In Larson v. United Healthcare Insurance Company, No. 12-1256 (7th Cir. 2013), The plaintiffs in a proposed class action allege that six major health-insurance companies are violating Wisconsin law by requiring copayments for chiropractic care. Since the plaintiffs are insured through employer-based health plans, the complaint seeks relief under two provisions of ERISA: § 502(a)(1)(B), for recovery of benefits due, and § 502(a)(3), for breach of fiduciary duty. The district court dismissed the complaint, holding that insurance companies are not proper defendants on an ERISA claim for benefits and the practice of requiring chiropractic copays is not a fiduciary act.
In analyzing the case, the Seventh Circuit Court of Appeals (the “Court”) said that it affirms the district court’s decision, but on somewhat different reasoning. It explained that many cases say that an ERISA claim to recover benefits due under an employee-benefits plan normally should be brought against the plan. That is the general rule, but nothing in ERISA categorically precludes a benefits claim against an insurance company. Here, the complaint alleges that the insurers decide all claims questions and owe the benefits; on these allegations the insurers are proper defendants on the § 1132(a)(1)(B) claim. However, the Court continued, the complaint fails to state a claim for breach of fiduciary duty. Setting policy terms, including copayment requirements, determines the content of the policy, and decisions about the content of a plan are not themselves fiduciary acts. Thus, the Court concluded that there is no breach of fiduciary duty in this case.