Plan Administration Litigation

By, James Goodfellow and Amanda Sonneborn

Seyfarth Synopsis: The Fifth Circuit adds to the growing body of case law requiring more detailed reviews of claims for life insurance or accidental death and dismemberment benefits following accidents resulting from drunk driving.

In White v. LINA, No. 17-30356, __F.3d__, 2018 WL 2978641 (5th Cir. June 13, 2018), a case involving denial of life insurance benefits provided pursuant to an ERISA governed plan, the Fifth Circuit concluded that LINA abused its discretion in determining that the intoxication exclusion applied.

The facts of the case are straight forward. The insured was driving a car and collided with a truck. Following the crash, two blood samples were drawn from the insured, as well as a urine sample. These samples were tested, and while none tested positive for alcohol, all tested positive for illegal drugs. None of the test results, however, provided the level of drugs in the insured’s system. All of the samples subsequently were destroyed pursuant to the labs’ respective policies, and no further testing was conducted. The police did cite the insured for driving under the influence.

A few days after the crash, the insured died from a stroke. The medical examiner determined that the immediate cause of death was a “massive stroke,” and the underlying causes of death were “multiple trauma (from the car accident),” as well as illegal drug abuse.

The plan at issue, like many ERISA plans, contained exclusions precluding coverage if death is caused, at least in part, by intoxication or by voluntary ingestion of narcotics or drugs without a prescription. Upon receipt of Plaintiff’s claim for benefits, LINA hired a toxicologist to review the claim file to determine the level of impairment. Though the toxicologist concluded that it was impossible to estimate the level of the insured’s impairment, given that no qualitative analysis of the samples taken was complete, he concluded that in the absence of any other cause for the collision, the drugs in the insured’s blood system could explain his level of impairment that resulted in the crash. LINA thus denied the claim.

The district court found in favor of LINA, but the Fifth Circuit reversed, concluding that LINA had failed to provide Plaintiff’s claim a full and fair review because it did not disclose the toxicologist’s report until it filed the administrative record with the court after the lawsuit had been filed. On the merits, the Fifth Circuit acknowledged that the evidence was “close,” given that there was no other possible explanation for the insured’s driving on the night of the accident. Yet, because there was no way to determine the level of intoxication, if any, at the time of the accident, LINA’s structural conflict of interest acted as the tie-breaker.

In reaching this conclusion, the Fifth Circuit joined the other circuits in reading these exclusions to require an insurer to conclude that the insured was intoxicated at the time of the accident, which in turn requires some form of scientific proof. It is not sufficient, for example, for a toxicology report to reveal drugs in an insured’s system. It also may not be it sufficient, depending on the jurisdiction, that a toxicology report reveal alcohol intoxication at some point after the accident.

In sum, not having scientific proof to gird an otherwise logical conclusion could be fatal in defending the decision to apply the exclusion in court.

By: Chris Busey, Tom Horan and Sam Schwartz-Fenwick

Seyfarth Synopsis: The Fourth Circuit found in favor of an insurer on a claim for life insurance benefits, finding the insured’s failure to submit the required evidence of insurability was not excused by his employer having wrongly deducted premiums for that coverage from his pay.

In Gordon v. CIGNA Corp., Plaintiff sought to represent a putative class of participants and beneficiaries who were deemed ineligible for additional life insurance benefits despite having paid premiums for the for the additional coverage, because they failed to submit the requisite evidence of insurability (“EOI”).

Plaintiff, as her deceased husband’s beneficiary, made a claim for supplemental life insurance benefits from the insurer and claims administrator, Life Insurance of North America (“LINA”). LINA denied the claim because the decedent never submitted the EOI required for supplemental coverage. Plaintiff claimed the employer and insurer breached their fiduciary duties by failing to notify the insured of the EOI requirement while continuing to accept premiums for that coverage. Plaintiff also alleged that, if any defendant was not a fiduciary under the plan, it was liable for knowingly participating in a breach of trust.

The district court granted LINA’s motion for summary judgment on the bases that LINA was not acting as a fiduciary with respect to enrollment for coverage, and there was no evidence it had knowledge of the employer’s collection of a premium for the additional coverage. The court also rejected Plaintiff’s argument that the motion was premature because she had not conducted discovery. On appeal, the Fourth Circuit affirmed the district court’s opinion in full.

First, the court found the employer, and not LINA, was tasked with day-to-day administration of the plan, including billing and screening applications. Given this allocation of duties, LINA was not responsible for notifying the decedent of the EOI requirement, and therefore could not be liable for a breach of that duty.

Second, the court found that, even if breach of trust was a cause of action, Plaintiff’s claim would still fail. The record lacked evidence that LINA had any knowledge of the employer’s acceptance of premiums on behalf of the decedent for coverage above the guaranteed amount. To the contrary, the evidence showed that the employer remitted premiums to LINA as a lump-sum and did not provide employee names or associated coverage amounts.

Finally, the court rejected the argument that discovery was required before ruling on the motion. It noted Plaintiff had a reasonable opportunity to conduct discovery, also further found that the information sought would not have created a genuine issue of material fact given the clear allocation of fiduciary duties in the plan documents and, especially, the employer’s concession that it erred in collecting premiums and failing to obtain EOI.

This case is positive for insurers and claims administrators, and stands in stark contrast to the Ninth Circuit’s recent opinion in Salyers v. MetLife, 871 F.3d 934 (9th Cir. 2017) (finding employer acted as insurer’s agent in collecting premiums, thereby imputing knowledge of premium collection to insurer). The finding that LINA did not owe a fiduciary duty to the decedent with respect to enrollment, as the plan did not vest it with that duty, will help insurers defend against similar cases where premiums paid to the employer exceed the actual level of coverage.

By, Jim Goodfellow and Sam Schwartz-Fenwick

Seyfarth Synopsis: In a win for ERISA plan and claims administrators, the Third Circuit has affirmed the broad enforcement of a long-term disability plan’s mental or nervous limitation period.

In Krash v. Reliance Standard Life Insurance Group, No. 17-1814, the Third Circuit affirmed the judgment of the Middle District of Pennsylvania, which had concluded that the plaintiff’s disability was limited to the plan’s 24 month period for mental/nervous conditions.

The plan at issue limited benefits “caused by or contributed to by mental or nervous disorders” to 24 months. The plaintiff stopped working in May 2010 due to physical complaints (back pain and tremors). Reliance Standard, the plan’s insurer and claims administrator, paid benefits for four years, and then requested that the plaintiff submit to an in-person independent medical examination. The examining physician concluded that the plaintiff’s tremors were psychological, not physical, in nature. The plaintiff’s medical records also showed that she suffered from depression and anxiety. Accordingly, Reliance Standard terminated the claim, asserting that it was subject to the 24 month limitation for mental/nervous disorders.

The Middle District of Pennsylvania sided with Reliance Standard, and the Third Circuit affirmed. The Third Circuit stated that the plan’s language made clear that to remain eligible for benefits beyond 24 months, it was the plaintiff’s burden to “prove she was totally disabled from any occupation solely due to a physical condition.” The Third Circuit further explained that the terms of the mental nervous limitation in the plan (“’caused or contributed to by’ in a mental disorders limitations clause”) means “that benefits may be terminated when physical disability alone is insufficient to render a claimant totally disabled.” Accordingly, because the record reflected that the plaintiff was capable of performing sedentary work even with her physical condition, the Court found that Reliance Standard did not abuse its discretion in concluding that the mental/nervous limitation applied.

While this is a good win for ERISA plans in the Third Circuit (New Jersey, Delaware, and Pennsylvania), plan and claims administrators should continue to tread carefully, as courts in other circuits take a more plaintiff-friendly view of this type of limitation. Also, this decision turned on the language in the at-issue plan. It is important to review plan documents with counsel to see if their mental and nervous limitations are similarly broad.

By Ronald Kramer and Michael W. Stevens

Seyfarth Synopsis: Claims for benefits at termination may proceed as a breach of contract claim in state court, and avoid ERISA preemption, where the calculations are individualized, straightforward and do not implicate an ongoing administrative scheme.

Under a recent decision from the Central District of California, employers may not be able to invoke ERISA preemption and remove cases to federal courts where the benefits claims at issue are not “complex” and do not implicate administrative discretion.

In Amlani v. Baker’s Burgers, Inc., No. 17-02278, 2018 WL 354617 (C.D. Cal.), Plaintiff brought a breach of contract claim after his employment agreement was terminated by the Defendant. Plaintiff had worked with Defendant for almost 29 years, the first 18 of which were covered by a “handshake” agreement based on a percentage of sales. Id. at *1. In 2006, the parties entered into a written Employee Benefits Agreement, which specified certain benefits to be paid to the Plaintiff. In 2008, they subsequently entered a new Employment Agreement, which in relevant part, allegedly entitled Plaintiff to a longevity payment of “1.68 times [his] base salary and fringe benefits” after the vesting period. Id. at 2.

Defendant terminated Plaintiff, and Plaintiff brought a breach of contract suit in state court claiming he was entitled to certain severance benefits, as well as the longevity payment. Id. Defendant removed to federal court, asserting that Plaintiff’s claims were preempted by ERISA § 502(a)(1)(B). Id.

The Court proceeded to examine whether Plaintiff’s claims fell within the preemption analysis established by Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), which permits preemption where a claim could have been brought under §  502(a)(1)(B), and implicates no other legal duty.

The Court focused on the first half the inquiry: whether Plaintiff’s claims could have been brought under ERISA. To do so, the Court examined whether the agreement constituted a benefit plan covered by ERISA: “does the benefit package implicate an ongoing administrative scheme?” Id. at *3 (citing Delaye v. Agripac, Inc., 39 F.3d 235, 237 (9th Cir. 1994)).

Here, like in Delaye, the Court found no ongoing administrative scheme. The benefits did not apply to a larger group of employees and were relatively straightforward. The longevity severance payment involved a “one-time, individualized calculation,” id., to wit: multiplying the value of Plaintiff’s salary and benefits by 1.68. Nor did the other severance benefits at issue, which required ongoing payments, rise to an ongoing administrative scheme, because there was no “issue of employer discretion, but rather one of contract interpretation.” Id. at *4. The Court thus found no preemption, and remanded to state court.

Amlani reminds employers that where benefits packages are highly individualized, and do not implicate administrative schemes or discretion, claims by employees for breach may remain in state court.

 

By: Chris Busey and Ron Kramer

Even when a claims administrator approves a claim for disability benefits, its job is not done. That principle was again demonstrated in the recent case Owings v. United of Omaha Life Insurance Co., No. 16-3128 (10th Cir. Oct. 17, 2017). The plaintiff’s claim for long-term disability benefits had been approved, but he claimed that the benefits paid were based on the wrong salary.

The plaintiff injured his back at work on July 1, 2013. Later that same day, the plaintiff was demoted from manager to supervisor with a corresponding reduction in his salary. The plaintiff returned home that day and claimed that he did not return to work the following day due to his back pain. The claims administrator approved and paid long-term disability due to plaintiff’s back injury, but based the amount on his reduced salary. It relied on the employer’s human resources representative, who said that plaintiff worked on July 2, making his date of disability at July 3. Plaintiff filed a claim seeking increased benefits based on his prior claim and appealed the denial. The defendant again relied on the employer’s human resources department in determining that the plaintiff worked on July 2, thus making his pay at the time of his disability the lower amount. After plaintiff filed suit in Kansas state court, the case was removed to the U.S. District Court for the District of Kansas. That court ruled in the defendant’s favoring, determining that it did not abuse its discretion in denying plaintiff’s claim.

On appeal, the Tenth Circuit overturned that decision, determining that the insurer abused its discretion in several ways. First, it held that the defendant’s interpretation of “disabled” under the plan was unreasonable. The defendant had determined that plaintiff’s disability did not begin until July 3 because he continued to perform at least one job duty on July 2. The plan, however, defined disability as being unable to perform “at least one of the Material Duties of Your Regular Occupation.” The defendant’s interpretation was thus inconsistent with plan’s terms. The Court also rejected the defendant’s argument that plaintiff was disabled, at the earliest, on July 2 because he worked at least part of July 1. The Court noted that the plan did not support the defendant’s interpretation that the date of disability must be difference than a claimant’s last day worked. This interpretation was unreasonable in light of the plan’s plain language. Finally, the Court found it unreasonable for the defendant to rely solely on the assertions of the employer’s human resources director in determining that last day worked. The defendant was focused solely on whether plaintiff worked on a specific day, and not on when plaintiff’s injury sustained on July 1 prevented him from performing one or more of the duties of his position. The Court remanded the case to the lower court with instructions to enter judgment for the plaintiff.

This case presents a few key takeaways. As always, the plan terms and, in particular, the plan’s definition of disability, must always be at the forefront of any benefits decision. The more unexpected result is the Court’s finding that a claimant’s last day worked and date of disability may be the same. This defies the typical interpretation many administrators use where the date of disability follows the last day worked. While the Court relied on the specific plan language at issue in making that determination it is noteworthy for claims administrators going forward. Further, the Court found it was unreasonable for the administrator to rely on the employer’s assertions alone. This case thus serves as a reminder to conduct an independent investigation.

 

By Jonathan A. Braunstein and Michael W. Stevens

Seyfarth Synopsis: The Ninth Circuit Court of Appeals recently confirmed that ERISA preempts state insurance law bans on discretionary clauses  for self-funded ERISA plans.

The Ninth Circuit has weighed into the national debate over discretionary clauses in ERISA plans, holding that ERISA preempts a state-law ban on discretionary clauses for self-funded disability plans, but not for fully-insured plans. Williby v. Aetna Life Ins. Co., No. 15-56394, Aug. 15, 2019 (9th Cir.).

In Williby, an employee of The Boeing Company sought disability benefits.  Boeing provided its employees with a self-funded short-term disability program, administered by Aetna.  The plan included a so-called discretionary clause, providing Aetna with “full discretionary authority to determine all questions that may arise,” including determination of benefits eligibility and scope.  Discretionary clauses effectively make an administrator’s determinations subject to a higher standard of review (abuse of discretion), rather than a de novo review.

The employee sought short-term disability benefits, which Aetna granted in part but denied in part. The employee then sued, accusing Aetna of wrongful denial.  The trial court reviewed Aetna’s determination de novo, finding in part that Cal. Ins. Code § 10110.6 — a ban on discretionary clauses in life or disability insurance — prohibited application of a more stringent standard of review. The trial court then held that plaintiff was entitled to more benefits than what Aetna had originally granted. Aetna appealed.

The Ninth Circuit reversed and remanded. The Court ruled that ERISA preempted § 10110.6, as applied to the self-funded plan at issue. The Ninth Circuit focused its analysis on the difference between a fully-insured and a self-funded benefit plan.  The Court held that there “is a simple, bright-line rule: if a plan is insured, a State may regulate it indirectly through regulation of its insurer and its insurer’s insurance contracts; if the plan is uninsured, the State may not regulate it. . . . Thus, for a self-funded disability plan like Boeing’s, the saving clause does not apply, and state insurance regulations operating on such a self-funded plan are preempted.”

The Court then held that, because § 10110.6 was preempted, Aetna’s decisions were entitled to an abuse of discretion standard, and remanded for further proceedings.

Thus, while the national battle over the force of state discretionary clause bans continues to be fought, self-funded plans in the Ninth Circuit can point to Williby as setting a clear and bright line limit on the interplay of state insurance regulations and ERISA. In the coming years,   we expect to see many more cases presenting ERISA preemption issues in the near future, as it remains a very hot-button and heavily litigated issue.  Stay tuned to this blog for further updates.

 

 

By: Ian Morrison and Tom Horan

Seyfarth Synopsis: In a strong decision for insurers, the Eighth Circuit affirmed summary judgment for the administrator, rejected plaintiff’s conflict of interest argument, and found that it was not arbitrary for the administrator to require objective evidence of impairment when processing an LTD claim.

Cooper v. Metropolitan Life Insurance Company, No 16-3429, 2017 WL 2853729 (8th Cir. July 5, 2017), is a fairly typical ERISA long-term disability case, but has unusually strong pro-insurer holdings. On appeal from a summary judgment win for MetLife, the Eight Circuit conclusively rejected the plaintiff’s claim that the insurer’s dual role as decisionmaker and payor of benefits warranted a closer review of its decision.

In support of the LTD claim at issue, plaintiff submitted documentation from both her treating physician and her chiropractor. MetLife found no clinical findings to support disability. Plaintiff did not formally appeal, but continued to correspond with MetLife and supplied additional notes from her treating physician. MetLife referred those records, as well as the records from previous STD and LTD claims, to an independent physician for review. The reviewing physician found no objective clinical support for the conclusion that plaintiff was disabled as defined in the plan.

On appeal, the plaintiff argued that the district court erred in applying the abuse of discretion standard and refusing to consider affidavits from her treating physician and chiropractor that were outside the administrative record. The court rejected plaintiff’s argument that MetLife’s dual role warranted more searching review. The court noted that plaintiff’s generic claim of conflict was devoid of evidence of biased decision making. Instead, the court found that the record evinced a comprehensive review, including reliance on the opinion of a qualified independent expert, and did not require a “less deferential” review under the U.S. Supreme Court’s decision in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008).

The Eighth Circuit also found it permissible for the insurer to rely on the opinion of its retained physician instead of the competing views of a treating physician, especially where the plaintiff was given repeated notice of the type of evidence missing from her physician’s submissions. In reaching its conclusion, the court rejected the oft-heard argument that it was arbitrary to insist upon objective evidence of impairment. The court stated that that MetLife was entitled to favor the reviewing physician’s opinion over that of plaintiff’s treating physician—particularly where the treating physician was not tasked with interpreting “disability” as defined in the plan—so long as the reviewing physician’s conclusion was a reasonable one to draw from the record. Finally, the court rejected plaintiff’s argument that MetLife violated the ERISA claims regulations by having a nurse with unspecified credentials interpret certain lab tests, reasoning that MetLife was in substantial compliance with the claim regulations and that there was no evidence that having a different professional review the tests would have changed the outcome.

Cooper will become a go to case for insurers and other benefit plan administrators to cite in their summary judgment briefs, at least as to its “objective evidence” and conflict holdings.  The court’s “substantial compliance” holding, however, may not survive the implementation of the revised DOL claim regulations.

 

By: Sam Schwartz-Fenwick and Chris Busey

Seyfarth Synopsis: The Eighth Circuit upheld dismissal of Title VII claims challenging an employee benefit plan’s blanket transgender exclusion because the exclusion impacted the  employee’s transgender son, not the employee. The Eight Circuit overturned the dismissal of the employee’s claim against the plan’s third-party administrator under the Affordable Care Act, finding the complaint sufficiently alleged an actionable claim against the TPA.

The Eighth Circuit granted a potentially short-lived reprieve to a plaintiff challenging a blanket exclusion for transgender services contained in her employer’s health plan. The case, Tovar v. Essentia Health, et al, No. 16-3186 (8th Cir. May 24, 2017), allowed part of the plaintiff’s claim alleging a violation under Section 1557 of the ACA to proceed by remanding it to the district court.

The Section 1557 regulations at issue in Tovar are currently subject to a nationwide injunction issued in the Northern District of Texas. The Department of Health and Human Services is party in that suit, and has indicated that it may seek to repeal that regulation through the typical notice and comment rulemaking procedures. The Circuit Court did not address the precarious nature of Section 1557 in its decision.

Rather, the Eighth Circuit restricted its analysis to the decision of the district court. The District Court dismissed Tovar’s claims under Title VII, the Minnesota Human Rights Act, and Section 1557, as we covered here.

The Eighth Circuit first upheld the dismissal of Tovar’s Title VII and MHRA claims. It agreed that Tovar was not within the class of individuals protected by those statutes because she did not allege discrimination based on her own sex, but that of her transgender son.

The Court went on to overturn the dismissal of the ACA claim against the TPA. The District Court had dismissed her ACA claims for lack of Article III standing because Tovar named the wrong entity and because only the employer (not the TPA) had the ability to modify plan terms (such as the transgender exclusion). The Eighth Circuit found the plan documents did not definitively establish that the named defendant had no involvement in the administration of the plan. The Eighth Circuit further found that Plaintiff alleged sufficient facts showing that the “allegedly discriminatory terms originated” with the TPA. And thus this issue was remanded to the district court.

The Eighth Circuit specifically declined to address the argument that an administrator could not be liable for administering a plan where plan design is under the sole control of another organization. The dissent forcefully addressed this question, noting that an Office of Civil Rights interpretation of Section 1557 provides that “third party administrators are generally not responsible for the benefit design of the self-insured plans they administer and ERISA . . . requires plans to be administered consistent with their terms.”

By: Sam Schwartz-Fenwick and Jules Levenson

Seyfarth Synopsis: In a decision with wide ranging implications, the Ninth Circuit has ruled that a discretionary clause in an employer drafted plan document is subject to, and invalidated by, California’s insurance regulation banning discretionary clauses in insured plans.

In recent years a number of states have passed insurance regulations barring discretionary clauses in disability insurance policies in order to make it easier for participants to prevail on ERISA claims. A question that has dogged these regulations is the extent to which they are preempted by ERISA.  One particularly strong argument raised by employers is that even if a state insurance regulation can control an insurer-drafted plan document, basic principles of ERISA preemption preclude state law from invalidating any provision in an employer plan document.

The Ninth Circuit has now weighed in on this issue and in a victory for plaintiff, the Court of Appeals held that a state discretionary ban is not preempted by ERISA and properly extends to employer-drafted plans as long as the plan provides for insured benefits. Orzechowski v. Boeing Co. Non-Union Long Term Disab. Plan, No. 14-55919, ‑‑ F.3d –, 2017 WL 1947883 (9th Cir. May 11, 2017).

Orzechowski involved a denial of disability benefits. Defendant argued that the claim was subject to the highly deferential abuse of discretion review, as the employer drafted plan conferred discretion on the insurer (claim administrator) to decide claim.  The district court agreed. The district court further found that because the plan was in effect prior to the enactment of California’s discretionary clause ban, it was not covered by the ban.

The Court of Appeals reversed. The Court found the plan subject to the ban, because although the plan was in effect prior to the ban’s enactment, Plaintiff claimed benefits under an insurance policy that renewed (as defined by the statute) after the statute’s effective date.  Examining whether the plan was preempted by ERISA, the Court found that even though Boeing is not an insurance company, the law was directed to the insurance industry and, because the benefit at issuewas an insured benefit, all plan documents covering this benefit were subject to California state insurance regulations (including the discretionary ban).  Accordingly, the Court found the law valid as a regulation of insurance.  It thus remanded the claim for consideration under the de novo standard.

This case will likely have significant repercussions for plans in the context of benefits decisions, both in California and nationally. Absent reversal by an en banc panel of the Supreme Court, Not only will a significant number of decisions now be subject to de novo review in states in the Ninth Circuit, states considering banning discretionary clauses may be emboldened or spurred to action by this decision.  With fewer decisions afforded deference, a concomitant rise in litigation challenging benefits decisions is likely to follow.  Only time will reveal the exact extent of the impact.  Stay tuned.

 

By, Sam Schwartz-Fenwick and Jim Goodfellow

Seyfarth Synopsis: In an opinion that may result in increasingly complex ERISA benefits litigation, the Eighth Circuit has allowed a breach of fiduciary duty claim premised on alleged faulty claims handling practices to proceed in conjunction with a claim for benefits.

In a case that should catch the attention of ERISA plan administrators, the Eighth Circuit in Jones v. Aetna Life Insurance Company, et al held that a breach of fiduciary duty claim premised on improper claims handling could survive a motion to dismiss, even where the plaintiff also brought a claim for benefits seeking the same unpaid benefits.

In Jones, Plaintiff brought two claims against insurer Aetna: 1) a claim for benefits premised on Aetna’s termination of Plaintiff’s disability benefit; and 2) a breach of fiduciary duty claim premised on Aetna’s claims handling practices. The district court dismissed the breach of fiduciary duty claim as duplicative of the claim for benefits, citing the Supreme Court’s decision in Varity Corp. v Howe, 516 U.S. 489 (1996), which instructed that section 502(a)(3) breach of fiduciary duty claims function as a “safety net, offering appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy.”  On summary judgment, the court held that Aetna did not abuse its discretion in denying the claim for benefits.

On appeal, the Eighth Circuit affirmed the denial of benefits. But, the Eighth Circuit reversed the dismissal of the breach of fiduciary duty claim. The court found it was consistent with Varity Corp to allow a fiduciary breach claim to proceed in tandem with a claim for benefits so long as both claims set forth a different theory of relief. The court found that Plaintiff had made this showing, as “[e]ven if an administrator made a decision with procedural irregularities that seriously breach its duties to its beneficiary, it is not necessarily liable under (a)(1)(B); instead, the serious breach prompts a more searching review of the denial of benefits claim.” The Eighth Circuit remanded the breach of fiduciary duty claim for further proceedings.

This decision stands in sharp contrast to the Sixth Circuit’s en banc decision in Rochow v. Life Insurance Company of North America, 780 F.3d 364 (6th Cir. 2015), and with Varity Corp. and its progeny. In Rochow, the Sixth Circuit held that because the plaintiff could be made whole by the remedies available under section 502(a)(1)(B) and section 502(g) through payment of benefits, interest, and attorney’s fees, the plaintiff could not recover under section 502(a)(3). Given how out of step Jones is with longstanding practice, it is likely that Aetna will seek en banc review, or even file a petition of certiorari with the Supreme Court. Nevertheless, while this case continues to work its way through the courts, it is likely that plaintiffs will rely on Jones in justifying pairing routine claims for benefits with claims for equitable relief.

An upsurge in such litigation, while in the short-run potentially advantageous to participants who will be able to obtain extra-contractual equitable remedies (such as sur-charge and disgorgement), risks in the long run causing insurers to greatly raise premiums to address high litigation costs. This in turn risks chilling the willingness of employers to offer ERISA disability benefits to their employees. Stay tuned for how this case plays out, either on further appeal or in future cases.