Strickland became disabled and retired in 1998, but he remained eligible for group health benefits under an ERISA plan. Strickland then applied for social security benefits.
The Social Security Administration apparently told Strickland that the plan would continue as his primary health benefits payor, that Medicare would be the secondary payor, and that Medicare Part B coverage was therefore unnecessary. Strickland alleged that the plan administrator told him the same thing. As result, Strickland purchased only Medicare Part A coverage.
In 2006, Strickland underwent knee and shoulder surgery. The plan administrator first denied Strickland’s claims for benefits because it believed the claims would be covered by workers’ compensation. When that proved to be untrue, the administrator paid the claims as the presumed primary payor.
However, under the terms of the plan, Strickland was required to enroll in Medicare Part B as soon as he became eligible for it. Strickland had not done so, and once the plan administrator identified the deficiency it recovered the payments previously made to the medical providers. Those medical providers then sent bills to Strickland and demanded payment. After the denial of benefits was upheld on administrative review of the claims, Strickland filed suit.
The parties filed cross-motions for summary judgment, both of which the court denied.
First, the court denied the plan’s motion, holding that Strickland was entitled to seek equitable relief, even if he had a remedy under another provision of ERISA. The court stated that “[i]n light of the Supreme Court’s decision in Amara … and the Fourth Circuit’s interpretation in McCravy, …. equitable relief is now available.”
In addition, the court held that Strickland was not required to raise his breach of fiduciary claim during the administrative proceedings. The court specifically noted that surcharge or “make-whole relief” was appropriate equitable relief, and therefore Strickland was not precluded from recovery based on the written terms of the plan.
However, the court found genuine issues of material fact that precluded the grant of Strickland’s motion for summary judgment. Strickland alleged that the plan administrator told him he did not need Medicare Part B coverage, yet transcripts of two telephone conversations showed that Strickland referred only to representations by the Social Security Administration.
Similarly, there was a dispute over whether the administrator confirmed Strickland’s coverage. There was also an unresolved issue of whether the administrator’s original payment of the claims affected the reasonableness of Strickland’s reliance on the alleged misrepresentations. Strickland’s suit could go forward but would not be decided at the summary judgment stage.
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