter also noted that the application req u irem en t applied "regardless of whether the child is enrolled in IBM benefit coverage at the tim e the child reaches age 23." T h e April 26, 2007 denial letter included enclosures of one of the three 2003 versions of the SPD, one of the four 2004 versions, one of the three 2005 versions, and the Summary Annual R ep o rts ("SAR") for 2004 and 2005. The most recent SPD the Plan had published prior to Jo sep h 's attaining age 23 was not enclosed. The letter explained that the 2007 SPD and 2006 SAR w ere not yet available. Local Rule 56.1 statement of facts that the SPD quoted and relied upon by the IBM Plan in its d en ial of the claim is the January 1, 2006 SPD.

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O n June 12, 2007, Huss's counsel submitted her final appeal of the Plan's denial of Jo sep h 's enrollment. The appeal noted that Huss was relying on the August 5, 2003 version of the S P D , the version which was in effect 60 days prior to Joseph's 23 rd birthday. The appeal also requ ested copies of the following documents: A ll documents reflecting contact with the IBM Employee Services Center; D ra fting History for 2005 SPD Revisions, including all documents reflecting the decision to m o d ify the SPD to move the annual enrollment option language from § 2.3 to § 3.1.1.4 and all d o cu m en ts reflecting communications, memos, drafts and emails concerning this modification of th e SPD; · O th er Plan Documents/Insurance Policies, including documents that reflect the terms and co n d itio n s of the actual plan, editions of the SPD published from January 1, 2003 to the presen t, and any and all documents, internal memos, interpretation notes, or other written m ater ials that reflect or discuss in any fashion the eligibility and enrollment requirements fo r the IBM Plan in general, and for the age 23 and older mentally disabled dependent b e n e fits in particular; O ther Affirmations of Continued Eligibility, including documents reflecting other instances sim ilar to the August 2006 conversation in which IBM Plan employees/representatives co n firm ed that eligibility continues beyond age 23, and is not subject to a 60-day window a p p li c a t i o n ; D ocu m ents reflecting the complete record of any contacts and communications between E ileen and IBM concerning eligibility, enrollment and receipt of benefits under the IBM P lan ; and H isto ry of Joseph's enrollment in the IBM Plan from the beginning of Eileen's employment to the present. O n June 28, 2007, Barnes reminded a subordinate to listen to the recordings of the phone calls between Huss and the CSSs. That plan representative summarized the June 15, 2006 call, in clu d in g the CSS's statement to Huss that "whenever she wanted to add [Joseph] to coverage, she co u ld. The CSS associate advised the participant there was nothing more to do at that time until

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sh e wanted to add him to coverage." In response to this summary Barnes wrote, "let's deny this ap p eal," concluding that the SPD "clearly indicates" that the participant must "request continuation o f coverage" at least 60 days prior to attaining age 23. O n August 8, 2007, Barnes sent a signed letter to Huss's counsel stating that she had " co n d ucted a final review of [Huss'] appeal." Relying again on the January 1, 2006 version of the S P D , Barnes wrote that "IBM's Plan clearly indicates that an employee MUST request co n tin u ation of coverage at least 60 days prior to the child becoming 23." In addition, she wrote that "to request continuation of coverage at the 23 rd birthday, the child must first have been en ro lled in coverage during the prior open enrollment period." Because IBM only had records in d ic atin g that Huss called to enroll Joseph on June 15, 2005, when Joseph was already 25 years old, Joseph was ineligible for coverage when the request was made. Barnes further explained that in the event of any conflict between the terms of the Plans and the information provided by custom er service representatives, "Plan documents, insurance policies, IBM's corrected records, other controlling documents or the applicable law will control." F ollow ing the administrative appeal process, Huss learned that the SPD language in effect o n June 9, 2004 required only a phone call, rather than the submission of a written application: If you think your child will meet the above criteria at age 23, you m u st request continuation of IBM health benefits at least 60 days before his or her 23 birthday. To do so, call the IBM Employee S ervices Center. If you are a newly hired employee with a disabled ch ild who has already reached 23 at the time your employment b egin s, you should call to request this coverage within 60 days of you r date of hire. A ltho ugh Huss cannot recall a specific conversation, Huss testified that it is highly probable that she discussed and expressed her interest in Joseph's continued eligibility for benefits as a disabled

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ad u lt at least once, and probably on multiple occasions because of the critical nature of the c o v e ra ge , prior to June 9, 2004. The Plan has not retained any phone records of Huss's co n v er satio n s with the IBM Plan Customer Service Center prior to June 9, 2004. Defendants adm it that nothing in the administrative record suggests that any IBM Plan representative, includ ing Barnes, ever checked to see if Huss contacted the Plan about Joseph's continued eligib ility for benefits prior to June 8, 2004. II. S tan d ard of Review A. S u m m a ry Judgment

S u m m a ry judgment should be granted when "the pleadings, the discovery and disclosure m aterials on file, and any affidavits" indicate that there is no genuine issue as to any material fact an d that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). With cross-m otion s, I construe all inferences in favor of the party against whom the motion under con sideration is made. Tegtmeier v. Midwest Operating Eng'rs Pension Trust Fund, 390 F.3d 1 0 4 0, 1045 (7th Cir. 2004) (citation and quotation omitted). "Only disputes over facts that might a ffe ct the outcome of the suit under the governing law will properly preclude the entry of summary jud gm ent." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). B. R e v iew of Benefits Regulated by ERISA

A s mentioned above, the Plan gave Barnes the authority to determine eligibility for benefits an d to construe provisions of the Plan. Consequently, Barnes' interpretation may be reversed only if it was arbitrary and capricious. James v. Gen. Motors Corp., 230 F.3d 315, 317 (7th Cir. 2000). A decision is arbitrary or capricious "only when the decisionmaker has relied on factors which C o n gress has not intended it to consider, entirely failed to consider an important aspect of the

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pro blem , offered an explanation for a decision that runs counter to the evidence . . ., or is so im plausible that it could not be ascribed to difference in view or the product of . . . expertise." Trombetta v. Cragin Fed. Bank for Sav. Employee Stock Ownership Plan, 102 F.3d 1435, 1438 (7 th Cir. 1996) (quotation and citation omitted). I may not interfere with the Barnes' decision un less she not only made the wrong call, but made a "downright unreasonable" one. See Fuller v. C B T Corp., 905 F.2d 1055, 1058 (7th Cir. 1990). A denial of benefits will not be set aside if it was based upon a reasonable interpretation of plan documents. James, 230 F.3d at 317. It does not m atter whether the result reached by the administrator is one I would have arrived at in the first instance. Id. (citation omitted). Nevertheless, this deferential review "is not no review," and " deference need not be abject." Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir. 1996). In addition, the conflict of interest resulting from IBM's dual role of funding the Plan and deciding claims under the Plan "must be considered as a factor" in determining whether Barnes abu sed her discretion as the plan's administrator. See Metro. Life Ins. Co. v. Glenn, 128 S.Ct. 2 3 4 3, 2348 (2008). The conflict of interest presented here does not alter the arbitrary and cap ricio u s standard that I must apply, it simply presents one of many factors that might help dem on strate an abuse of discretion. See Gutta v. Standard Select Trust Ins. Plans, 285 Fed. Appx. 3 0 2 (7th Cir. 2008). III. D is c u s sio n A s a preliminary matter, Defendants argue that under the abuse of discretion standard, my review of Huss's claim is limited to the information available to, and considered by, Defendants at the time of the denial. See Perlman v. Swiss Bank Corp. Comprehensive Disability Protection P la n , 195 F.3d 975, 981-82 (7 th Cir. 1999) ("Deferential review of an administrative decision m ean s review on the administrative record.") I implicitly rejected this contention earlier in this

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case when I ordered IBM to respond to focused discovery that had been propounded by Huss. "Where a claimant makes specific factual allegations of misconduct or bias in a plan adm inistrator's review procedures, limited discovery is appropriate." Semien v. Life Ins. Co. of N orth America, 436 F.3d 805 (7th Cir. 2006). Huss identified a specific conflict of interest b e tw e en the IBM Plan and IBM's own plan administrator and further made a showing that there w as good cause to believe limited discovery would reveal a procedural defect in the plan ad m in istrato r's determination. Huss requested and was refused earlier versions of the SPD during her administrative appeal process. Defendants' letters denying Huss's appeals quoted language from an SPD without citing to which version it was quoting. A key component of the Perlman decision is the line, "when there can be no doubt the ap p licatio n was given a genuine evaluation," because only then is judicial review "limited to the eviden ce that was submitted in support of the application for benefits." 195 F.3d at 982. Where, as here, there is doubt that Huss's appeals were given genuine evaluation (Defendants did not su p p ly Huss with earlier versions of the SPD and did not cite to earlier versions of the SPD in their d en ial letters), then it was appropriate for me to allow Huss to conduct limited discovery to determ ine what policies, procedures, and practices do exist and, if so, to what extent they interfered w ith a fair review of Huss's claim. See Semien, 436 F.3d at 815. This information remains relevan t to my discretionary review of the plan administrator's decision to deny enrollment. Id. P resum ably Defendants seek to limit my review to the administrative record because that reco rd , as attached to Defendants' motion, only includes the version of the SPD that became effective on January 1, 2006. Defendants contend that this version of the SPD is the operative plan d o cu m en t because it was the Plan document in effect in January, 2007 when benefits for Joseph w ere denied. In support, Defendants cite to Hackett v. Xerox Corp. Long-Term Disability Income

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P la n , 315 F.3d 771, 774 (7th Cir. 2003). Huss argues that the appropriate Plan document is the v ersio n of the SPD that was in effect at the time Joseph turned 23 (i.e., the August 5, 2003 SPD). The resolution of this dispute over the so-called "operative plan" establishes the basis for nearly all o f my findings in this opinion. D efen d an ts' reliance on Hackett v. Xerox is misplaced. In Hackett, the plan participant dispu ted the Plan's decision to terminate his disability benefits. Hackett merely held that the SPD in effect at the time a participant's benefits claim accrues will govern the claim. 315 F.3d at 774 (" ab sen t any language suggesting ambiguity on the vesting question, the controlling plan must be the plan in effect at the time the benefits were denied"). But our case is not one over a rejected c la im for health benefits. Our case concerns Defendants' adverse determination regarding Joseph's eligibility to enroll in the Plan on the basis that Huss failed to secure his continued eligibility in Jun e of 2004. The dispute is whether, on or before June 9, 2004, Huss failed to satisfy a purported con dition precedent for Joseph's continued eligibility to annually enroll in the Plan. Hackett does no t address this issue and its unremarkable holding is not applicable to the question presented here. The nature of the dispute dictates whether the plan administrator must turn to an earlier version of an SPD. McClain v. Retail Food Employers Joint Pension Plan, 413 F.3d 582, 585 (7th C ir. 2005) (applying older version of plan that was in effect at the time plaintiff took his break in ser v ice in evaluating effect of break on eligibility service); see also Cortes v. Midway Games, Inc., N o . 04 C 5268, 2004 WL 2367738, at *4 (N.D. Ill. Oct. 15, 2004); First Midwest Bancorp, Inc.. v. H ickey, No. 93 C 6784, 1994 WL 532187, at *2 (N.D. Ill. Sept. 26, 1994); Brewer v. Protexall, Inc. , No. 91-2222, 1992 WL 698272, at *2 (C.D. Ill. June 25, 1992) (each concluding that earlier v e rs io n s of a benefits plan controlled the rights of the parties).

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H er e, it is clear that the language of the SPD in effect when Huss purportedly failed to preserv e Joseph's continued eligibility is germane to a discretionary review of the plan ad m in istrato r's decision to deny Joseph's enrollment. That this version of the SPD was not e x p lic itly relied on by the plan administrator in making her determinations to deny Joseph's en ro llm en t does not preclude my consideration of it here. Defendants had access to the August 5, 2 0 0 3 SPD language at the time of each denial of enrollment, as well as the language of each and ev ery version of the SPD thereafter. The applicable SPD is always to be deemed part of the ad m in istrativ e record. IB M does not dispute that Joseph satisfies the four specified eligibility criteria for receiving th e disabled adult dependent benefits. Joseph was refused enrollment only because of Huss's failu re to submit a written application to IBM 60 days prior to Joseph's 23rd birthday. It is u n d isp u ted that Joseph turned 23 on August 8, 2004. According to IBM, Huss was required to s u b m it a written application on or before June 9, 2004 ­ the date 60 days prior to Joseph's 23rd b irth d ay. Huss maintains she was not required to do so. W h eth er or not Huss was required to submit the application on or before June 9, 2004 in o rd er to preserve Joseph's eligibility in the Plan depends on the language of the SPD in effect on Ju n e 9, 2004. This was the August 5, 2003 version of the SPD, which simply does not include any re q u irem en t that Huss submit a written application for the disabled adult dependent benefits av ailab le under the Plan. The August 5, 2003 SPD reads, in applicable part: "If you think your ch ild will meet the above criteria at age 23, you must request continuation of IBM health benefits at least 60 days before his or her 23 birthday. To do so, call the IBM Employee Services Center."2 The requirement for a written application was first introduced by IBM in the SPD pu blished on June 30, 2005. IBM has never argued that Huss failed to make such a phone call. Rather, IBM claims that it does not have any records of phone conversations to its CSSs in or
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IB M , therefore, based its entire claim decision on Huss's failure to comply with a requirement by Ju n e 9, 2004 that clearly did not exist in 2004. IB M 's contention that the language relating to the "Age 23 Disabled Dependent Adult" p ro v isio n in the 2004 and 2007 versions of the SPD are "substantially the same" with the exception th at "the SPD in effect in 2007 contains the application requirement" is without merit. The con tention defies simple common sense. The very exception that Defendants acknowledge estab lish es a material difference between the 2004 and 2007 versions of the SPD; indeed it was the a d d itio n a l application requirement that formed the sole basis for IBM to deny both of Huss's ad m inistr ative appeals. Defendants cannot exclude Joseph from the Plan for failing to comply with a requirement that did not exist. E v e n if Defendants were permitted to invoke the application requirement in § 3.1.1.4 of the 20 07 version of the SPD, their interpretation of the Plan language cannot be sustained. There is a d iffe re n ce between (1) eligibility for benefits, (2) enrollment in the Plan, and (3) the actual receipt o f benefits. The IBM Plan expressly recognizes the distinction: "All eligible employees, surviving spo uses/do m estic partners, and dependents must be enrolled in order to receive IBM medical, d en tal, and vision benefits." § 2.1. The plain language of the application requirement makes clear tha t it applies only to currently enrolled beneficiaries who seek a "continuation of IBM health ben efits."3 Therefore, it only applies to 22-year olds who are currently receiving benefits. Joseph, before 2004. 3 The relevant paragraph reads in whole: If you think your child will meet the above criteria at age 23, you m u st request continuation of IBM health benefits by completing the " O v er Age 23 Disabled Child Application" and submitting it to the IB M Employee Services Center at least 60 days before his or her 2 3rd birthday. Applications are available by calling the IBM E m p lo ye e Services Center.

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w ho was not currently receiving benefits in 2004, could not apply for the "continuation" of such b en efits. There is no corresponding requirement for continued eligibility for enrollment in the IBM P lan . D efend ants insist that "it is clear from the Plan language, that, to ensure Joseph remained eligib le for coverage under the Plan, Huss was required to take action prior to Joseph's 23rd birthd ay" and "for Joseph to be eligible for coverage, Huss needed to submit" a written application. IBM's first decision letter concludes that the SPD requires the submission of such an application " regardless of whether the child is enrolled in IBM benefit coverage at the time the child reaches 2 3 ." This assertion is not supported by the actual Plan language, which expressly only requires the s u b m is sio n for a continuation of "benefits" and not for the continuation of "eligibility." IBM's insertion of the word "eligibility" where it does not exist controverts the plain meaning of the Plan and renders the administrative decision arbitrary and capricious. Filipowicz v. American Stores B enefit Plans Committee, 56 F.3d 807, 813 (7th Cir. 1995) (fiduciaries or administrators who ign o re the plain language of the plan act arbitrarily and capriciously); Swaback v. American Info. T e ch . Corp., 103 F.3d 535, 540 (7th Cir. 1996) (same). Not only is IBM's conclusion contrary to the plain language of the written application requ irem ent, it also contradicts the Plan's unambiguous promise that Huss would be given a chance to enroll Joseph in the Plan each and every year: "Each year, during an enrollment period usually h eld in the fall, you will have the opportunity to elect coverage for yourself and any other eligible fam ily members you with to enroll for the upcoming plan year." § 2.1. This language is repeated a co u p le of paragraphs later in § 2.3. The express promise is again repeated in the section containing the written application requirement: Huss "may opt out or waive coverage for [Joseph] one year

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and re-enroll [Joseph] during the next year or subsequent annual enrollment period as long as [Jo sep h] continue[s] to meet the eligibility criteria." § 3.1.1.4. In fact, on December 20, 2005, IBM am en d ed the Plan for the purpose of adding the "annual enrollment" language directly into section 3 .1 .1 .4 , the same section that addresses Joseph's right to enroll in the benefits program for mentally d isab led dependents. Accordingly, IBM's argument that Huss had a one-time opportunity in 2004 to enroll Joseph in the plan directly contradicts the Plan's express provisions that Huss has an an n u al opportunity to do so.4 In some cases, the plain language or structure of the plan or simple common sense will requ ire me to pronounce an administrator's determination arbitrary and capricious. See Hess v. H a rtfo rd Life & Acc. Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001). In this case, both the plain langu age of the Plan and simple common sense cause me to find that the administrator abused her discretion when she upheld the decision declining to enroll Joseph in the IBM Plan. Accordingly, I

Since I find the SPD unambiguous, I do not consider the extrinsic evidence, though I did e x a m in e it to see if it offers support to Defendants. I did so on the premise that plan administrators a re entitled to considerable deference. The extrinsic evidence, however, supports Huss's in terp retatio n that the written application requirement only applies to dependents who are already re ceiv ing benefits under the Plan and not to dependents, like Joseph, who are seeking to enroll in th e Plan: (1) the practical interpretation of the parties reveals that multiple IBM CSSs trained and en tru sted with the responsibility of interpreting the SPD and explaining its terms concluded that the a p p lic atio n requirement did not apply to Joseph's continued eligibility for enrollment; (2) IBM's fo rm application confirms that the requirement only applies to dependents already enrolled in the p lan because it reads: "If your request for continuation of coverage is approved, your child will rem ain enrolled in their current coverage." And, alternatively, "If your request for continuation of co verage is denied, you will be notified . . . how you can purchase continuation coverage"; (3) IBM sen d s out letters to participants with 22-year old dependents reminding them to submit their ap p licatio n s at least 60 days before their dependents turn 23 ­ but it only sends those letters to p articip an ts whose dependents are currently enrolled in the Plan. Because this evidence is of no v alu e to Defendants, I disregard it.

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gran t summary judgment for Plaintiff on her claim for relief for benefits and find that Joseph R. H u ss, Jr. is entitled to be enrolled in the IBM Plan immediately.
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T u r nin g to Huss's claim for statutory penalties, I previously ruled that prior versions of the su m m ar y plan descriptions requested by a plan participant fall within the scope of the penalty p ro v isio n s of 29 U.S.C. §§ 1132(c) and 1024(b)(4) if they are material to an evaluation of the claim ant's rights. See Ames v. American Nat'l, 170 F.3d 751, 759 (7th Cir. 1999). Subsection 1 0 2 4(b )(4 ) requires disclosure of "other instruments under which the plan is established or op erated." In determining whether the documents Huss requested were subject to disclosure, I m u st consider whether those documents allow the individual participant to know exactly where she stand s with respect to the plan ­ what benefits she may be entitled to, what circumstances may p reclu d e her from obtaining benefits, what procedures she must follow to obtain benefits, and who are the persons to whom the management and investment of the plan funds have been entrusted. Hess v. Hartfortd Life and Acc. Ins. Co., 91 F.Supp.2d 1215, 1226 (7th Cir. 2000) (quotation and citatio n omitted). With this framework in mind, common sense confirms that if an earlier version of an SPD is germane to evaluating a claimant's rights, section 1024(b)(4) encompasses those earlier SPDs. H u ss's statutory penalty claim is premised upon her requests for (1) the SPDs in effect on Jun e 9, 2004, and (2) the intervening amendments to the SPD published up until the version relied u p o n by IBM. IBM affirmatively misrepresented to Huss that 2004 versions of the SPD were not av ailab le to send. After Huss finally obtained the 2004 through 2006 SPDs, she learned that (1) I need not and do not reach Huss's argument that a failure to timely comply with an ap p licatio n requirement for the receipt benefits does not permanently destroy eligibility for benefits (p rem ised upon Dudek v. Midwest Operating Eng. Pension Trust Fund, No. 02 C 1079, 2003 WL 2 2 7 57 7 4 6 (N.D. Ill Nov. 20, 2003), nor do I reach her estoppel argument based upon the Court of A p p eals' decision in Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 583-86 (7th Cir. 2000).
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IB M was invoking a written application requirement that did not exist at the time Joseph turned 23 an d (2) IBM had amended the SPD between 2004 and 2006. These documents were critically im po rtant documents in evaluating Huss's rights. Accordingly, IBM's failure to timely turn over th o se documents ­ in conjunction with statements to Huss that the documents either did not exist or w ere not necessary for her appeal ­ give rise to the invocation of statutory penalties. See Ames, 1 7 0 F.3d at 760 (Court emphasized that fines may be necessary to make employers take seriously th eir disclosure obligations when an actual lack of information results from the employer's r elu c ta n ce to respond to a request for information). H uss's motion for summary judgment on her claim for statutory penalties is granted. I ins tru ct the parties to simultaneously submit briefs of no longer than 5 pages on the appropriate am o u n t of penalty I ought to impose. Those briefs will be due within two weeks of the date this m em o ran d u m opinion and order is issued. ENTER:

Jam es B. Zagel U nited States District Judge D A T E : March 20, 2009

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