Wagner Header

The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 

 

Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110


Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104

 

www.wagnerlawgroup.com

 

 

June 20, 2013 

 State and Federal Law Alert

 

Participants Given Incorrect Information about Scope of Group Health Coverage May Receive Monetary Damages

 

The United States Court of Appeals for the Seventh Circuit recently held that a group health plan participant may seek "make-whole" monetary damages under ERISA against a plan fiduciary for a misrepresentation that causes the participant harm.

  

In Kenseth v. Dean Health Plan, a plan participant sought verbal confirmation from the group health plan's insurer as to whether an expensive surgical procedure would be covered. The procedure was recommended by the participant's treating physician to correct serious health conditions that were caused by a gastric band procedure which the participant underwent 18 years earlier to treat obesity.

 

During the phone call with the insurer's Customer Service Department, the participant was informed that the procedure was covered. In providing this information, the Service Department failed to warn the participant that she could not rely upon advice provided over the phone. Further, the Service Department failed to ask whether the procedure was related to treatment for obesity, a condition specifically excluded under the group health plan's contract.

 

The insurer's Certificate of Insurance was ambiguous as to whether the recommended procedure was covered, and failed to provide a means by which plan participants could obtain authoritative determinations on coverage. Additionally, while the Certificate of Insurance invited participants to call Customer Service with coverage questions, it failed to warn that they could not rely on any advice received.

 

The participant underwent the second surgery and proceeded to file a claim with the health plan based upon the information she had received from the Service Department. The insurer denied coverage, claiming that the surgery was related to treatment for obesity.

 

In response, the participant sued, claiming a breach of fiduciary duty under ERISA based on the provision of misleading information and the denial of coverage.

 

In reviewing the participant's appeal, the Seventh Circuit held that, in accordance with the U.S. Supreme Court's decision in CIGNA Corp. v. Amara, appropriate equitable relief for ERISA claims may include make-whole monetary relief, including the recovery of medical expenses. Therefore, the Seventh Circuit remanded the case to the district court to determine whether the insurer had breached its fiduciary duties and, thereby, harmed the participant. If so, the Seventh Circuit directed the district court to fashion an appropriate equitable remedy to redress the participant's injury.

 

Kenseth establishes that a group health plan participant may be entitled to receive make-whole monetary relief under ERISA where a breach of fiduciary duty involves the provision of incorrect or misleading information about the scope of benefits under the plan. To avoid similar situations, employers should: (i) review their plan documents to ensure that they are clear and unambiguous; (ii) ensure that employees who communicate directly with plan participants receive adequate training and provide correct information; and (iii) advise plan participants and beneficiaries in the plan's summary plan description that the only representations regarding coverage that may be relied upon are those made in writing by an authorized person.

 

This Newsletter is protected by copyright. Material appearing herein may be reproduced with appropriate credit.

  

Pursuant to Internal Revenue Service Circular 230, we hereby inform you that any advice set forth herein with respect to US federal tax issues is not intended or written by The Wagner Law Group to be used and cannot be used, by you or any taxpayer, for the purpose of avoiding penalties that may be imposed on you or any other person under the Internal Revenue Code.

 

This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.