In Koehler v. Aetna Health Inc., No. 11-10458 (Fifth Cir. 2012), the plaintiff, Nancy Koehler (“Koehler”), was appealing the district court’s summary judgment dismissing her suit under ERISA to recover health insurance benefits under a health plan (the “Plan”).
The defendant, Aetna Health Inc. (“Aetna”), a Texas health maintenance organization (an “HMO”), provides and administers the Plan’s health insurance benefits under an agreement giving Aetna discretion to interpret the Plan’s terms. Aetna refused to reimburse Koehler for care she received from a specialist outside of the Aetna HMO to whom she had been referred by a physician in the HMO. Aetna denied her claim because the referral was not pre-authorized by Aetna. The district court found that, as a matter of law, Aetna did not abuse its discretion in denying coverage. However, the Fifth Circuit Court of Appeals (the “Court”) found that the Plan is ambiguous and the need for pre-authorization was not clearly stated in Aetna’s summary plan description (the “SPD”) for the Plan. The Court ruled that, under the circumstances of this case, it cannot be said as a matter of law that Aetna did not abuse its discretion in denying coverage. As such, the Court reversed the district court’s summary judgment and remanded the case for further proceedings.
As to the role of the SPD in the case, the Court said the following:
The parties agree that the relevant Plan provisions are found in the Plan’s “Certificate of Coverage” (the “COC”), which sets forth the Plan’s health insurance benefits. However, in addition to appearing in the Plan, the COC’s text also constitutes the SPD which ERISA requires plan administrators to provide to participants and beneficiaries. Thus, although a plan summary is a separate document from the plan itself, in this case the summary’s text is simply a verbatim copy of the underlying plan provisions.
Continuing, the Court found that the COC/SPD is ambiguous with respect to pre-authorization for outside services rendered on an ad hoc basis. Also, while the Plan gives Aetna discretion to resolve ambiguities in the Plan language in its favor (so that Aetna’s decisions in its favor are entitled to a deferential review by a court), Aetna’s discretion to resolve ambiguities in the Plan does not extend to the SPD, notwithstanding that in this instance the SPD is a verbatim copy of text in the Plan. Rather, ambiguities in an SPD are resolved in favor of the plan participant-here Koehler.
The Court noted that, in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), the Supreme Court held that the text of section 502(a)(1)(B) of ERISA does not authorize courts to enforce the terms of an SPD, because that provision only authorizes enforcement of the “`terms of the plan.'” However, the Supreme Court said further that Section 502(a)(1)(B) does allow courts to look outside the plan’s written language in deciding what those terms are, i.e., what the plan language means. Further, even if the plan’s language unambiguously supports the administrator’s decision, a participant may still seek to hold the administrator to conflicting terms in the SPD through a breach-of-fiduciary-duty claim under § 502(a)(3).
The Court interprets CIGNA to require that the plan text ultimately controls the administrator’s obligations in a § 502(a)(1)(B) action, but to not disturb pre-CIGNA case law under which: (1) ambiguous plan language must be given a meaning as close as possible to what is said in the SPD, and (2) SPDs must be interpreted in light of the applicable statutes and regulations . Those regulations require considerably greater clarity than the SPD provides in this case.