Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
THE IMPACT OF AMARA: (A)(3) RELIEF
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
Cigna changed its retirement plan from
a defined benefit based on salary and
length of service to a cash balance plan
Participants sued, claiming insufficient
notice of Plan changes and that new
plan was less generous
Holding: participants have no claim for
relief under (a)(1)(B), which does not
give Court authority to change the
terms of the plan; SPD not a Plan
document
However, (a)(3) provides those forms of
relief available in equity, including
reformation of contracts as a remedy for
false or misleading information;
claimant must show “actual harm”
although not necessarily detrimental
reliance (except still required for
estoppel)
CIGNA CORP V AMARA, 131 S.CT. 1866 (2011)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
Skinner v. Northrup Grumman
Retirement Plan B, 673 F.3d 1162
(9th Cir. 2012) – retirement plan case
-Claimant
alleged Plan terms differed
from SPD
-Held,
SPD not a Plan document –
Circuit had previously held SPD
language “enforceable part of plan”
-Claims
available under (a)(3):
estoppel, reformation, or surcharge
- no reliance on SPD terms = no
estoppel
-No fraud/mistake = no reformation
-No showing that Plan benefitted from
alleged breach = no surcharge
CASES INTERPRETING AMARA – RETIREMENT PLANS
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-Employer switched from a defined
benefit plan to a cash balance plan
-Claimants alleged insufficient notice
period prior to changeover
- Held: Amara requires only showing
of “actual harm”, not necessarily
detrimental reliance: “The Supreme
Court recently altered the required
showing of prejudice for some ERISA
claims, but even under this new,
more lenient standard, ‘actual harm
must be shown.’”
-Claimants failed to demonstrate
“actual harm” as a result of late
notice
TOMLINSON V. EL PASO CORP., 653 F.3D 1281 (10TH CIR. 2011)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
U.S. Airways, Inc. v. McCutchen, 663
F.3d 671 (3d Cir.2011)
-Plan participant injured in auto
accident
- Plan paid $67,000 in medical
expenses
- Participant recovers $110,000 from
third parties (incl. legal fees)
-- Plan sues participant for
reimbursement of medical expenses
as (a)(3) equitable relief; participant
claimed no allowance for attorney’s
fees incurred
-Held: Amara holds that equitable
relief = relief “typically available in
equity,” which means such relief is
subject to equitable defenses
-Cert
granted June 2012
CASES INTERPRETING AMARA - REIMBURSEMENT
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
- Health insurance plan included
subrogation/reimbursement
provisions
-Employee injured in auto accident
- Plan paid $32,000 in medicals
-Employee obtained 3d party recovery
paid in trust to attorney
-Plan sued employee and attorney
seeking reimbursement
--Held, attorney not a proper party
Under (a)(3) because did not
participate in an “unlawful
transaction”
--Held, under Amara the application
of “traditional equitable relief”
includes traditional equitable
defenses, such as “make whole” and
“common fund” doctrines
-Under Amara the court “need not
honor the express terms of the Plan
where traditional notions of equitable
relief so require. “
CGI TECH & SOLUTIONS, INC V. ROSE, 683 F.3D 1113 (9TH CIR. 2012)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-Claimant
received benefits under a
LTD plan
-Later also received Social Security
payments, creating an overpayment
of benefits
- Claim review fiduciary sued for
reimbursement of overpaid benefits
under (a)(3), citing “other appropriate
equitable relief” provision
-Held, an equitable lien requires (1) a
promise to reimburse out of a third
party recovery, (2) a specific fund
separate from the claimant’s general
assets, and (3) funds must be within
claimant’s possession and control
- Amara cited for proposition that
equitable lien requires “particular
funds or property in the defendant’s
possession”
BILYEU V. MORGAN STANLEY LTD PLAN, 683 F.3D 1083 (9TH CIR. 2012)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
Sullivan v. CUNA Mutual Ins. Society,
649 F.3d 553 (7th Cir.2011)
-Employer paid a portion of retiree
healthcare premiums; allowed
retirees to use unused sick leave
credits to pay the rest
- Employer discontinued its
contribution and cancelled credits
program
- Retirees sued, alleging Plan diverted
“assets” to itself (balance sheet gain
$120 million)
-Held, sick leave balances are not a
Plan “asset”
-Held, health care benefits not vested
-Amara cited for proposition that
“silence in a summary plan
description about some feature of a
pension plan does not override
language in the plan itself”
CASES INTERPRETING AMARA – HEALTHCARE PLANS
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-Action challenging denial of
residential treatment under a
healthcare plan
-Claimant challenged appropriate
standard of review; grant of
discretion contained in SPD; no other
plan document in evidence
- Court cited Amara for two “fairly
simple propositions:
“(1) the terms of the SPD are not
enforceable when they conflict with
governing plan documents, or (2) the
SPD cannot create terms that are not
also authorized by, or reflected in,
governing plan documents.”
Held, Amara inapplicable where the
SPD IS the Plan
EUGENE S. V. HORIZON BLUE CROSS BLUE SHIELD, 663 F.3D 1124 (10TH CIR. 2011)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-Employer provided HMO plan
Employee sought reimbursement for
treatment by out of network physician
-Aetna denied claim based on Plan
provision requiring pre-authorization
-Court found pre-authorization
provision in SPD to be ambiguous
-Amara cited for proposition that
(a)(1)B) claims may be based only on
Plan terms, not terms of SPD, but “a
beneficiary may still seek to hold the
administrator to conflicting terms in
the plan summary through a breachof-fiduciary-duty claim under §
1132(a)(3). “
KOEHLER V AETNA HEALTH, INC., 683 F.3D 182 (5TH CIR. 2012)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-MetLife provided AD&D coverage and
administered plan
-Coverage provided to “eligible
dependent children” i.e. < 19 or < 24 if
full time student
-Claimant paid premiums to cover her
daughter, who was murdered in 2007 at
the age of 25
- Met denied claim, refunded premiums
- Claimant refused refund, sued for
coverage “surcharge” or “estoppel”
-- Dist. Ct. remedy = return of premium
- Held, under Amara the claimant may
seek “surcharge” in the form of the Plan
benefits as a remedy under (a)(3) for
breach of fiduciary duty;
-claimant may also state a claim for
equitable estoppel, i.e. allowing
claimant to retroactively convert
dependent coverage into individual
coverage
-Court’s concern: “risk-free windfall
profits”
MCCRAVY V. METROPOLITAN LIFE INS. CO., 2012 U.S. APP. LEXIS 13683 (4TH CIR.
JULY 5, 2012)
Green & Humbert 220 Montgomery St.
1418 San Francisco CA (415) 837-5433
CASES INTERPRETING AMARA - LTD
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-LTD claim based on fibromyalgia
- Claim administrator limits benefits to 2
years based on “self reported
symptoms” limitation
-7th Circuit holds that limitation applies
to diagnoses based on self-reports,
rather than conditions where the extent
of impairment is self-reported
- Amara cited for proposition that failure
to mention plan limitation in SPD is not
a basis for equitable relief:
“This conclusion obviates our need to
address the issue on which we rested
our initial opinion, that Unum's failure to
include the self-reported symptoms
limitation in the SPD warranted granting
Weitzenkamp equitable relief. We
acknowledge, without deciding, that
CIGNA Corp. v. Amara, U.S. , , 131
S. Ct. 1866, 1877, 179 L. Ed. 2d 843
(2011), may undermine that result . . .”
WEITZENKAMP V. UNUM LIFE INS. CO., 661 F.3D 323 (7TH CIR. 2011)
Green & Humbert 220 Montgomery St. 1418 San
Francisco CA (415) 837-5433
-FIRST CIRCUIT
-SECOND CIRCUIT
-EIGHTH CIRCUIT
-D.C. CIRCUIT
NO PUBLISHED CIRCUIT COURT OPINIONS INTERPRETING AMARA