F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

G A R Y K I N G , as personal representative of L inda King

,

Plaintiff-Appellant

,

v

.

B L U E C R O S S A N D B L U E S H I E L D O F I L L I N O I S ; U N I T E D P A R

C E L S E R V I C E
O F A M E R

I C A , I N C .; UPS H E A L T H
A N D W E L F A R

E P L A N F O R R E T I R

E D E M P L O Y E E S ; D O E S , 1 throug h 10,

Defendants-Appellees. N o. 15-55880

D.C. No. 3:13-cv-01254- CAB

- J MA

OPI NI ON

A ppeal from the United States District Court for the Southern District of California Cathy Ann B enciveng o, District J u dg e, Presiding

Arg ued and Submitted March 9, 2017 Pasadena, California

F iled September 8, 2017

B efore: Richard A. Paez , Marsha S. B erz on, and Morg an Christen, Circuit J udg es.

Opinion by J udg e ChristenK I N G V

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U E C R O S S A N D B L U E S H I E L D 2

SUMMARY *

Em ployee Retirem ent Incom e Security Act

The pan e l reversed the district court’s g rant of summary judg ment in favor of the d e f e n d ants in an ERI SA action
reg arding the denial of a welfare benefit p lan pa rticipant’s claim for medical benefits on the basis of the plan’s lifetime benefit max imum.

T he p anel held that E RI SA, as amended by the P a t i e n t Protection and Affordable Care Act, doe s n o t ban lifetime benefit max imums for certain retiree-only plans.

The panel held that the defendants violated E RI SA’s statutory and r eg ulatory disclosure requirements by providing

a f aulty summary of material modifications describin g chang es to the lifetime benefi t max imum. The panel concluded that the summary did n ot reasonably a p p r i se the
averag e plan participant that the lifetime b e nefit max imum continued to apply

to the retiree plan.

The p anel a lso held that g enuine disputes of material fact precluded summary judg ment on claims of breach o f fiduciary duty in the failure to comply with E RI SA’s d i s closure r equirements. The panel held that a d efen d a n t claims administrator was a fiduciary because it had authority

* T h is su m m ary co n stitu

tes n o p art o f th e o pin io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.K I N G V

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U E C R O S S A N D B L U E S H I E L D 3

to g rant, deny

, and review benefits cl a i m s , and there was a g enuine dispute of material fact about whether this defendant misled the ERI SA plan participant.

The panel remanded the case to the district court.

COUNSEL

Patrick A. Calhoon (argued) and Craig A. Miller, L aw O ffices of Craig A. Miller, San Dieg o, California, f o r Plaintiff-Appellant.

Eileen R. Ridley (arg

ued) and Al a n R

. Ouellette, F oley & L ardner L L P San F rancisco

, California, for D efendantAppellee B lue Cross and B lue Shield of I llinois.

J ohn Ti m o t h y McDonald ( arg ued) a nd Sedric D. B ailey

, Thompson Hine L L P, Atlanta, Georg ia, for DefendantsAppellees United Parcel Service of America, I n c

. , and UPS Health and W elfare Plan for Retired Employ ees.K I N G V

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U E C R O S S A N D B L U E S H I E L D 4

OP INION

CHRI STEN, Circuit J udg e:

L inda King participated in a welfare benefit plan that the defendants sponsored and administered. I n November 2012, Mrs. King suffered a back infection that required immediate
surg ery and ex tensive post-surg e ry rehabilitative care. After initially approving her treatment as medically necessary , the defendants denied her claim for benefits because M r s

. King

ex c e eded her plan’s $500,000 lifetime benefit max imum.

Mrs. K i ng filed suit ag ainst the d efendants—B lue Cross and B lue Shield of I llinois, United Parcel Service of America, I nc. ( UPS), the UPS He a l t h a n d W elfare Plan f or Retired Employ ees, and Does 1 throug h 10—under the Employ ment Retirement I ncome Security Act of 1974 (E R I S A )

. She
soug h t declaratory relief and alleg ed breach of cont r a ct a nd breach of fiduciary duties. Mrs. King passed away while her suit was pending before the district co u rt and Mr. King was substituted as the representative o f her estate. I n response to the defendants ’ m o tions for summary judg ment, Mr. King
arg ued that the defendants f a iled to adequately disclose that the lifetime b enefit max imum a p p lied to the p lan. The district court g ranted summary ju d gm e n t to the d e fendants, and Mr. King appeals.

W e hold: (1) that ERI SA, as amended by the Affordable Care Act, does not ban lifetime benefit max imums for c ertain retiree-only plans; (2) that the defendants violated E RI SA’s statutory and reg ulatory disclosure requirements by providing

a faulty sum m a r y of material modifications describing chang es to the lifetime benefit max imum in September 2010; and (3) t h a t g enuine disputes of material fact precludeK I N G V

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U E C R O S S A N D B L U E S H I E L D 5

summary judg ment on the breach of fiducia r y d u ty claims. According ly

, w e reverse the district c o urt’s order g ranting
summary judg ment.

BACK G ROUND

I. The UP S Health and We l f are P ackage f

o r Retired Em ployees

UP S administers two employ ee welfare benefit plans
g overned by ERI SA: ( 1 ) the UPS Health and W elfare Packag e for active employ ees (the Employ ee P lan); a nd (2) the UPS Health a

nd W elfare Packag e for Reti r ed Employ ees (the Retiree Plan). UPS is the Plan Administrator

a n d Plan Sponsor. B lue Cross is a claims a dministrato r f o r medical coverag e under the plans.

Mrs. King became a participant in the self-funded Retiree Plan as a covered dependent when h er h u s b a n d retired from UPS in March 2011. The Retiree Plan offers medical, dental, and vision coverag e f

or elig ible r e tired employ ees, their
spouses, a

nd their d ependent childre n

. Coverag e under the Retiree Plan beg ins at retirement and ends when the retiree o r covered dependent turns six t y

- five a nd becomes elig ible for Medicare.

A. The Summary Plan Description

The Retiree Plan’s substantive benefit p r ovisions a re

ex p lained in the Summary Plan D escription (SPD), w hich the Retiree Plan Document incorporates by reference. The SPD
g overns b oth the Employ ee Plan and the Retiree Plan, and is comprised of two p arts: (1) the 2006 SPD and (2) a series of summaries of material modifications describing amendmentsK I N G V

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U E C R O S S A N D B L U E S H I E L D 6

to the plans that have b een a dopted since 2006. 1 The 2006 SPD is ninety -six pag es a n d has ni n e t e e n sections on topics such a s “I f a Claim is Denied,” “Retired Employ ee Health Care Coverag e,” and “ERI SA and Other I mporta n t I nformation.” The table of c o n tents lists the nineteen

s e ctions, but d oes not refer to a ny of the amendment s t h at appear in the summaries of material modifications.

UPS issued twelve such summari es b etween May 2006 and December 2012. Each summary indicates the month a nd
y ear it was issued a

nd whether it modifies one or both of the plans. UPS instructs plan p articipants to keep the summaries with the 2006 SPD for future reference. The summaries vary b e t ween one and four p ag e s in leng th, and total twenty -fi v e pag es all tog ether. They are not cumulativ e; e a ch summary of material modifications desc r i b e s only newly announced amendments. Thus, to determine t h e current lang uag e for each benefit provision, a plan parti c i p a n t must read the relevant section f

rom the 2006 SPD and then read all twelve summaries of the plan modifications.

B. The Lifetime Benefit Maximum

The Employ ee Plan and Retiree Plan orig inally contained different lifetime benefit caps o n medical c o verag e

. The 2006 SPD se c t i on titled “ Retired Employ ee Health Care Coverag e” e x plains: “There is a new lifetime max imum that beg ins when y o u retire and become elig ible for benefits from the UPS H ealth and W e l f ar e Packag e for Retired

1 ERISA r e q u ires p lan ad m in istrato rs t o p ro v id e ben ef i ciaries w i th b o th a su

m m ary p lan d escrip tio n an d s u m m aries o f a n y m aterial

m o d if icatio n s m ad e to th e p lan

. See 2 9 U.S.C. § § 1 0 2 2 (a), 1 02 4 (b )(1 ).K I N G V

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U E C R O S S A N D B L U E S H I E L D 7

Employ ees.” On the nex t pag e, under the s u b h ea ding “The L ifetime B enefit Max imum,” the SPD states:

Up to $500,000 in lifetime medical benefits (unlimite d in HMO O ption) can be paid for each person p articipating in the UPS Health and W e lfare Packag e for Retired Employ ees. Only benefits paid while y ou receive c overag e

as a r e t i red employ ee count toward the $500,000 total.

. . . Each J anu a ry , up to $1,000 in in d i vidual benefits paid during the preceding y ear w ill automatically be r estored.

I n an earlier section titled “ Medical,” the SPD ex plains that the Employ ee Plan has a $1 m i l l i o n lifetime max imum. I n September 2 010, however, UPS issued a summary of material modifications (the 2010 Summary of Modifications) that eliminated the Employ ee Plan’s lifetime b e nefit cap in
response to the Patient Protection and A ffordable Care A ct (the A ffordable Ca r e Act). The 2 010 Summary o f Modifications provided that this amendment would bec o me effective on J anuary 1, 2011. The parties dispute whether this modification also applies to the Retiree Plan.

C. The 2010 Summary of Modifications 2

The 201 0 Summary of Modifications included amendments to both the Employ ee Plan a nd the Retiree Plan. At the top of the first page, the 2010 Summary o f Modifications states, in italiciz ed font:

2 S ee th e A

p p en dix f o r a co p y o f t

h e 2 01 0 Su m

m ary o f Mo d if

icatio n s.K I N G V

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U E C R O S S A N D B L U E S H I E L D 8

T h is notice d

etails Plan improvements,

c h a n g e s , c l a r i

f i c a t i o n s , a n d r e q u i r e d notifications e

ffective January 1, 2011, unless otherwise noted. I

tems noted with an asterisk (*) d o not apply to retirees o r their cove r e d dependents. Y

ou should keep this w i t h your UPS Health and W

elfare Package and UPS Health a nd W

elfare Package for Retired Emplo yees Summary Plan Description for future reference.

Directly under this te x t , t h e pag e divides into two columns. A t the top o f the column on the left-hand side of the pag e , there is a sing le-spaced parag raph of tex t titled “Health Care Reform*” in bold. B elow the title, this parag raph states:

I n March, President Oba m a sig ned into law the Patient Protection and Affordable Care A ct (PPACA), also known as “health car e reform.” Eff

e c t ive J anuary 1, 2011, PPACA requires the following chang es to y our UPSadministered health care plan. I f the PPACA provi s i o ns requiring these Plan chang es a re

ever repealed, the chang es made so lely as a result of PPACA will be terminated a n d the provisions o f the Plan modified b y PPACA will be reinstated effective the date the law is repealed.

I mmediately below this parag raph is another bold h ea d i ng , which states “Grandfather Plan Status,” followed by two parag raphs of sing le-spaced tex t. After these two parag raphs, there is a third bold heading in the left column, which states “Dependent Chi l d r en U nder Ag e 26,” followed by fiveK I N G V

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U E C R O S S A N D B L U E S H I E L D 9

parag raphs of sing le-spaced tex t. The tex t under this heading continues from the bottom of the column on the left-hand side of the first pag e to the column on the rig ht

- h a n d s ide o f the f i r s t pag e, a

nd onto the second pag e. On the second p a g e, approx imately one-third of the w ay d own the left colu mn, there is a fourth bold h eading

, which states “Elimin a tion o f L ifetime Max imum B enefits.” This section c ontains o ne parag raph of sing le-spaced tex t:

L ifetime dollar limits on ag g r eg ate benefits will be eliminated from y o ur Plan effective J anuary 1, 2011. I f y ou are a n oth e rwise elig ible employ ee whose coverag e previously ended upon reaching y our lifetime max imum benefit under the Plan, y o u will h ave 30 day s, beg inning the first day o f the annual enrollment period, to re-enroll in the Plan. I f
y ou choose to e n roll, y our coverag e is effective J anuary 1, 2 011 (as long as y ou continue to meet the Plan’s elig ibil ity requirements). You may also enrol l any dependents whose coverag e ended upon reaching their lifetime max imum.

Upon v ery c lose inspection, one can discern that the “Health Care Reform*” h e a ding at the top of the first pag e is in a differe n t font ty

pe than the three heading s that follow, including “Elimination of L if e time Max imum B enefits.” According t o the defendants, the “Health Care Reform*” heading is in Arial font, while the other heading s are in Times New Roman, a

nd the Arial h e a d i n g i s in a larg er f ont siz e

. The differences in f

ont ty p e and siz e are difficult to di scern.K I N G V

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U E C R O S S A N D B L U E S H I E L D 10

After the “Eliminatio n of L ifetime Max imum B enefits” section, the 2010 Summary of Modifications has three more bold heading s in Times New Roman font with corresponding
parag raphs of tex t. This te x t w raps from the column on the left-hand side of the second p ag e into the column on the rig ht-hand side. One-third of the way down the r ig ht column, there is a nother bo l d h e a ding in Arial font: “Mental Health Parity .” This heading is followed by two more bold heading s in Times New Roman f

ont on the second pag e. On the third
pag e, there are three bold heading s in Arial font. None of the other h e a ding s in the 2010 Summary of Modifications b esides “Health Care Reform*” contains an asterisk.

II. P lan Adm inistration and Claim Appeals P rocess

The 2006 SPD g rants UPS as Plan Administrator “the

ex c lusive rig ht and discretion to interpret the terms a nd conditions of the Plan, and to decide all matters arising in its administration and operation, including questions of fact a nd issues p ertaining to elig ibility for, and the amount of, benefits
to be p a i d b y the Plans.” 3 The 2006 SPD nonetheless authoriz es UPS “to deleg ate its a dministrative duties to o ne

or more individuals o r committees within UPS, or to one o r

more outside admini strative services providers.” I t elaborates that “ [ p] r esently

, certain administrative services w ith reg ard
to the processing of c l aims and the pay ment of benefits a

re provide d u n der contract,” including a contract w ith B lue

3 T h e SP D f

u rth er states: “ A n y su ch in t erp retatio n o r d ecisio n sh all,

su b j ect to th e claim s p ro ced u re d escrib ed h erein

, b e c o n clu siv e an d b in d in g o n all in tere s ted p erso n s, an d sh all, co n sisten t w ith th e P lan s ’
term s an d co n d i tio n s, b e ap p lied in a u n i f o rm m an n er to all sim ilarly situ ated par ticip an ts an d t h eir co v ered d ep en d en ts. T h e Plan A d m in istrato r m ay deleg ate certain d iscretio n ary au t h o rity to o n e o r m ore

co m m ittees.”K I N G V

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U E C R O S S A N D B L U E S H I E L D 11

Cross to a dminist e r medical coverag e for some p lan participants.

The 2006 SPD describes a two-level appeals process for denied b enefit claims. Upon receiving written notice from the c laims administrator that a claim is denied, the participant has 180 day s to file a fir s t -level appeal with the c laims administrator ( i.e.
, B lue Cross). I f the claims administrator de n i es the c laim ag ain, the p articipant has 60 day s to file a second-level appeal with the UPS Claims Review Committee (CRC). UPS deleg ated its discretion to interpret t h e plan to the CRC.

III. Linda K ing’s Medical Claim

I n the fall of 2012, L inda King suffered an infection that

c a u sed the destruction of several vertebrae and necessita t e d immediate back surg e ry and ex tensive r e h a bilitative care. The record reflects that Mrs. King or h e r c a re providers reached out to B lue Cross to o btain precer tification for her
treatment startin g i n November 2012. The 2006 SPD describes “precertification” as a process to ens u r e that hospital stay s, convalesce n t facility stay s, home health care services, and hospice servi c es are “medically necessary a nd appropria te.” Plan participants and their treating phy sicians

are notified b y mail o f the certification decision a nd participants are charg ed a $250 fee for the failure to precertify

, but the 2006 SPD does not warn that even if a p lan participant o b t a ins precertification, the plan or c laims administrator may still deny benefit claims for other reasons.

The record contains a series of letters from B lue Cross to Mrs. King dated between November 2 8, 2 0 1 2 and F ebruary 11, 2013. The letters approve medical care at severalK I N G V

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U E C R O S S A N D B L U E S H I E L D 12

hospitals and other facilities provided between N o vember 7, 2012 and March 13, 2013. The letters a ll state that they a re “in response to a request for s e r v i c e(s)/procedure(s),” a nd certify specific treatm ent as “medically necessary .” The dates on the letters indicate that in some cases the letters were sent after the approved care o ccurred. A ll the letters c ontain the following qualification:

A p p r o v a l t h r o u g h t h e H ea l t h C a r e Manag ement Department is not a g uarantee o f
pay ment of benefits. Pay

me n t o f benefits is subject to several fac t o r s , including

, but not limited to, elig ibility a t the t i m e of service,
pay ment of premiums/contributions, amounts allowable for servi c e s, supporting medical documentation and other terms, conditions, limitations and ex clusions set forth in y our

. . . Summary Plan Description

. . . . F o r questions reg arding b enefits, please contact the Customer Service unit at the telephone number listed on t h e b ack of y our health insurance c ard. Yo u r emain r esponsible for

a n y o u t

- o f

- p o c k e t r e q

uirements, including

, bu t

no t limited to, coinsurance, copay ments, deductibles and/or non-covered charg es.

On F e br u a r y 19, 2013, B lue Cross sent Mrs. King an

ex p lanatio n of benefits stating that o n ly $133,601.41 o f $949,755 bill ed for medical c are was c overed by h er p lan because she had r eached the lifetime benefit max imum. The

ex p l a n a t i on of benefits stated that Mrs. King may owe Scripps Memorial Hospital $ 5 78,551.34 for care providedK I N G V

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U E C R O S S A N D B L U E S H I E L D 13

between November 2–28, 2012. 4 B ecause t he F ebruary 19

ex p lanation of benefits indicated that Mrs. King reached her plan’s lifetime benefi t m ax imum in November 2 012, it also
sug g ested that the plan w ould not cover the cost of care that had already been provided between December 20 1 2 a nd F ebruary 2013.

I n response, Mrs. King s en t a letter to the B lue Cross Claims Review Section on March 1 4, 2013. The letter

ex p lained: (1) the ex p lanation of benefits was the first written notice Mrs. King received that h er health insurance would not

cove r a l l her medical bills; (2) the defendants had assured Mrs. King and her husband that her health benefits had no limit; 5 (3) she had a telephone conversation with a B lue Cross
represe n t a t i v e about an unrelated issue during the last week of J a nuary 2013 in which the representative mentioned for the first time that she w as only $10,000 away from t h e l i f e t ime

max imum; (4) after this conversation, Mrs. King immediately purchased health insurance throug h he r employ ment, effective F e bruary 1, 2 013; and ( 5) Mrs. K i n g discharg ed herself from a rehabilitation facility aga inst medical advice

on F ebruary 9, 2013 out of concern that the care she received would not be covered by the Retiree P l an. Mrs. King asked

4 T h e ex p lan atio n o f b en ef i ts d o e s n o t ex p lain th e d iscrep an cy b etw een th e $ 8 1 6 ,1 5 3 .5 9 in ch arg es f or care n o t co v ered b y th e p lan an d th e $ 5 7 8 ,5 5 1.3 4 th at Mrs. Kin g m ay o w e h er p ro v id er.

5 T h e letter d o es n ot sp ecif y w h ich d ef en d an ts assu

red Mrs. Kin g an d h er h u sb an d th at h er b en ef its h ad n o lim it. T h e letter states: “ B o th B lu e Cro ss an d UP S h av e m islead [sic] u s. My h u sb an d w as assu red t h at ou r h ealth ben ef

i ts h ad n o lim i t. I w as reassu red th is w a s t h e case at least

w eek ly b y case m an ag ers w h o sp o k e w ith B lu e Cro ss.” Mrs. Kin g p assed

aw ay in D ecem

b er 2 01 4
, an d th ere is n o d eclaratio n f ro m h er in th e

reco rd . Mr. Kin g ’ s d eclaratio n d o es n o t m en tio n

th ese assu

ran ces.K I N G V

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U E C R O S S A N D B L U E S H I E L D 14

B lue Cross to “review t h e se facts and advise o f y our decision.” A lso on March 14, 2013, B lue Cross sent another letter to Mrs. Ki n g announcing that she had reached the lifetime max imum, but this letter informed her that the limit was reached on J anuary

1, 2013.

IV. The Instant Litigation

On May 30, 2013, Mrs. King fil e d suit a g ainst the defendants under sections 502(a)(1)(B ) a nd 502(a)(3) o f ERI SA. See 29 U.S.C. § 1132(a)(1)(B ), (a)(3). O n J u ne 3, 2013, Mrs. King ’s counsel sent a letter to the C R C stating
t h a t UPS had wrong fully imposed the $500,000 lifetime benefit max imum, noting that B lue Cross did not respond to M r s. King ’ s first-level appeal, a nd including a copy o f h e r March 14 lette r and the district c o urt complaint. The letter asked that UPS “immediately r eco n s i der” its decision to impose the lifetime benefit max imum. O n J u l y 10, 2013, B lue Cross denied the f

irst-level appeal, concluding that the lifetime benefit cap applied to the Retiree Plan.

Mrs. King filed a first amended c omplaint on September 9, 2013. I n it, she soug ht de c l a ra tory relief and alleg e d that the defendants breached the R etiree Plan contract and their fiduciary duties i n violation of ERI SA. The defendants moved to d ismiss, arg uing that the 2010 Summary o f Modific a t i o n s d i d n o t eliminate the lifetime benefit max imum in the Retiree Plan.

The d istrict court denied th e motion to dismiss. I t ruled that the 2 010 Summary of Modifications was ambi gu o u s a s to whether the Retiree P l a n was subject to a lifetime benefit

ma x imum, that both p arties’ interpretations of the 2010 Summary of Modifications were “reasonable,” and that “theK I N G V

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U E C R O S S A N D B L U E S H I E L D 15

distinction in font ty

pe without more, such as indentation o f the subheading s, numbering

, or dif f e r e n t siz ed tex t may not

even alert the a verag e plan p articipant that the Arial heading s

are ‘major heading s’ and that the Times New R oman heading s are subheading s within each major heading .”

S u bsequently

, the CRC notified Mrs. King that t h e second-level review o f her claim was “not favorabl e

. ” The CRC emphasiz ed the italiciz ed d isclaimer at the t o p o f the 2010 Summary of Modifications’ f irst pag e, which states, “I tems noted with a

n asterisk ( *) d o n ot apply to retirees o r their covered dependents.” The CRC reasoned that the word “items” does not mean “parag raphs,” sug g esting that the asterisk a fter the “Health Care Reform*” hea d i ng refers to

more than just the one parag raph immediately below the heading

.

The CRC also stressed that the sole p a r a g raph under the “Health Care Reform*” heading states th at t he Affordable Care Act “ r e q u i res the following chang es to y our UPSadminis t e r e d health care plan.” T he CRC reasoned that because there are n o chang es contained in that p a r ag raph itself, the headingmust refer to parag raphs that follow. The CRC n oted that all the subsequent parag raphs d escribe

r e q u ired chang es under the A ffordable Care Act u ntil the “Mental Health Parity ” heading on the seco n d p ag e , a nd concluded that because the “ Health Care Reform* ” a n d “M e n t a l Health Parity ” heading s a re in a different font ty

pe and siz e, al l t h e tex t b etween these heading s constitutes a sing le “item. ” Under the CRC’s interpretation, the “Elimination of L ifetime Max imum B enefits” para graph is part of the larg er “Health Care Reform*” item and the

a s t e risk indicates that the e limination of lifetime benefitK I N G V

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U E C R O S S A N D B L U E S H I E L D 16

max imums does not apply to retirees or their covered dependents.

On O ctober 23, 2014, the defendants moved for summary judg ment. Roug h ly two months later, Mrs. King passed away and Mr. King was substituted as the r epresentative of Mrs. King ’s estate. The district court thereafter g ranted summary judg ment t o the defendants, ruling that: (1) the p lan administrator did not abuse i t s discretion by interpreting the Retiree Pl an t o include a lifetime benefit max imum; (2) the reasonable ex pe c t a t ions doctrine does not apply to selffunded welfare benefit plans; (3) the Affordable Care Act did
not amend ERI SA to b an lifetime benefit caps f or retiree-only plans; a nd ( 4 ) t h e defendants d id not breach their fiduciary duties t o Mrs. King

. The d istrict court did not address Mr. King ’s arg ument that the 2 0 1 0 S ummary of Modifications violates ERI SA’s disclosure requirements. Mr. King timely appealed.

STANDARDS OF REVIEW

“W e review de n o v o a district court’s g rant of summary judg ment.” Spinedex P h ysical Therapy USA Inc. v. U nited H e a lthcare of Ariz., I

n c. , 770 F .3d 1282, 1288 (9th Ci r. 2014). “The interpretat i o n o f a federal statute

. . . is a question of law, and we review it de novo .” A rnold v

. Arrow Transp. Co. of

Del.

, 9 26 F .2d 782, 785 (9th Cir. 1991). W ith respect to the breach of fiduciary duty claims, the court “must determine, v iewing the e vidence in the lig ht most favorable
to the nonmoving p a

r ty , whether there are any g enuine issues of material fact a

nd whether the district court co r r e ctly

a p plied the relevant substantive law.” Farr v. U .S. W

. Commc’ns, Inc. , 151 F .3d 908, 913–14 (9th Cir. 1998).K I N G V

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U E C R O S S A N D B L U E S H I E L D 17

D ISCUSSION

I. ERISA’s Ban on Lif etim e Benef

it Maxim um s

W e first consider whether E R I S A, as amended by the Affordable C a

re Act, bans lifetime benefit max imums in retiree-only plans for if it does, there would b e n o need to reach plaintiff’s other claims. W e conclude that it does not.

The Affordable Care Act amended both the Public Health Service A ct (PHSA) a

n d E R I S A. The amendment to the PHSA states, in relevant p art: “ A g roup health plan and a h e a l th insurance issuer o ffering g roup or individual health insurance coverag e may not e s t a b l i s h

. . . lifetime limits on the dollar value of be n ef i t s for any participant o r beneficiary

. . . .” 4 2 U.S

. C

. § 300g g -11(a)(1). The Affordable Care Act added a claus e t o ERI SA that states, subject to ex ceptions not relevant here, “[ T] h e provisions of part A of title XXVI I of the Public Hea l t h S e rvice Act (as amended by the Patient Protection and Affordable Care Act) shall apply to g roup h e a lth plans, and health insurance issuers providing health insurance cover a g e in connection with g roup health plans, as if included i n t h i s s u b part

. . . .” 29 U .S.C. § 1185d(a)(1) (emphasis supplied). These provisions include the ban on lifeti m e benefit limits. Read in isolation, this
sug g ests that the Affordable Care Act inco r p o rated the PHSA’s ban on lifetime benefit limits into ERI SA.

Section 7 32 o f ERI SA, however, c reates an ex ception for certain retiree-only plans. T his ex ception, which predates the Affordable Care Act, states: “ The requirements of this part (other t h a n section 1185 of this title) shall not apply to any g roup health plan (and g roup health i n surance coverag e offered in connection with a g ro u p h ealth plan) for any p lanK I N G V

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U E C R O S S A N D B L U E S H I E L D 18

y ear if, on the firs t day of such plan y e a r, such plan has less
t h an 2 participants who are c u rrent employ e es.” 29 U.S. C

. § 1191a(a). The parties do not dispute that t h e R e t iree Plan at issue is such a plan.

The p laintiff arg ues, however, that this ERI SA ex c eption has b ee n impliedly repealed by the Affordable Care Act’s amendments to the PHSA which not only introduced a ban on lifetime benefit limits, but also eliminated a similar ex c eption for certain retiree-only p lans. Pub. L

. No. 110-2, 121 Stat. 4.

The Supreme Court “has repeatedly stated

. . . that absent

a clearly ex p ressed cong ressional intention, repeals b y implication are not favored.” Branch v. Smith

, 538 U.S. 254, 273 (2003) (citations omitt ed) (internal quotation marks omitted). “An implied rep e a l w ill only be found where provisions in two statutes are in ‘ i r reconcilable conflict,’ o r where the latter Act covers the whole subject of the e a r l i e r

one and ‘is c l early intended as a substitute.’” Id. I r r e c oncilable c onflict occurs if “ there is a positive
repug nancy ” between c ompeting pro v i s ions or if those provisions cannot “mutually c o

- e x ist.” Radzanower v

. Tou c h e R oss & Co.
, 426 U .S. 148, 155 (1976) (quoting Morton v. Mancari
, 417 U.S. 535, 551 (1974)). “ [ W ] hen two statutes are capable of co-ex istence, it is the duty of the courts . . . to reg a

rd each as effective.” Id.

Th e plaintiff submits that there is an “irreconcilable conflict” be t w een the ban on lifetime b enefit limits in the PHSA and the ex ception for retiree plans in ERI SA. B ut “[ i] t is not enoug h to show that the two statutes produce differing results when applied to the same factual situation, for that no

mo r e than states the problem.” I d

. Courts “ha[ ve] not hesitated to g ive effect to two statutes that overlap, so long a sK I N G V

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U E C R O S S A N D B L U E S H I E L D 19

each reaches some distinct cases.” J.E.M. Ag Supply, Inc. v

. Pioneer Hi-Bred I

nt’l, Inc.
, 534 U.S

. 1 24, 144 ( 2 001); Randolph v

. IMBS, Inc.
, 368 F .3d 726, 731 (7th Cir. 2 004) (“W hether overlapping an d n ot entirely cong ruent remedial

s y stems can c oex ist is a question with a long history at t h e Supreme Court, and a

n established answer: y es.”). Althoug h the plaintiff sug g es t s—in a footnote in his opening brief—that the Affordable Care Act has all but eliminated the disti n c t i on between ERI SA and non-ERI SA plans, ERI SA and the PHSA are not co-ex ten s ive in scope. F or ex ample, ERI SA, unlike the PHSA, ex empts g overnmental plans from
many of its mandates. Compare 29 U.S.C. §§ 1 0 0 2 ( 3 2 ), 1003(b)(1), with 42 U.S.C. § 300g g -21(a)(1). Moreover, the
p l a i n tiff h as not shown that it is impossible f or sponsor s , issuers

, o r administrators to conform to the r equirements o f both ERI SA a

nd the PHSA. See Randolph

, 368 F .3d at 731 (“Overlapping statutes do n ot repeal one another b y implication; as long as people can co m p l y with both, then
courts can enforce both.”). Thus, we c annot say that the b an on lifetime benefit limits in the PHSA and the ex ception for certain r etiree-only plans in ERI SA are in irreconcilable conflict, n o r c o nclude that the ERI SA ex ception was impliedly repealed by the Affordable Care Act.

The d istrict court did not err in r uling tha t E R I S A’s b an

on lifetime benefit max imums doe s n o t apply to the Retiree Plan. 6

6 T h e Co m

p lain t an d th e F irst A m en ded Co m p lain t b ro ad ly alleg ed
t h a t t h e l if

etim e b en ef

it lim it in th e Retirem en t P lan w as l if ted b y t h e A f f o rd ab l e Care Ac t an d p ray ed f o r declarato ry relief as w ell as relief

u n d er ERISA

. Sin ce t

h e p lain t if

f ’ s ch allen g e d id n o t arise u n d er th e P HSA
, th e d istrict co u rt d id n o t ru le o n , am o n g o th er th in g s , w h eth er th e P HSA b an s lif

etim e b en e fi t lim its in certain retiree- on ly p lan s. W e

acco rd i n g ly

o f f er n o o p in io n

as to th e m erits o f

su ch a claim

.K I N G V

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U E C R O S S A N D B L U E S H I E L D 20

II. ERISA’s Disclosure Requirem ents

The plaintiff contends that the SPD, as a me n d e d by the 2010 Summary of Modifications, violates ERI SA’s statutory and reg u latory disclosure requirements because it doe s n ot

r e a sonably apprise the averag e plan participant that the lifetime benefit max imum continues to apply to the R e t i r ee Plan. W e ag ree.

“ ER I SA’s central policy g oal is to protect benefit p l a n participants ‘by requiring the disclosure a nd r e p orting to participants and beneficiaries of financial a nd other information

. . . a n d b y providing for appropriate remedies, sanctions, and ready access t o the F ederal courts.’” Scharff

v. Raytheon Co. Short Term Disability Plan

, 581 F .3d 899, 904 (9th Cir. 2009) (alteration in orig inal) (quoting 29 U .S.C. § 1001(b)). To further this g oal, ERI SA requires that benefit plans provide participants with a SPD and a “summary of any

m a t e r i a l modification in the terms of the plan.” See 29 U.S.C. § 1022(a).

The SPD and a

ny summaries of material modifications must “be written in a manner calculated to be understood b y the a verag e plan participant.” Id

. T h e S PD must also “be sufficiently a c c u

r a t e a n d c o m p rehensive to reasonably apprise such participants and b e n e f iciaries of their rig hts a nd oblig ations under the plan.” Id. ERI SA requires in particular that the SPD include any “circumstances which may result in disqualification, ine l i gi b ility

, or denial or loss of benefits.” Id. § 1022(b). This court summariz ed the combined effect o f these requirements in Scharff as:

[ T] he SPD must ex p l ain the “circumstances

w h i c h m a y r es u l t i n d i s q u a l i f i c a t i o n ,K I N G V

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U E C R O S S A N D B L U E S H I E L D 21

inelig ibility

, or denial or loss of benefits” in a

manner “calculated to be understood b y the

a v e r a g e p l a n p a r t i c i p a n t , ” a n d t h a t information must be “s u f

f i c i ently accurate a

nd comprehen sive to reasonably apprise” plan participants of their r i gh ts and oblig ations under the plan.

581 F .3d at 904 (quoting 2 9 U.S.C. § 1022(a)–(b)).

F ederal reg ulations provide further detail on how to fulfill ERI SA’s disclosure requirements:

The format of the summar y plan description
must not have the effe c t to [ sic] misleading

, misinforming or failing to inform participants and b eneficia ries. Any description o f

ex c epti o n, limitations, r eductions, and other restrictions of p l an benefits shall not be minimiz ed, rendered ob scure or otherwise

m ad e t o ap p e a r u nimpor t a n t

. S u c h

e x c e p t i o n s , l i m i t a t i o n s , r e d u c t i o n s , o r restrictions of plan benefits shall be d e scribed

or summariz ed in a manner not less prominent than the sty le, captions, printing ty pe, a nd prominence used to describe or s u m m a riz e plan benefits.

. . . The d e scription o r summary of restrictiv e plan provisions need
not be disclosed in t h e summary plan description in close c o njunction with the description or summary

of benefits, providedK I N G V

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U E C R O S S A N D B L U E S H I E L D 22

that a djacent to the b e n e fit d escription the
pag e on which the restrictions are described is noted.

29 C.F .R. § 2520.102-2(b).

The plaintiff cites to Spinedex

, 770 F .3d at 1294–95, for the propo s i tion that benefit limitations are unenforceable if they viol a t e ERI SA’s statutory and r eg ulatory disclosure requirements. I n Spinedex

, we held that limitation provisions in two plans were unenforceable because they “w ere not properly disclosed in the SPDs.” Id. at 1294. The provisions were two-y

e ar limitations periods for filing suit to challeng e the denial of benefit claims under the plans a t i ssue. Id. at 1295. The limitations peri o d s were “buried deep” in the SPDs, and were “not in ‘cl o s e conjunction’ to benefits provisions.” Id. Spinedex further noted that t h e r e w as no

“ reference, adjacent to the benefits description, to the pag e number on w h i ch the ‘L imitation of Action’ provision appears.” Id.

Spinedex ex plained that this court e mploy s “a ‘reasonable plan p articipant’ standard” to analy z e t h e disclosure

r equirements in 29 C.F .R. § 2520.102-2(b), and conclud e d that, under this standard, the court does not “require a p lan beneficiary to read every provision of an SPD i n order to

ensure that he or s h e d i d not miss a limitation provision,” because “ [ s] u ch a r e q

uirement is what the reg ulation is specifically desig ned to avoid.” 7 70 F .3d at 1295, 1296. The
court held that the limitations period s i n the Spinedex plans

were unenforceable beca use they “were not disclosed in compliance with 29 C.F .R. § 2520.102-2(b).” Id.K I N G V

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U E C R O S S A N D B L U E S H I E L D 23

The 2010 Summary of Modifications amending the SPD that g overns Mrs. King ’s claim likewise does not satisfy ERI SA’s disclosur e requirements because, at bottom, the document was not “ written in a manner calculated t o be understood by the a verag e p l a n p a r ticipant.” 29 U .S.C. § 1022(a).

F irst, rather than issue an amended SPD, or even cumulative summaries of material modifications

, U PS announced plan a mendments in a series of summaries, all of which must be read in conjunction w ith the 20 0 6 SPD to determine a vailabl e benefits. 7 The format used by UPS required plan participants to first read the 2006 SPD section titled “Retired Employ ee Health Care Coverag e,” where o ne would learn about the lifetime benefit max i m um. N ex t, the
pa rt i c i p ants would have to read all twenty -five pag es o f the summaries of material modificatio n s t o determine whether
any amendments modified the lifetime m a x i mum. There is

no comprehensive table of c o n tents that allows participants to verify which SPD terms h a v e been amended by the modifications or to confirm that any particular provision has
not been modified. The 2006 SPD benefit provisions do not cross-reference the summaries of material modifications, a nd the summaries do not c onsistently cr oss-reference the 2006 SPD. Notably

, the 2010 Summary of Modifications does not cross-reference the Retiree Plan’s lifetime benefit max imum.

7 W e n o te t

h at ERISA req u ires UP S as P lan A d m in istrato r to issu e an

u p d ated S P D ev e ry f

i v e y ears “ w

h i ch in teg rates all p lan am en d m en ts

m ad e w ith in su ch f

iv e- y ear p erio d .” 2 9 U

. S.C. § 1 0 2 4(b )(1 )(B ). T h e

reco rd su g g ests th at UP S d id n o t co m ply w ith th is req u irem en t, b ecau s e UP S d i d n ot issu e a n u p dated SP D in 20 1 1
, f iv e y ears af

t er it issu ed th e 2 0 0 6 SP D.K I N G V

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U E C R O S S A N D B L U E S H I E L D 24

F urthermore, e ven e x amining the 2010 Summa r y o f Modifications in isolation, the defendants’ interpretati on requires the averag e plan participant to read t h e entire document, notice the s u b t le shift in font ty pe and siz e between the “Health Care Re f o r m * ” heading and the other heading s that follow, a n d s omehow intuit that all of the tex t between the “Health Care Reform*” heading on the first pag e and the “Mental Health Pari t y ” h e a ding on the second pag e describes required chang es u n d er the A ffordable Care Act. B ut the fact that all of these parag raphs relate to the Affordable Care Act is not apparent f r o m t h e tex t. 8 I n fact, the “Elimination of L ifetime Max imum B enefits” p arag raph does not mention the A ffordable Care Act at all. That
parag raph states:

L ifetime dollar limits on ag g reg ate be nefits will be eliminated from y o ur Plan effective J anuary l, 2011. I f y ou are an otherwise elig ible employ ee whose coverag e previously ended upon reaching y our lifetime max imum benefit under the Plan, y ou will have 30 day s, beg inning t h e first day of the annual enrollment period, to re-enroll in the Plan. I f
y ou choose to enroll

, y our coverag e is effective J an u a r y l, 2011 ( as long as y ou continue to meet the Pla n’s elig ibility

8 No r is i t ap p aren t, o r ev en d iscern ab le u p on clo s e ex am in atio n , th at th e in d iv id u al p arag rap h s b etw een th ese tw o h ead in g s w ere in ten ded t o b e

a sin g le “ item ” b ecau se th e p arag rap h s p ertain to a d iv erse set o f t o p ics, in clu d in g “ Gran d f

ath er P lan Statu s,” “ D ep en d en t Ch ild ren Un d er A g e 2 6 ,” “ Elim in atio n o f L i f etim e Max im

u m Ben ef its,” “ Elim in atio n of L if etim e an d A n n

u al Do llar L im i ts f

o r ‘ Essen t ial B en ef

its,’ ” “ Elim in atio n

o f P re- ex istin g Co n d itio n s o n B en ef its f o r Ch ild ren Un d er A g e 19 ,” an d

“ H CSA Reim b u rsem en t o f

Ov er- th e- Co u n ter Dru g s.”K I N G V

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U E C R O S S A N D B L U E S H I E L D 25

requirements). You may also enroll a n y dependents whose coverag e ended upon reaching their lifetime max imum.

The effective d ate f

or the elimination o f the lifetime

max imum is the same date mentioned in the first p arag raph under the “Health Care Reform*” heading

, but other chang e s in the 2 010 Summary of M o d i f i cations, unrelated to the Affordable Care Act, also use this effective date.

As ex plained, the d efendants arg ue that the reference to “the following chang e s” in the “Health Care Reform*”
parag raph indicates that the a st e ri s k in the “Health Care Reform*” heading applies to all the parag rap h s b etween the “Health Care Reform*” h e a ding on the first pag e and the “Mental H ealth Parity ” h ead i n g o n the second p ag e. B ut

even assuming that the averag e R e t i ree Plan participant would r ead this parag raph (despite the asterisk in the heading which plainly states that the parag rap h d oes not apply to retirees), the participant would not know how many chang e s

are included in “the following chang es.” That phrase can be read to refer to just the chang e s i n t h e nex t two parag raphs under the heading “Grandfather Plan Status,” or it can be read to refer to some unknown number of additional chang es.

Notably

, th e two “Grandfather Plan Status” parag raphs

ex p lici t l y discuss the Affordable Care Act, but the nex t heading is “Dependent Children Under Ag e 26,” and the five
parag raphs th a t follow it do not refer ex plicitly to the Affordabl e C a r e Act at all. This org a n iz ation could easily
sug g est to the r eader that these parag raphs do not relate to the “Health Care Reform*” head i n g. Of the three sections that fo l l o w “Elimination of L ifetime Max imum B enefits,” onlyK I N G V

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U E C R O S S A N D B L U E S H I E L D 26

two men t i o n the Affordable Care Act. 9 I n short, even assuming that the ave r a g e plan participant would read the first parag raph—in spite of the fact that the heading with the asterisk informs the read e r t h a t it does n ot apply to retirees—the participant wo u l d n o t know how many o f the following parag raphs fall within “the following chang es” not applicable to the Retiree Plan. A p articipant could reasonably conclude that the inapplicable chang es inc l u d e only the “Grandfather Plan Status” parag raphs o r o nly those
parag raphs t h at ex plicitly mention the A ffordable Care Act. Cong r ess mandated that ERI SA disclosures must be desig n ed
to prevent plan participants from having to en ga g e in such close parsing of the t e x t , format, and font to determine whether a benefit limitation applies to their plan.

Comparing the 2010 Summary of Modification s t o the other summaries of material modifications demonstrates several way s in w hich U P S could have made the 2010

a m e n d m ents easier for the averag e plan participant to understand. F irst, the October 2006 Summa r y o f Material Modifications places small subheading s d i rectly below the larg e r major heading s, with no i n t e r v ening tex t, to indicate

9 A t oral arg u m en t, d ef

en se co u n sel w as ask ed h o w

— asid e f ro m th e

su b tle ch an g es in f

o n t ty pe an d size—a p l an p articip an t w ou l d k n o w th at th e item s asso ciated w ith th e “ Health Care Ref o rm * ” h ead in g en d w ith th e

“ Men t al Health P arity ” h ead in g

. S ee Oral A rg u m en t at 19 :0 9

– 2 3 :3 0
, 2 6 :2 0

– 2 7 :0 0
, Kin g v. Blu e Cro s s & Blu e S h ield o f Ill.

, No

. 1 5

- 5 5 8 8 0 (9 th Cir. March 9
, 2 01 7 ), h ttp ://w w w .ca9 .u sco u rts.g o v /m ed i a/v iew

_ v id eo .p h p ? p k

_ v id =0 00 0 0 1 1 1 7 2

. Co u n sel resp o n d ed th at th e p a r t icip an t w ou ld k n o w th is b ecau se th e “ Men tal Health P arity ” h ead in g is f o llo w ed by a p arag rap h th at d oes n o t m en tio n th e Affo r d ab le Care A ct. S ee id

. at 2 6 :2 0

– 2 7 :0 0

. B u t th at is also tru e o f t h e parag rap h th at im

m e d i ately
p reced es th e “ Men tal Health P a r ity ” h ead in g , titled “ HCRA Reim b u rsem en t o f

Ov er- t h e- Co u n t er Dru g s.”K I N G V

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U E C R O S S A N D B L U E S H I E L D 27

that they are subheading s. The F ebruary 2007 Summary o f Material Modifications uses a noticeably larg er font siz e for the major h eading s. The October 2007 Summary of Material Modifications employ s asterisks nex t to six o ut of ten h eading s in the document to indicate that all six of t h o s e sections do not a

pply to retirees. B etter y et, in S ep tember 2012, U PS issued separate s u mmaries of material modifications for the Emplo y e e Plan and the Retiree Plan, clearly labeled as such at the top o f the first pag e. UPS could have used any one of these drafting strateg ies, among others,
to make c lear that the lifetime b enefit max imum still a pplied
to the Retiree Plan. The failure to do so was critical to Mrs. King

, who c ould have obtained h ealth insurance to cover the cost of her medical care throug h her own employ

ment.

Even with the benefit of d efense counsel’s arg ument, we cannot a gr e e t h at the subtle shifts in font siz e and use of a sing le asterisk on the first pag e of t he 2010 Summary o f Modifications can be d es c r ibed as “calculated to be understood by the a verag e plan participant.” 2 9 U

. S

. C. § 1022( a )

. I nstead, the document obscures whether the
parag r a ph titled “Elimination of L ifetime Max imum B enefits” applies to the R e t i r e e Plan. F or these reasons, we conclude that the SPD, as amended by the 2010 Summary o f M o difications, violates ERI SA’s statutory and reg ulatory disclosure r e q u i rements. W h ether the 2010 Summary o f Modifications violates E RI SA disclosure requirements is a distinct inquir y from whether the plan administrator abused its discr e tion and w hether the reasonable ex pectations doctrine applies. See, e.g. , S charff

, 581 F .3d at 906–07; Estate of Shockley v. Alyes ka Pipeline Serv. Co.
, 130 F .3d 4 03, 407 (9th Cir. 1997). B ecause we conclude that t h e defendants’ notice of the amendment to the lifetime benefit

max imum violates ERI SA, w e do not address: ( 1 ) w h etherK I N G V

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U E C R O S S A N D B L U E S H I E L D 28

UPS abused its di s c r e t ion as Plan Administrator b y interpreting t h e Retiree Plan to include a $500,000 lifetime benefit max imum; a n d ( 2) whether enforcing the lifetime

max imum would defeat Mrs. King ’s reasonable ex pectations of coverag e.

III. Breach of

F iduciary Duties

The plaintiff arg ues that UPS, the Retiree Plan, and B lue Cross breached their fiduciary duties to Mrs. King under ERI SA. “ERI SA requires a ‘fiduciary ’ to ‘disc h a r g e his duti e s w i t h r espect to a plan solely in the interest o f the participants a

nd bene fi ci aries.’” Farr
, 151 F .3d at 914 (quoting 29 U.S.C. § 1104(a)). “ The duty of loy alty is o ne o f the common law trust p r i n c i p les that apply to ERI SA fiduciaries, a

nd it e ncompasse s a d uty to disclose.” W a shington v. Bert Bell/Pete Rozelle NFL Ret. Pl a n , 504 F .3d 818, 823 (9th Cir. 2007) (internal citation omitted) (footnote omitted). “A fiduciary has an oblig ation to convey complete and accurate information material to the beneficiary ’s circumstance, even w hen a beneficiary has not specifically asked f

or the information.” Barker v. Am. Mobil Pow e r C o rp. , 64 F

. 3d 1397, 1403 (9th Cir. 1995). “[ F ] iduciari e s breach their d uties if they mislead p lan participants or misrepresent the terms or administration of a plan.” I d.

A. UPS and the Retiree Plan

The plaintiff arg u e s that UPS and the Retiree Plan breached their fiduciary du t i e s to Mrs. King by failing to comply with ERI SA’s d isclosure re q uirements. More specifically

, the p laintiff maintains that the 2010 Summary o f Modific a tions misled Mrs. King “into understanding thatK I N G V

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U E C R O S S A N D B L U E S H I E L D 29

there w as no lifetime cap on her plan.” U PS and the Retiree Plan contend that this claim must fail because: (1) the Retiree Plan is not ambig u ous with respect to whether the lifetime benefit max i m u m a

pplies to Mrs. K ing ’s claims; a nd (2) n e ither UPS nor the Retiree Plan misrepresented this fact
to Mrs. King

. The district court g ranted summary judg ment to the defendants. B e cause the SPD, as amended by the 2010 Summary o f Modificatio n s , does n ot comply with the relevant statutory and reg ulatory d isclosure requirements, the district cou r t e rred by g ranting summary judg ment to UPS and the Retiree Plan on the breach of fiduciary duty claims.

UPS and the R e t iree Plan had a duty to “provide sufficiently detailed information” a bout whether the lifetime benefit max imum ap p l i ed to the Retiree Plan after the September 2010 amendments. See Farr
, 151 F .3d at 915. A s

we have ex plained, the 2010 Summary of Mo difications failed to alert retirees and their covered de p e n d e n ts that, despite the defendants’ announcement th a t the lifetime cap would no long er apply to the Employ ee Plan, the defendants intended that the lifetime max imum still apply to the Retiree Plan. Therefore, we reverse the district court’s order g ranting
summary judg ment to UPS and the Retiree Plan on the breach of fiduciary

duty claims.

B. Blue Cross

Th e plaintiff nex t arg ues that issues of material fact preclude summary judg ment on the breach of fiduc iary duty claim ag ainst th e cl a i ms administrator B lue Cross. B lue Cross responds that : (1) it d oes not qualify as an ERI SA fiduciary ; and (2) it did not “provide inaccurate or misleading information reg arding the terms of Mrs. King ’s benefit plan.” The district court ruled tha t Bl ue Cross is not an ERI SAK I N G V

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U E C R O S S A N D B L U E S H I E L D 30

fiduciary a

nd that B lue Cross did not make any misrepresentations to the plaintiff. W e respectfully disag ree.

1. Fiduciary Status

As relevant here, ERI SA defines a “fiduciary with respect to a plan” to include a person who “ex ercises any discretionary a

u thority o r discretionary control respecting
manag ement of such plan” or “has any discretionary authority

or discretionary responsibility in the administration of s u ch plan.” 29 U.S.C. § 1 002(21)(A). The Department of L abor’s “questions and answers ” relating to fiduciary responsibility under ERI SA ex plain that ag ents or employ ees who perform “purely ministerial function s ” d o not qualify as fiduciaries, 29 C.F .R. § 2509.75-8, at D-2; neither do ag ents “whose sole function is to c alculate the amount of benefits to which each plan participant is entitled in accordance with a mathematical formula,” id. at D -3. On the o ther end of th e s p ectrum, an ag ent “who has the final a uthority to auth o r i z e or disallow benefit p ay

ments in cases w here a dispute e x ists” is a fiduciary

. I

d. B lue Cross arg ues that it is not a fiduciary because the SPD states that UPS has “the ex clusive rig ht a nd discretion to interpret the terms a n d conditions of the Plan,” UPS only deleg ated “administrative duties” t o B lue Cross, and UPS r etained the authority to d ecide some appeals. This
arg ument re s t s on a misunderstanding o f the fiduciary desig nation under ERI SA.

I n Kyle Railways, Inc. v

. Pacific Administration Services, Inc.
, 990 F .2d 513, 517 (9th Cir. 1993), we held that benefit plan insurers are not f

iduciaries “unless they are g iven the discretion to manag e p lan assets o r to d etermine claims made
ag ainst the p lan.” W e cautioned that we do not “nar r o wly interpret the phrase ‘discretion

. . . to determine claims.’” Id.K I N G V

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U E C R O S S A N D B L U E S H I E L D 31

“ W hile the mere provision of contractual benefits does no t make an i n s u r ance company a fiduciary under E RI SA, an insurer w i l l b e found to be an ERI SA fiduciary if it h as the authority to g rant, deny

, or review d enied claims.” I d. at 518 (internal c itations omitted). A p l a n’s characteriz ation of a claim administrator’s duties as “ministerial” is not determinative: we look past the plan’s characteriz ation to determine what duties the administrator actually p e rf o rms. See IT Corp. v. Gen. Am. Life I n s

. Co.
, 107 F .3d 1415, 1419–20 (9th Cir. 1997).

B lue Cross processes and pay s claims to plan participants and conducts the firs t

- level appeal for b enefit d enials. Althoug h the CRC conducts the second-level a ppeal, B lue Cross makes initial be n e f it determinations f

or a ll p lan participants and makes fina l d e terminations for those participants who do not appeal their claims to the CRC. This requires that B lue Cross interpret the R et i r ee Plan to d e t ermine whether to pay claims and whether to uphold benefit denials on a

p peal. See id

. at 142 0

. I n short, B lue Cross has the authority to g rant, deny

, a n d r e view denied claims. Any one of these a b ilities w o u l d be sufficient to confer fiduciary status under E R I SA. See Kyle

, 990 F .2d at 518. T he district court erred by ruling that B lue Cross is not an ERI SA fiduciary

.

2. Misrepresentations

The plaintiff arg ues that B lue Cross misled Mrs. King with resp e c t t o whether her plan h ad a lifetime benefit cap and when she reached the benefit limit. B lue Cross responds that all the information it provided to Mrs. King was correct

a n d a ccurate. The district court ruled that “there i s n o evidenc e that B lue Cross made any misrepresentations toK I N G V

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U E C R O S S A N D B L U E S H I E L D 32

Plaintiff a

bout the plan terms.” Ag ain, w e r espectfully disag ree.

Ba sed on the current record, we conclude that ther e i s a g enuine dispute of mater i al f a ct a bout whether B lue Cross misled Mrs. King

. W e note, howe v e r , t h at there are key pieces of evidence missing f ro m the record on both sides. The plaintiff points to the series of approval letters that Mrs. King received from B lue Cros s certify ing her treatment a s “medically necessary ,” Mrs. K ing ’s phone call with a B lue Cross representative d

uring the last week of J anuary , in which the representative said that she was $10,000 a w ay f rom the lifetime max imum, and the March 14, 2013 letter stating that Mrs. Kin g reached her lifetime max imum on J anuary 1, 2013. 1 0 A lthoug h the app r o val letters all contained a disclaimer that they were “not a g uarantee of pay ment o f benefits,” they did n ot mention the lifetime benefit max imum. The letters stated that pay ment was subject to any limitations in the SPD, but, as discussed, the 20 1 0 S u m mary o f Modifications was a mbig u ous with respect to whe t h e r the lifetime benefit max imum applied to the Retiree Plan.

B lue Cross arg ues that the representative Mrs. K ing spoke
to in late J anuary “would only hav e i n formation concerning cl a ims that had b een submitted and adjudicated in the ordinary cou r s e of business at the time of the call.” Thus, according to B lue Cross, the representative did not falsely

10 In h er letter to B lu e Cro ss o n March 1 4
, 2 0 1 3
, Mrs. Kin g also stated th at t h e d ef en d an ts assu

red h er h u sb an d th at h er b en ef its h ad n o lim it an d th at sh e “ w as reassu red th is w as t h e case at least w eek ly b y case m an ag ers

w h o sp o k e w ith B lu e Cro s s.” T h e l etter d o es n o t sp ecif y w h i ch d ef en d an t

m ad e th ese assu

ran ces, an d th e reco rd do es n o t o th erw i se in d icate w h eth er it w as B lu e Cro ss, UP S, o r th e Retiree P lan

.K I N G V

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U E C R O S S A N D B L U E S H I E L D 33

represent that Mrs. King was $10,000 a way from the lifetime l i mit at the end of J anuary

. B u t B lue Cross does n o t c i t e t o

a ny evidence in the record with respect to what claims h a d b e en received or adjudicated at that point in time

. T h e

ex p lanation of benefits B lue Cross sent Mrs. King on F ebruary 19, 2013 stated that her benefit c l ai m s from November 2012 wer e denied because she had ex ceeded the lifetime max imum, while t h e M arch 1 4, 2013 letter B lue Cross sent to Mrs. K ing stated that s h e reached the limit on J anuary 1
, 2013. A reasonable juror c ould conclude that B lue Cross made misrepresentatio ns to Mrs. King about the lifetime benefit max imum. Therefore, the district court erred by g ranting summary j u dg ment to B lue Cross on the breach of fiduciary

duty claim.

IV. Rem edy

I n the F irst Amended Complaint, Mrs. King soug ht relief

u n d e r E R I S A s e c t i o n s 5 0 2 ( a ) ( 1 ) ( B ) a n d ( a ) ( 3 )

. Section 502(a)(1)(B ) provides for a civil a c t i o n “to r ecover benefits d ue

. . . under the terms of [ the] plan,” while section 502(a)(3) provides for “equitable r e lief” to redress ERI SA violations. 29 U.S.C. § 1132(a)(1) ( B)

, ( a ) (3). Mrs. King orig inally arg ued that she w as e n titled to relief p rimarily because the Affordable Care Act amended ERI SA to require the defendants to lift the lifet ime benefit max imum in the Retiree Plan. As discussed above, this arg ument fails.

On appeal

, it is unclear whether Mr. King seeks relief under section 502(a)(1)(B ), section 502(a) (3 ), or both. B ecause the district court gr a nted summary judg ment to the defendants, it did not address the appropriate remedy for this violation, and we d e c l i n e to do so in the first instance. On remand, after the plaintiff spec i f i e s w hether he still seeksK I N G V

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U E C R O S S A N D B L U E S H I E L D 34

relief under ERI SA section 502(a)(1)(B )

, what ty p e o f equitable remedy he seeks under section 502(a)(3), and why

, the district court should determine the appropriate remedy

.

CONCLUSION

The plaintiff’s arg

ument that ERI SA, as amended by the Afford a b l e Care Act, requires the defendants to lift the lifetime benefit max imum in the Retiree Plan fails. However, the SPD, as amended by the 2010 Summary of Modifications, violates ERI SA’s statutory a n d reg ulatory disclosure

r e quirements, and the d istrict court erred by g r anti n g summary judg ment to the defendants on the breac h o f fiduciary du ty claims. We therefore reverse the order
g ranting summary judg ment to the defendants and remand to the district court f

or proceeding s consistent with this opinion.

REVERSED and REMANDED.427