ROCHE et al v. AETNA, INC. et al
Filing
208
OPINION. Signed by Judge Noel L. Hillman on 9/29/2018. (dmr)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JAY MINERLEY, individually
and as class representative,
Plaintiff,
v.
CIVIL NO. 13-1377 (NLH/KMW)
AETNA, INC., AETNA HEALTH,
INC. (a NJ corp.), AETNA
HEALTH INSURANCE CO., AETNA
LIFE INSURANCE CO., and THE
RAWLINGS COMPANY, LLC,
OPINION
Defendants.
APPEARANCES:
CHARLES KANNEBECKER
KANNEBECKER LAW
104 W. HIGH STREET
MILFORD, PA 18337
AND
RYAN N. BOLAND
MATTHEW D’ANNUNZIO
DON P. FOSTER
OFFIT KURMAN, P.A.
1801 MARKET STREET, SUITE 2300
PHILADELPHIA, PA 19103
Attorneys for Plaintiff, Jay Minerley
ANTHONY M. CHRISTINA
RICHARD W. COHEN
GERALD LAWRENCE
URIEL RABINOVITZ
LOWEY DANNENBERG, P.C.
44 SOUTH BROADWAY, SUITE 1100
WHITE PLAINS, NY 10601-2310
Attorneys for Defendants Aetna, Inc., Aetna Health, Inc. (a
NJ corp.), Aetna Health Insurance Co., Aetna Life Insurance Co.,
and the Rawlings Company, LLC
HILLMAN, District Judge
This case concerns the interpretation of an insurance
policy and whether the insurer may require the insured to
reimburse medical costs paid by the insurer when the insured
receives an award from a third-party tortfeasor.
Currently
before the Court is Plaintiff’s Motion for Partial Summary
Judgment and Defendants’ 1 Motion for Summary Judgment.
For the
reasons discussed below, Plaintiff’s Motion will be denied and
Defendants’ Motion will be granted, in part, and denied, in
part.
BACKGROUND
Our recitation of the facts is taken from Plaintiff’s and
Defendants’ Statements of Material Facts Not in Dispute.
Court notes factual disagreement where applicable.
This
Plaintiff
Jay Minerley was an employee of Weiss-Aug Company Inc. (“WeissAug”), a New Jersey company, from February 2007 through April
2017.
During that time, Minerley, a resident of Pennsylvania,
enrolled in an employer-sponsored health benefits provided by
Weiss-Aug.
Of relevance, Minerley attended a Weiss-Aug employee
1
As used in this Opinion, “Defendants” refers to Aetna, Inc.,
Aetna Health, Inc. (a NJ corp.), Aetna Health Insurance Co.,
Aetna Life Insurance Co., and the Rawlings Company, LLC.
2
benefits meeting on October 27, 2009 and received a plan design
document, which provided a top-level overview of the benefits
offered.
Minerley participated in the Weiss-Aug sponsored healthcare
benefits plan (the “Weiss-Aug Plan” or the “ERISA Plan”).
Debra
Myshkoff was the plan administrator for the Weiss-Aug Plan.
Weiss-Aug received copies of the relevant policies provided by
Aetna.
It is unclear whether Myshkoff provided copies of the
policies at the meeting, but it is undisputed that Minerley had
access to plan documents through an electronic portal provided
by Aetna.
As part of the Weiss-Aug Plan, Minerley received benefits
under an Aetna Citizen Choice Point of Service HMO Plan (the
“Aetna insurance policies” or the “Aetna policies”).
Minerley’s
insurance benefits consisted of two policies: the Pennsylvania
HMO policy (the “Aetna PA Policy”), underwritten by Aetna Health
Inc., and the New Jersey Non-Referred policy (the “Aetna NJ
Policy”), underwritten by the Aetna Health Insurance Company.
The Aetna PA Policy provided in-network benefits and emergency
services while the Aetna NJ Policy provided out-of-network and
non-referred medical services.
Each of these policies contained two overall documents.
The first document was an agreement between Weiss-Aug and the
underwriting Aetna entity.
The second document was a
3
Certificate of Coverage (“Certificate”).
Within this
Certificate is a section pertaining to the underwriting Aetna
entities’ right of recovery against an insured in specific
situations.
In relevant part, the Aetna PA Policy’s Certificate
stated:
The Member also specifically acknowledges HMO’s right
of reimbursement. This right of reimbursement
attaches, to the fullest extent permitted by law, when
HMO has provided health care benefits for injuries or
illness for which a third party is and the Member
and/or the Member’s representative has recovered any
amounts from the third party or any party making
payments on the third party’s behalf. By providing
any benefit under this Certificate, HMO is granted an
assignment of the proceeds of any settlement, judgment
or other payment received by the Member to the extent
of the full cost of all benefits provided by HMO.
(emphasis in original).
This was amended effective November 1,
2009, to state:
By accepting benefits under this Plan, the Member also
specifically acknowledges HMO’s right of
reimbursement. This right of reimbursement attaches
when this Plan has provided health care benefits for
expenses incurred due to Third Party injuries and the
Member or the Member’s representative has recovered
any amounts from any sources, including but not
limited to: payments made by a third Party or any
insurance company on behalf of the Third Party . . . .
(emphasis in original). 2
There are two processes for administrative exhaustion under
the Aetna PA Policy, the “appeal” process and the “complaint”
2
While Plaintiff denies Defendants’ characterization of this
policy provision, Plaintiff does not deny that the policy
contains this provision.
4
process.
The appeal process is used for “adverse benefit
determinations.”
An adverse benefit determination includes
“decisions made by the HMO that result in denial, reduction or
termination of a benefit or the amount paid for it.” (emphasis
in original).
An appeal occurs when there is a “request to the
HMO to reconsider an adverse benefit determination.” (emphasis
in original).
The complaint process starts with a “complaint.”
A
“complaint” is “an expression of dissatisfaction about . . . the
quality of coverage, operations or management policies of the
HMO.” (emphasis in original).
There are procedures, which are
not relevant to the issue at hand, that the Aetna PA Policy
prescribes for Aetna to follow when reviewing a “complaint.”
Although both an “appeal” and a “complaint” under the Aetna PA
Policy are subject to different procedures, both are subject to
an exhaustion of process provision.
This “must be exhausted
prior to . . . the establishing of any litigation.”
Myshkoff, the ERISA Employee Retirement Income Security Act
(“ERISA”) plan administrator for Weiss-Aug, stated that the
Aetna PA Policy was the relevant ERISA plan document for the
time period at issue. 3
Weiss-Aug submitted a single Form 5500
3
Plaintiff alleges that counsel spoke with Myshkoff and advised
her that the Aetna PA Policy was the relevant plan document.
Regardless of Plaintiff’s unsubstantiated allegation, Defendants
are correct that Myshkoff declared, under penalty of perjury,
5
for the year 2010, received one plan identification number, 502,
and identified through various schedules that Aetna Health,
Inc., Sun Life and Health Insurance Company, and Unum Life
Insurance Company of America would provide benefits.
On May 20, 2010, Minerley was involved in a motor vehicle
accident in Morris County, New Jersey.
He sustained multiple
injuries, including fractured ribs, fractured vertebrae, and
herniated disks.
He was treated at St. Clare’s Hospital and
Morristown Memorial Hospital.
Minerley’s medical treatments
totaled $3,512.82 and were paid for by his Aetna PA Policy. 4
Minerley retained a personal injury attorney, Charles
Kannebecker.
Defendant Rawlings, which was Aetna’s subrogation
and reimbursement claims vendor at the time, notified
Kannebecker on July 21, 2010 of the Aetna PA Policy’s
reimbursement provision discussed supra.
Minerley later
successfully recovered from the third-party tortfeasor in this
accident.
On January 9, 2013, Rawlings received a reimbursement
check from Kannebecker, sent on Minerley’s behalf, in the amount
of $3,512.82 — the exact amount of the health benefits provided.
that the Aetna PA Policy was the relevant plan document at the
time of Minerley’s accident. This is further supported by her
deposition testimony, where she states the same.
4
Again, Plaintiff denies Defendants’ characterization of these
facts, but admits that “Defendants produced records suggesting
that the benefits were paid through the” Aetna PA Policy.
6
Minerley did not contest this policy provision through the
administrative procedures set forth in the Aetna PA Policy (or
the Aetna NJ Policy) as described supra.
Minerley claims he did
not do so because he never received a “Notice of Adverse Benefit
Determination.”
Defendants do not contest that Minerley did not
receive a document with that title, but do state that the July
21, 2010 letter from Rawlings and their own filings in this case
serve as notice of their adverse benefit determination.
Instead
of pursuing his administrative remedies, Minerley, along with
Michelle Roche and Tim Singleton, filed a complaint against
Defendants in the New Jersey Superior Court, Law Division,
Atlantic County.
March 7, 2013.
Defendants removed the action to this Court on
Multiple opinions, motion practice, and
discovery ensued.
Currently, Minerley is the only Plaintiff in this case.
Singleton’s claims were dismissed on March 1, 2016 [45, 46].
Minerley, through his amended complaint, now claims the
following:
•
Aetna violated 29 U.S.C. § 1132(a)(1)(B) by denying
benefits to which Minerley was entitled; and
•
Aetna violated 29 U.S. § 1004(a)(1)(A) and 29 U.S.C.
§ 1132(a)(3) (concerning breaches of fiduciary duty) by
requiring reimbursement of Minerley’s tort claim, for
allegedly misrepresenting its right to reimbursement, and
7
by failing to avoid the alleged conflict of interest in
demanding reimbursement.
All parties filed their respective summary judgment motions on
February 9, 2018.
These motions were fully briefed and are now
ripe for adjudication.
ANALYSIS
A.
Subject Matter Jurisdiction
This Court exercises jurisdiction pursuant to 28 U.S.C. §
1331 and 29 U.S.C. § 1132(f).
B.
Summary Judgment Standard
Summary judgment is appropriate where the Court is
satisfied that “‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits if any,’ . . . demonstrate the absence of a genuine
issue of material fact” and that the moving party is entitled to
a judgment as a matter of law.
Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986) (citing FED. R. CIV. P. 56).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A fact is “material” if, under the governing
substantive law, a dispute about the fact might affect the
outcome of the suit.
Id.
“In considering a motion for summary
judgment, a district court may not make credibility
8
determinations or engage in any weighing of the evidence;
instead, the non-moving party’s evidence ‘is to be believed and
all justifiable inferences are to be drawn in his favor.’”
Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)
(citing Anderson, 477 U.S. at 255).
Initially, the moving party bears the burden of
demonstrating the absence of a genuine issue of material fact.
Celotex, 477 U.S. at 323 (“[A] party seeking summary judgment
always bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any,’ which it believes demonstrate the absence
of a genuine issue of material fact.”); see Singletary v. Pa.
Dep’t of Corr., 266 F.3d 186, 192 n.2 (3d Cir. 2001) (“Although
the initial burden is on the summary judgment movant to show the
absence of a genuine issue of material fact, ‘the burden on the
moving party may be discharged by “showing”—that is, pointing
out to the district court—that there is an absence of evidence
to support the nonmoving party’s case’ when the nonmoving party
bears the ultimate burden of proof.” (citing Celotex, 477 U.S.
at 325)).
Once the moving party has met this burden, the nonmoving
party must identify, by affidavits or otherwise, specific facts
9
showing that there is a genuine issue for trial.
U.S. at 324.
Celotex, 477
A “party opposing summary judgment ‘may not rest
upon the mere allegations or denials of the . . . pleading[s].’”
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
For
“the non-moving party[] to prevail, [that party] must ‘make a
showing sufficient to establish the existence of [every] element
essential to that party’s case, and on which that party will
bear the burden of proof at trial.’”
Cooper v. Sniezek, 418 F.
App’x 56, 58 (3d Cir. 2011) (citing Celotex, 477 U.S. at 322).
Thus, to withstand a properly supported motion for summary
judgment, the nonmoving party must identify specific facts and
affirmative evidence that contradict those offered by the moving
party.
Anderson, 477 U.S. at 257.
If this case proceeds to trial, the remaining issues will
be tried before this Court in a bench trial.
“When deciding a
motion for summary judgment, it is not our role to evaluate the
evidence and decide the truth of the matter, but to determine
whether there is a genuine issue for trial.”
Rubin v.
Amerihealth Adm’rs, Inc., No. 12-3719, 2013 WL 3967569, at *8
(E.D. Pa. Aug. 2, 2013) (citing Anderson, 477 U.S. at 249).
“A
judge does not sit as a trier of fact when deciding a motion for
summary judgment even if the case is scheduled to be heard
without a jury.”
Id. (quoting Stewart v. Bert Bell/Pete Rozelle
NFL Player Ret. Plan, No. 12-3719, 2012 WL 122362, at *4 (D. Md.
10
Jan. 12, 2012)).
But see Chao v. Local 54, Hotel Emps. & Rest.
Emps. Int’l Union, 166 F. Supp. 2d 109, 116 (D.N.J. 2001)
(“While questions of ‘reasonableness’ involve a primarily
factual inquiry, in a non-jury case, where the material
evidentiary facts relating to the issue of ‘reasonableness’ have
been fully developed in the record and are undisputed, the Court
may appropriately grant summary judgment if a bench trial would
not enhance its ability to draw inferences and conclusions.”
(citing Coats & Clark, Inc. v. Gay, 755 F.2d 1506, 1509-10 (11th
Cir. 1985); Nunez v. Superior Oil Co., 572 F.2d 1119, 1123-24
(5th Cir. 1978))); Coleman v. Mfrs. Hanover Corp., No. 89-1249,
1990 WL 27370, at *5 n.4 (E.D. Pa. Mar. 14, 1990) (“To the
extent that the court must draw inferences from the undisputed
evidentiary facts to determine whether there has been prohibited
discrimination, the court in a nonjury case is entitled to draw
such inferences and conclusions on motions for summary judgment
if a bench trial would not enhance its ability to draw those
inferences and conclusions.” (citing Coats & Clark, 755 F.2d at
1509-10; Nunez, 572 F.2d at 1123-24; Phillips v. Amoco Oil Co.,
614 F. Supp. 694, 723 n.35 (D. Ala. 1985), aff’d, 799 F.2d 1164
(11th Cir. 1986))).
C.
Weiss-Aug’s ERISA Plan
The Court will address the arguments by both sides
concerning whether the Aetna PA Policy may properly be
11
considered an ERISA plan document.
These arguments were briefed
in both Plaintiff’s Motion for Partial Summary Judgment and
Defendants’ Motion for Summary Judgment.
This Court has
considered the parties’ respective positions and holds that the
Aetna PA Policy is an ERISA plan document under the Weiss-Aug
Plan and may properly control the rights and obligations of the
parties in this case.
By way of background, ERISA defines an “employee welfare
benefit plan” as
any plan, fund, or program which was heretofore or is
hereafter established or maintained by an employer or
by an employee organization, or by both, to the extent
that such plan, fund, or program was established or is
maintained for the purposes of providing for its
participants or their beneficiaries, through insurance
or otherwise
certain benefits.
29 U.S.C. § 1002(1). 5
This plan must be
“established and maintained pursuant to a written instrument.”
Plaintiff essentially argues that an insurance policy may
not serve as an ERISA plan document, while Defendant argues that
they may.
Plaintiff relies on the ERISA statute and
corresponding regulations and case law.
5
In Section VI of Plaintiff’s Motion for Partial Summary
Judgment, Plaintiff argues that an insurance policy cannot be an
ERISA plan as defined supra. As described in the case law
infra, multiple insurance policies can be the “written
instrument” evidencing an ERISA plan. There is a difference
between an ERISA plan, which is comprised of all the insurance
policies here, and an ERISA plan document, which are the Aetna
insurance policies here.
12
a. The Contents of the Weiss-Aug ERISA Plan Document
Plaintiff’s first argument centers on Weiss Aug’s Form
5500.
Before analyzing the arguments, additional context is
appropriate.
Form 5500 is a document submitted by an ERISA plan
administrator to the Internal Revenue Service (“IRS”), which, in
turn, provides copies to the Department of Labor (“DOL”).
Form
5500, also referred to as the “annual report” generally shows
financial information concerning an employer-sponsored benefit
plan.
See 29 U.S.C. § 1023.
When an employer-sponsored benefit plan contains any
benefits “purchased from and guaranteed by an insurance company,
insurance service, or other similar organization” then a
Schedule A must be attached for every defined benefit plan.
U.S.C. § 1023(e).
29
In fact, Schedule A itself instructs the
filer to “[p]rovide information for each contract on a separate
Schedule A.”
In this case, Weiss-Aug filed a Form 5500 in 2010 for a
plan entitled “Weiss-Aug Co., Inc. Employee Health Care Plan.”
The Form 5500 contained four Schedule A’s corresponding to the
benefits provided under the plan through insurance companies.
The first Schedule A discloses that “Aetna Health, Inc.”
provides health and prescription drug benefits pursuant to an
HMO contract.
13
Plaintiff’s argument is that the Form 5500 shows that
Weiss-Aug’s ERISA Plan, which controls the rights and
obligations of Plaintiff, is different than the Aetna PA Policy.
Plaintiff contends that because Form 5500 states the name of the
ERISA plan as the “Weiss-Aug Co., Inc. Employee Health Care
Plan,” but the name of the overall health insurance policy is
“Aetna Choice POS Liberty Flex Benefits Package” the Aetna PA
Policy cannot control Plaintiff’s rights and obligations.
The
obvious consequence is that Minerley is no longer required to
reimburse Aetna from his third-party award. 6
Plaintiff cites no
part of the ERISA statute or corresponding regulations, nor any
case law in support of this contention.
Defendants counter by essentially arguing that the
insurance policies, as a group, are the Weiss-Aug benefits plan. 7
Defendants cite to a long string of decisional law in multiple
circuits as evidence that this is appropriate under ERISA and
6
Plaintiff does not provide any insight into whether this
argument would require the Court to find that Plaintiff was not
entitled to any benefits under the plan.
7
Plaintiff’s reply brief admits that insurance policies may
constitute ERISA plan documents. Plaintiff then attempts to
distinguish the cases discussed infra. While the facts in each
case may differ from the present facts, Plaintiff has not
rebutted the central premise encapsulated by each of these
cases: an insurance policy may be a “written instrument” meaning
it may serve as one of the documents comprising an ERISA plan.
14
assert that no part of the ERISA statute or its animating
regulations deem this procedure a violation.
This Court adopts the case law presented by Defendants, and
finds that insurance policies may serve as both ERISA plan
documents and as plan assets. 8
“[A]n insurance policy may
constitute the ‘written instrument’ of an ERISA plan.”
v. Sec. Pac. Corp., 61 F.3d 1437, 1441 (9th Cir. 1995).
Cinelli
See
also Frazier v. Life Ins. Co. of N. Am., 725 F.3d 560, 566 (6th
Cir. 2013) (“[T]here appears to be no reason [under ERISA] why
an insurance policy cannot be both a plan document and asset.”);
Gable v. Sweetheart Cup Co., 35 F.3d 851, 856 (4th Cir. 1994)
(“An insurance policy may constitute the ‘written instrument’ of
an ERISA plan . . . .”).
For the Aetna insurance policies to serve as both plan
assets and plan documents, however, they must still be a
8
This Court also rejects the argument made by Plaintiff in
Section III of its Motion for Partial Summary Judgment. There,
Plaintiff argues that if Aetna’s insurance policies are
considered ERISA plan documents, then all the other insurance
Weiss-Aug procured for its employees are also plan documents.
Plaintiff asserts that there can be only one ERISA plan
document. That is not true. Tetreault v. Reliance Std. Life
Ins. Co., 769 F.3d 49, 55 (1st Cir. 2014) (“ERISA certainly
permits more than one document to make up a benefit plan’s
required written instrument.”). Accord Huffman v. Prudential
Ins. Co. of Am., No. 2:10-cv-05135, 2018 U.S. Dist. LEXIS 13665,
at *11-12 (E.D. Pa. Jan. 29, 2018) (“[I]n many cases a series of
documents together comprise the plan, because ‘ERISA certainly
permits more than one document to make up a benefit plan’s
required written instrument.’” (quoting Tetreault, 769 F.3d at
55)).
15
“written instrument.”
A document may serve as an ERISA plan
document if, “from the surrounding circumstances a reasonable
person can ascertain the intended benefits, a class of
beneficiaries, the source of financing, and procedures for
receiving benefits.”
Menkes v. Prudential Ins. Co. of Am., 762
F.3d 285, 190 (3d Cir. 2014).
The Aetna policies contain
information on the intended benefits (generally, health
insurance), the class of beneficiaries (employees at Weiss-Aug),
the source of financing (premiums paid by Weiss-Aug and its
employees), and the procedures for receiving benefits.
Plaintiff presents a few more arguments on this point in
its reply brief.
First, Plaintiff continues to strenuously
argue that there is a single ERISA plan document and that it
cannot be Aetna’s insurance policies. 9
Second, Plaintiff argues
that Weiss-Aug never possessed the Aetna PA Policy and never
disseminated it until four years after the instant litigation
began.
Third, Plaintiff argues that the summary document
9
Plaintiff also argues in Section XI of its Motion for Partial
Summary Judgment that the 2015 creation and dissemination by
Weiss-Aug of a new Weiss-Aug Co. Inc. Employee Benefits Plan is
evidence that there was not an ERISA plan in place in 2010.
What Weiss-Aug may or may not have done in 2015 is irrelevant to
the events at issue here. Further, the fact that Plaintiff
believes this is a proper ERISA plan, even though it
“incorporates the component insurance policies” into the plan —
a so-called “wrap” document — is contradictory of many of
Plaintiffs arguments that an insurance policy cannot also be an
ERISA plan document.
16
distributed at the meeting was the only plan document, and it
cannot control.
As to the first argument, Plaintiff provides no factual
support.
It has spent five years litigating this case and has
failed to uncover a single document that Weiss-Aug created that
is the so-called “ERISA Master Plan.”
Just because Weiss-Aug
gave its plan a name on a Form 5500 does not raise a genuine
issue of material fact that Weiss-Aug created some sort of
master plan.
In fact, Myshkoff’s testimony states otherwise.
Weiss-Aug used the insurance policies it purchased to serve as
ERISA plan documents.
As to the second argument, Plaintiff again provides no
factual support.
Defendants have produced a March 4, 2010
letter showing that the Aetna PA Policy was sent to Mary Dante
at Weiss-Aug.
Whether Myshkoff remembers receiving the policy
at that time is irrelevant, as there is clear documentary
evidence stating Weiss-Aug did receive it.
As to the third argument, Plaintiff is without either
factual or legal support.
It is irrelevant whether a plan
design document was distributed to Weiss-Aug employees at the
October 27, 2009 meeting, because Plaintiff argues that summary
documents create no legal rights or obligations not within the
plan documents.
Cigna Corp. v. Amara, 563 U.S. 421, 438 (2011)
(“[W]e conclude that the summary documents, important as they
17
are, provide communication with beneficiaries about the plan,
but that their statements do not themselves constitute the terms
of the plan . . . .”).
b. Weiss-Aug’s Adoption of the Aetna PA Policy as Part of
Its ERISA Plan
Next, Plaintiff argues that for an insurance policy to be
considered a plan document, the insurance policy must indicate
it is a plan document.
Defendants argue that an insurance
policy need not state it is a plan document for it to be legally
designated as such.
Further, Defendants argue that Weiss-Aug
believed the Aetna PA Policy to be a plan document.
Horn v. Berdon, Inc. Defined Ben. Pension Plan, 938 F.2d
125 (9th Cir. 1991) is instructive here.
There, the Ninth
Circuit determined that a board resolution was a plan document.
Id. at 127-28.
In reaching this holding, the Ninth Circuit
stated:
ERISA requires only that an employee benefit plan be
established and maintained by a “written instrument.”
29 U.S.C. § 1102(a)(1). No additional formalities are
required. In particular, there is no requirement that
documents claimed to collectively form the employee
benefit plan be formally labelled as such. We see no
reason to require an employer to comply with such a
formality not imposed by law.
See also Tetreault v. Reliance Std. Life Ins. Co., 769 F.3d 49,
55 (1st Cir. 2014) (citing the above Horn quotation favorably);
Milwaukee Area Joint Apprenticeship Training Comm. v. Howell, 67
F.3d 1333, 1338 (7th Cir. 1995) (same).
18
Neither Weiss-Aug nor
Aetna was obligated to label the Aetna policies as ERISA plan
documents for them to serve as such.
Moreover, there is evidence that Weiss-Aug adopted the
Aetna PA Policy as a plan document, because Myshkoff stated they
did.
Plaintiff’s citation to Myshkoff’s deposition is
misleading.
First, the question posed to Myshkoff did not ask
what she believed to be an ERISA plan document, but whether
anyone else identified to her documents as ERISA plan documents.
Second, Myshkoff clearly stated she believed that the insurance
policies from Aetna constituted an ERISA plan:
Q.
Okay. What other documents have ever been
identified as constituting the ERISA plan?
* * *
A.
Other documents that have been identified and
that provided are the certificate of coverage, the
agreements, the plan design documents. Those are the
documents I’m familiar with and that I’ve seen.
(objections omitted).
The Aetna PA Policy, comprised of the
group agreement and certificate of coverage, was identified by
Myshkoff as a document “constituting the ERISA plan” at WeissAug.
Plan.
Myshkoff was the plan administrator for the Weiss-Aug
She was in the best position to identify which documents
did and did not constitute the Weiss-Aug Plan.
Plaintiff’s
argument does not show that the Aetna PA Policy was not a WeissAug Plan document. 10
10
Plaintiff’s argument in their reply brief requiring adoption
of the Aetna PA Policy through the formal procedure set forth in
19
Plaintiff is incorrect—as argued in his reply brief—that
the case law requires an employer to specifically intend to
designate particular documents as its ERISA plan documents.
Instead, Menkes stands, in part, for the proposition that a plan
only comes to fruition when the employer “has expressed an
intention to provide benefits on a regular and long-term basis.”
762 F.3d at 290.
Even it did, Myshkoff, the plan administrator,
testified that she believed the certificates of coverage and the
group agreements — the Aetna policies — constituted the ERISA
plan.
c. The Effects of the Alleged ERISA Violations on whether
the Aetna PA Policy is an ERISA Plan Document
Sections IV, V, and VII-X of Plaintiff’s Motion for Partial
Summary Judgment detail alleged ERISA violations (separate and
apart from those contained in the amended complaint) committed
by Aetna and Weiss-Aug.
Before addressing these arguments, it
is important to clarify what roles Aetna and Weiss-Aug played.
Aetna provided insurance to Weiss-Aug to offer to its employees.
the so-called ERISA Master Plan document is also unavailing.
Plaintiff has not brought forward this document and, as a
result, cannot cite to any breach of procedure supposedly
contained in it. The case law cited is also unhelpful, as those
cases are concerned with adoption or amendment when there is a
single, formal document delineating the procedure that must be
followed. ERISA does not require such a document and there is
no such document here.
20
Weiss-Aug served as the “plan sponsor” and Myshkoff, an employee
of Weiss-Aug, was the “plan administrator” of the ERISA plan.
In response to all of Plaintiff’s arguments, which are
described separately below, Defendants argue: (1) they were
neither the plan sponsor or plan administrator, so should not
suffer the legal consequences of any alleged violations by those
individuals/entities; (2) they met all duties and obligations
required of them under ERISA and corresponding regulations; and
(3) Minerley, at the very least, had electronic access to the
Aetna PA Policy and the Aetna NJ Policy.
i. Section IV
Plaintiff makes two arguments under Section IV.
First,
Plaintiff argues that a summary plan document (“SPD”) cannot
alter the terms of an ERISA plan.
Second, Plaintiff argues that
Aetna’s ability to cancel or change its insurance policy at any
time circumvents the ERISA requirement that a plan administrator
cannot unilaterally alter the terms of the ERISA plan.
Plaintiff’s first argument is irrelevant to the facts of
this case.
No SPD is at issue in this case, and Defendants are
not claiming that an SPD’s terms supersede those of their own
insurance policies. 11
In fact, Defendants argue the opposite.
11
Plaintiff argues in Section X that because only a summary plan
document was disseminated to employees, only its terms may
control. This is contradictory to Plaintiff’s own argument.
Plaintiff’s contention is also unsupported by record facts, as
21
Plaintiff’s second argument is not supported by the facts
or the ERISA statue.
If Aetna had chosen to terminate its
contract with Weiss-Aug, it would not have terminated WeissAug’s entire ERISA plan, just a portion of it. 12
Moreover, as
Defendants suggest, 29 U.S.C. § 1341 does not prohibit Aetna,
but the plan administrator, Myshkoff.
Plaintiff’s amendment argument also misses the mark.
Because the Aetna policies are a part of the ERISA plan, they
delineate the amendment procedures agreed to by the plan
sponsor, Weiss-Aug.
If Aetna amends its policies as required
under the policy, then amendment is proper, as Weiss-Aug agreed
to this amendment procedure when it procured the insurance.
Plaintiff does not complain that any amendment was in violation
of the insurance policies.
ii. Section V
In this section, Plaintiff argues that because Aetna made
changes to the Aetna PA Policy and did not notify the insureds,
the Aetna PA Policy cannot be an ERISA plan document.
Plaintiff had access to the Aetna PA Policy through an online
portal.
12
Plaintiff has continually conflated the ERISA plan with an
ERISA plan document. These are not the same. ERISA plan
documents compose the ERISA plan. ERISA plan documents can
include a group of insurance policies, as discussed supra.
22
Again, Plaintiff incorrectly states that Aetna was a plan
administrator. 13
The ERISA regulation found at 29 C.F.R. §
2520.104b-3 does not require Aetna to provide a “[s]ummary of
material modifications to the plan;” it requires Myshkoff, the
plan administrator, to provide it.
While, undoubtedly,
amendments were made, Plaintiff does not cite to any fact of
record to support his contention that notice of the change to
the policy was not given to him.
It is also undisputed that
Minerley could access his Aetna policies at any time through an
online portal.
Even if Aetna was required to give notice,
Plaintiff provides no fact — as is his obligation at summary
judgment — showing that Aetna did not provide notice.
iii. Section VII and VIII
Plaintiff argues here that Aetna PA Policy was never
disclosed to Minerley as required under ERISA.
Plaintiff admits
that the Aetna NJ Policy was disclosed to Minerley, and as a
result states that only the Aetna NJ Policy may control.
As
stated previously, the undisputed evidence shows that Minerley
had access to the Aetna PA Policy through an online portal.
Minerley states in his declaration that he never received the
Aetna PA Policy from Defendants or his employer.
13
But, he admits
Here, Plaintiff states Aetna is a “claims administrator and
not a Plan sponsor.” In context, it appears that the Plaintiff
meant to say Aetna is a plan administrator.
23
in his deposition that he accessed the Aetna website where this
exact plan was stored.
While the Aetna PA Policy may not have
been distributed to him in paper form, it was available to him
through the online portal.
Whether he chose to access it or not
does not excuse him from its obligations.
Plaintiff also cites two cases from the Second Circuit in
his reply brief concerning the legal consequence of not
providing a plan document.
course.
Neither case changes this Court’s
In Burke v. Kodak Ret. Income Plan, 336 F.3d 103 (2d
Cir. 2003), the Second Circuit examined a situation where an SPD
conflicted with a plan.
Burke is not this case, as the concern
here is whether the Aetna PA Policy was available to Minerley.
The other case, Davis v. NMU Pension & Welfare Plan, 810 F.
Supp. 532 (S.D.N.Y. 1992) concerns the application of New York
state civil practice rules and an attempt to shorten a statute
of limitations period.
The court found that the plan had failed
to include the shortened limitations period in the “actual trust
agreement establishing the Plan or in collective bargaining
agreements.”
Id. at 534.
The terms at issue here were
disclosed in the Aetna PA Policy, so there is no issue with
whether the terms were improperly disclosed in another
document. 14
14
Plaintiff similarly argues under section IX that the Aetna PA
Policy could not constitute an ERISA plan document because it
24
iv. Plaintiff’s Arguments in His Response to
Defendants’ Motion for Summary Judgment 15
Plaintiff’s make two other arguments within their response
to Defendants’ Motion for Summary Judgment.
First, Plaintiff
argues that Defendants violated a rule that plan benefits may
not be determined by the domicile of the plan member.
Second,
Plaintiff again argues that the subrogation right is not a part
of the ERISA plan.
Plaintiff’s first argument is incorrect.
It is important
to first note that Plaintiff has misquoted Prudential Ins. v.
Doe, 140 F.3d 785 (8th Cir. 1998).
This case does not stand for
was not made available for inspection nor were copies furnished.
As detailed supra, it is uncontested that Minerley admitted he
had access to an Aetna online portal where his policies were
stored. He also admitted that he logged into this account.
Plaintiff does not rebut this fact. It was available for
inspection and electronic copies were furnished. Again,
Plaintiff’s argument that Weiss-Aug never received the policies
is incorrect, as Weiss-Aug received a March 4, 2010 letter
containing the Aetna policies. Finally, Plaintiff does not
argue that a failure by the plan administrator, Myshkoff, to
distribute copies of the policies automatically voids the
insurance. Plaintiff’s argument in his reply brief that
disclosing the wrong documents requires the Court to enforce
only the documents disclosed is similarly inapplicable. Because
this Court finds that the Aetna PA Policy was disclosed, this
case law is unavailing.
15
Plaintiff presented a third argument concerning Loren v. Blue
Cross & Blue Shield, 505 F.3d 598 (6th Cir. 2007). This
argument is not on point. Loren states that the filing of a
single Form 5500 creates the presumption that the “employer
intended to create only one ERISA plan.” Id. at 605-06.
Defendants do not assert that there is more than one ERISA plan,
just that there are multiple ERISA plan documents — the Aetna
policies — that make up the substance of that plan.
25
the proposition that “parties may not contract to choose a state
law as the governing law in an ERISA-governed plan” (emphasis
added) but that “parties may not contract to choose state law as
the governing law of an ERISA-governed benefit plan.”
791.
Id. at
The addition of “a” alters the meaning of the quote.
Aetna did not choose state law as the governing law, as it
contracted to have federal and Pennsylvania law apply to the
Aetna PA Policy.
Moreover, Plaintiff’s reliance on Conkright v. Frommert,
559 U.S. 506 (2010) is misplaced.
The opinion in Conkright
concerned whether the Second Circuit may alter the standard of
review of a District Court over a plan administrator when a plan
administrator has power under the ERISA plan to construe
ambiguous terms.
The Supreme Court’s quote, stating that
“[b]enefits cannot be different depending upon where” a
beneficiary resides, had no relation to whether the
beneficiaries were covered by different insurance policies.
at 521.
Id.
The Supreme Court was concerned that creation of
different law at the Circuit level may give rise to different
interpretations and different rights for beneficiaries under the
same ERISA plan.
Obviously, this is not the case here.
Plaintiff acknowledges such in a footnote, stating that
insurance policy coverage may differ from state-to-state under
ERISA.
26
Plaintiff’s second argument also fails.
As discussed
supra, the Aetna PA Policy clearly discloses that Aetna has a
subrogation right.
Whether or not a SPD complies with 29 C.F.R.
§ 2520.102-3(l) is of no moment.
That regulation governs the
actions of the plan administrator, not the insurance company.
As a result, Plaintiff’s Partial Motion for Summary
Judgment will be denied.
D.
Applicability of the Aetna PA Policy to Minerley
This Court has determined that the Aetna PA Policy is an
ERISA plan document under Weiss-Aug’s employer-sponsored
benefits program.
Thus, it has rejected all of Plaintiff’s
arguments that the ERISA statute or its corresponding
regulations preclude the Aetna PA Policy from being considered
in this case.
It is undisputed that Minerley was a beneficiary
under the Aetna PA Policy and that the Aetna PA Policy paid for
all of the health benefits he received following his accident.
Therefore, the threshold issue of which insurance policy applies
to Minerley has been addressed: it is the Aetna PA Policy.
E.
Plaintiff’s Requirement to Exhaust Administrative
Remedies
Defendants assert in their motion for summary judgment that
Plaintiff’s claims are improperly before this Court because
Plaintiff has failed to exhaust administrative rights as
required under the Aetna PA Policy.
27
Because this Court finds
that the Aetna PA Policy applies to this dispute and that it
contains an administrative exhaustion requirement, this Court
will start by examining Defendants’ argument concerning
Minerley’s requirement to exhaust administrative remedies.
The law is clear on this point: “[e]xcept in limited
circumstances . . . a federal court will not entertain an ERISA
claim unless the plaintiff has exhausted the remedies available
under the plan.”
Harrow v. Prudential Ins. Co. of Am., 279 F.3d
244, 249 (3d Cir. 2002) (quoting Weldon v. Kraft, Inc., 896 F.2d
793, 800 (3d Cir. 1990)) (omission in original).
However, “[a]
plaintiff is excused from exhausting administrative procedures
under ERISA if it would be futile to do so.”
Id. (citing Berger
v. Edgewater Steel Co., 911 F.2d 911, 916 (3d Cir. 1990)).
First, this Court will determine whether exhaustion is required,
then this Court will determine whether exhaustion would be
futile.
There are two ways in which Defendants argue exhaustion may
be required under the Aetna PA Policy.
First, the request for
reimbursement may be considered an “adverse benefit
determination” because the reimbursement resulted “in denial,
reduction, or termination of a benefit or the amount paid for
it.”
An adverse benefit determination may be made when Aetna
determines that a benefit “is excluded from coverage.”
no doubt that Aetna required a reimbursement reduced or
28
There is
terminated the health benefit that Minerley received, namely,
the emergency services after his accident.
This was a
determination that these emergency services were excluded from
coverage because a third-party was legally obligated to pay for
them.
Once an adverse benefit determination is made, the
beneficiary must make use of the Aetna PA Policy’s appeal
process before bringing an action in court.
As the Aetna PA
Policy states, the appeal process is “mandatory and must be
exhausted prior to . . . the establishing of any litigation . .
. regarding either any alleged breach of the Group Agreement or
Certificate by HMO, or any matter within the scope of the
Complaints and Appeals process.” (emphasis in original).
Second, Plaintiff’s dissatisfaction with the reimbursement
request may be considered a “complaint.”
Under the Aetna PA
Policy, a complaint “is an expression of dissatisfaction about .
. . the quality of coverage, operations or management policies
of the HMO.”
If Minerley was unhappy with Aetna’s reimbursement
policy, which the present years-long litigation conclusively
shows he is, then he had a “complaint.”
A complaint has a
separate administrative track than an appeal.
This separate
track is still “mandatory and must be exhausted prior to . . .
the establishing of any litigation . . . regarding either any
alleged breach of the Group Agreement or Certificate by HMO, or
29
any matter within the scope of the Complaints and Appeals
process.” (emphasis in original).
This Court finds that Minerley had, at least, a
contractually defined “complaint.”
Minerley’s dissatisfaction
with the “quality of coverage, operations or management
policies” of the Aetna PA Policy or the Aetna Defendants — in
other words, his dissatisfaction with the reimbursement
provisions — was subject to administrative exhaustion
requirements.
It is undisputed that Minerley never complained
to Aetna when he received the reimbursement request in July 2010
and never worked his way through the prescribed administrative
process.
This was contractually required before the instant
litigation could be filed.
This Court finds that exhaustion is
contractually required.
Plaintiff attempts to resist the clear terms of the Aetna
PA Policy by submitting seven different arguments.
These
arguments center variously on the definitions and procedures
concerning “adverse benefit determinations” and “claims.” 16
Plaintiff’s arguments are unavailing.
Even if this Court
determined that there was no “claim” or no “adverse benefit
determination” it is clear that Minerley had a “complaint” about
16
The Court notes here that Plaintiff’s citations in this
section of their brief are all to the Aetna NJ Policy, not the
Aetna PA Policy. This makes a difference, as the language
differs between the two policies.
30
his Aetna PA Policy.
Minerley was obligated to exhaust his
administrative remedies under the contract before bringing this
case to this Court.
Plaintiff makes several other arguments concerning the
exhaustion requirement in the Aetna PA Policy.
First, Plaintiff
argues that 29 C.F.R. § 2590.715-2719 required Defendants to
send a “Notice of Adverse Benefit Determination” in a certain
manner.
Defendants correctly point out that this regulation,
per subsection (g), notes it is only applicable to group health
plans beginning on or after January 1, 2017.
2009.
This plan began in
Second, Plaintiff does not address why Minerley’s “claim”
is still not subject to administrative exhaustion.
Plaintiff is
not deemed to have exhausted his administrative remedies per 29
C.F.R. § 2590.715-2719.
Second, Plaintiff argues that the reimbursement provision
of the Aetna PA Policy is ambiguous as to whether Plaintiff must
appeal a reimbursement denial.
It is clear that Plaintiff has a
“claim” and did not pursue his administrative remedy under the
Aetna PA Policy.
He cannot complain about the allegedly poor
draftsmanship of another section, when the section on exhaustion
was clear.
This Court need not reach New Jersey law on the
subject, to the extent it applies.
Third, Plaintiff argues that this Court is not deprived of
subject matter jurisdiction just because he did not exhaust his
31
administrative remedies.
He also admits that it is a “basic
tenet” of administrative law that exhaustion is required as a
prerequisite to suit.
This Court declines to exercise its
discretion to ignore this “basic tenet,” especially when
Plaintiff provides no good reason to ignore it.
Fourth, Plaintiff argues that this case presents solely
questions of statutory interpretation, not medical or plan
expertise.
As presented by Plaintiff, that is not this case.
This case centers on the interpretation of an insurance policy
and Defendants right to reimbursement.
The interpretation of
the Aetna PA Policy is something those involved in Aetna’s
administrative review process are keenly aware of and wellversed in.
Again, the Court declines to exercise its discretion
to ignore the exhaustion requirement.
Fifth, Plaintiff argues that administrative exhaustion
principles do not apply when there are claims of across-theboard errors.
Plaintiff cites Sportscare of Am., P.C. v.
Multiplan, Inc., No. 10-cv-04414, 2013 U.S. Dist. LEXIS 54947,
at *31-32 (D.N.J. Apr. 17, 2013) for this proposition.
This
case is distinguishable because, in relevant part, the Court
there found that the administrative exhaustion requirement under
the contract was inapplicable.
Id.
In other words, the
situation the claimant presented in that case did not fit within
the terms of the contract.
This Court finds Plaintiff has a
32
“claim” and was required to pursue administrative remedies
before bringing it to this Court.
Moreover, there are fact-specific determinations that are
made before any reimbursement demand is made.
Aetna must
determine what policy covers the individual, what policy paid
for the health care, whether the policy provides a subrogation
right, and whether the situation gives rise to that right.
Finally, Plaintiff argues that exhaustion is not required
because it would be futile.
Generally, “[w]hether to excuse
exhaustion on futility grounds rests upon weighing several
factors, including: (1) whether plaintiff diligently pursued
administrative relief; (2) whether plaintiff acted reasonabl[y]
in seeking immediate judicial review under the circumstances;
(3) existence of a fixed policy denying benefits; (4) failure of
the insurance company to comply with its own internal
administrative procedures; and (5) testimony of plan
administrators that any administrative appeal was futile.”
Harrow, 279 F.3d at 250.
Plaintiff has not shown that any factor applies to this
case.
It is undisputed that Plaintiff did not bring his “claim”
to Aetna, has not shown that Aetna has a “fixed policy denying
benefits”, has not shown that Aetna failed to comply with its
own procedures, and has not provided testimony from Aetna
stating that an administrative appeal would be futile.
33
Instead,
Plaintiff decided to reimburse Aetna and then bring suit almost
immediately thereafter.
Plaintiff’s argument concerning
futility is factually and legally unsupported.
Thus, Plaintiff has presented no reason why this Court
should not require, as a prerequisite to suit, Plaintiff to
exhaust administrative remedies.
F.
Plaintiff’s Claims Requiring Administrative Exhaustion
Plaintiff presents a final argument.
Plaintiff argues that
even if his claims are generally subject to exhaustion, the
fiduciary duty claims he has pled are not subject to an
administrative exhaustion requirement.
This issue was fully
briefed and decided in this Court’s prior order denying
Defendants’ Motion to Dismiss, Motion to Strike, and/or Motion
for Summary Judgment [54, 64, 67, 68, 79, 80].
Defendants rely
on essentially the same arguments and case law that they relied
upon then to attempt to force these fiduciary duty claims into
the exhaustion process now.
Thus, this Court will not disturb
its previous holding.
This Court notes that Defendants also argue that
Plaintiff’s fiduciary duty claims should be dismissed.
Unfortunately, Defendants spend little time discussing it.
For
example, while Defendants contend that Pennsylvania law applies,
Defendants do not show why either Pennsylvania law or ERISA
would require this Court to dismiss these claims.
34
As argued,
without proper factual and legal support discussing each
fiduciary duty claim pleaded by Plaintiff, this Court declines
at this juncture to dismiss those claims because Defendants have
not met their burden at summary judgment.
CONCLUSION
Based on the foregoing analysis, Plaintiff’s Partial Motion
for Summary Judgment will be DENIED and Defendants’ Motion for
Summary Judgment will be GRANTED, IN PART, and DENIED, IN PART.
All claims but the fiduciary duty claims will be dismissed.
An appropriate Order will be entered.
Date: September 29, 2018
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
35
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