NOEL L. 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'
Our recitation of the facts is taken from Plaintiff's and Defendants' Statements of Material Facts Not in Dispute. This Court notes factual disagreement where applicable. Plaintiff Jay Minerley was an employee of Weiss-Aug Company Inc. ("Weiss-Aug"), 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 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 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:
(emphasis in original). This was amended effective November 1, 2009, to state:
(emphasis in original).
There are two processes for administrative exhaustion under the Aetna PA Policy, the "appeal" process and the "complaint" process. The appeal process is used for "adverse benefit determinations." An adverse benefit determination includes "decisions made by the
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
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.
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.
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
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
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:
All parties filed their respective summary judgment motions on February 9, 2018. These motions were fully briefed and are now ripe for adjudication.
This Court exercises jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(f).
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.
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.
Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact.
Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial.
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."
The Court will address the arguments by both sides concerning whether the Aetna PA Policy may properly be 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
certain benefits. 29 U.S.C. § 1002(1).
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.
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.
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. 29 U.S.C. § 1023(e). 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.
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.
Defendants counter by essentially arguing that the insurance policies, as a group, are the Weiss-Aug benefits plan.
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.
For the Aetna insurance policies to serve as both plan assets and plan documents, however, they must still be a "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."
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.
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.
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.
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:
(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 Weiss-Aug. Myshkoff was the plan administrator for the Weiss-Aug Plan. 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 Weiss-Aug Plan document.
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,
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. 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.
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.
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 Weiss-Aug's entire ERISA plan, just a portion of it.
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.
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.
Again, Plaintiff incorrectly states that Aetna was a plan administrator.
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. But, he admits 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. Neither case changes this Court's course. In
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
Moreover, Plaintiff's reliance on
Plaintiff's second argument also fails. As discussed
As a result, Plaintiff's Partial Motion for Summary Judgment will be denied.
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.
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. 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."
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." There is no doubt that Aetna required a reimbursement reduced or 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
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
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."
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. This plan began in 2009. 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 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
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."
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. 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.
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. 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.
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.
