United States District Court, D. Connecticut
MEMORANDUM OF DECISION ON PLAINTIFF'S MOTION FOR
JUDGMENT ON THE PLEADINGS
W EGINTON SENIOR UNITED STATES DISTRICT JUDGE
provides health benefits to its employees and their
dependents through a group employee health benefit plan.
Pursuant to the plan, Henkel designated Aetna Life Insurance
Company as the claims administrator for medical benefits and
Express Scripts Inc. as the claims administrator for
prescription drug benefits.
provided stop loss insurance to Henkel for approximately ten
years, through 2017. Pursuant to the stop loss insurance
policy, Henkel agreed to pay monthly premiums to ReliaStar in
exchange for health insurance coverage in excess of
Henkel's deductibles. In other words, ReliaStar provided
protection to Henkel against catastrophic or unpredictable
healthcare benefit costs.
performed an audit of certain prescription drug benefits paid
pursuant to Henkel's health benefit plan and concluded
that the expenses were not covered under the stop loss
policy. Based on these findings, ReliaStar denied
Henkel's claim for reimbursement.
to Zurich North America v. Matrix Service Inc., 2004
WL 5552031, at *4 (N.D. Okla. June 22, 2004), the plan's
administrators in the instant case have construed the terms
of the plan in a manner with which the stop loss insurer,
ReliaStar, does not agree.
Zurich, here, the plan is the controlling document
as to eligibility. If an employee is covered under the terms
of the plan, then the policy kicks in and the respective
payment obligations of Henkel and ReliaStar are governed by
the policy. See id.
has moved for judgment on the pleadings, seeking a
declaration that under the plain language of the stop loss
insurance policy ReliaStar does not have the right to make
underlying benefit determinations, to overrule the
determinations of the fiduciary claims administrators, or to
deny coverage on the basis of its assertion that an
employee's treatment was experimental or investigational.
contends, and the court agrees, that ReliaStar does not have
the right to “veto” the plan administrators'
determinations merely because ReliaStar disagrees with such
determinations. See Computer Aided Design Systems, Inc.
v. Safeco Life Ins. Co., 235 F.Supp.2d 1052, 1059 (S.D.
Iowa 2002) (“[P]roviding an excess loss insurance
company with the unfettered power to control a plan
administrator's decision making process by promising to
withhold payment or by making post hoc coverage decisions
runs afoul of ERISA and public policy, and is most definitely
ReliaStar submits that it should not be obligated to pay for
coverage without question. This is true, but the question is
not whether ReliaStar would have reached the same conclusion
as the plan administrators. In this sense, the contrary
finding of ReliaStar's “audit” is immaterial.
The real question is: To what standard must the plan
administrators be held?
Computer Aided Design Systems, the district court
held that “a claim is a covered expense under the plan
when, absent an abuse of discretion, the Plan Administrator
determines the claim is covered under the plan.” 235
F.Supp.2d at 1059. Here, ReliaStar submits that the plan
administrators abused their discretion, namely because plan
participants' diagnoses had not been confirmed through
sufficient “complement testing” and because
participants' drug therapies were “experimental and
investigational.” ReliaStar argues that Henkel's
motion is premature, as disputed issues of material fact
cannot be resolved on the pleadings. ReliaStar submits that
it is entitled to discovery before the case is resolved.
Henkel counters that ReliaStar seeks voluminous and
unnecessary discovery, where resolution of the case turns
primarily on a matter of law.
summary judgment, the court in Computer Aided Design
Systems found, based on the benefits plan in that case,
that the “plan administrator alone has the authority to
determine whether a procedure is experimental.”
Id. at 1060. The court then looked to abuse of
discretion standards applicable to the typical ERISA case,
where a plan beneficiary challenges the actions of the
Important in this review is that the Court will not
substitute its judgment for that of the administrator. That
is, the Court will not overturn an administrator's
decision simply because the Court disagrees. Rather, the
discretionary standard is whether a reasonable person, given
the evidence presented in the administrative record, could
have reached the same decision, not whether the reasonable
person would have reached a like decision.
Id. at 1061.
court will permit additional discovery into whether the
administrators' decisions in this case were supported by
substantial evidence. See Hobson v. Metropolitan Life
Ins. Co., 574 F.3d 75, 82 (2d Cir. 2009) (Finding that
an administrator's ultimate conclusion shall not be
disturbed unless it is arbitrary and capricious). However,
discovery shall be limited to (1) the ...