FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GARY KING, as personal

representative of Linda King,

Plaintiff-Appellant,

v.

BLUE CROSS AND BLUE SHIELD OF

ILLINOIS; UNITED PARCEL SERVICE

OF AMERICA, INC.; UPS HEALTH

AND WELFARE PLAN FOR RETIRED

EMPLOYEES; DOES, 1 through 10,

Defendants-Appellees.

No. 15-55880

D.C. No.

3:13-cv-01254-

CAB-JMA

OPINION

Appeal from the United States District Court

for the Southern District of California

Cathy Ann Bencivengo, District Judge, Presiding

Argued and Submitted March 9, 2017

Pasadena, California

Filed September 8, 2017

Before: Richard A. Paez, Marsha S. Berzon,

and Morgan Christen, Circuit Judges.

Opinion by Judge Christen
2 KING V. BLUE CROSS AND BLUE SHIELD

SUMMARY*

Employee Retirement Income Security Act

The panel reversed the district court’s grant of summary

judgment in favor of the defendants in an ERISA action

regarding the denial of a welfare benefit plan participant’s

claim for medical benefits on the basis of the plan’s lifetime

benefit maximum.

The panel held that ERISA, as amended by the Patient

Protection and Affordable Care Act, does not ban lifetime

benefit maximums for certain retiree-only plans.

The panel held that the defendants violated ERISA’s

statutoryand regulatory disclosure requirements byproviding

a faulty summary of material modifications describing

changes to the lifetime benefit maximum. The panel

concluded that the summary did not reasonably apprise the

average plan participant that the lifetime benefit maximum

continued to apply to the retiree plan.

The panel also held that genuine disputes of material fact

precluded summary judgment on claims of breach of

fiduciary duty in the failure to comply with ERISA’s

disclosure requirements. The panel held that a defendant

claims administrator was a fiduciary because it had authority

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
KING V. BLUE CROSS AND BLUE SHIELD 3

to grant, deny, and review benefits claims, and there was a

genuine dispute of material fact about whether this defendant

misled the ERISA plan participant.

The panel remanded the case to the district court.

COUNSEL

Patrick A. Calhoon (argued) and Craig A. Miller, Law

Offices of Craig A. Miller, San Diego, California, for

Plaintiff-Appellant.

Eileen R. Ridley (argued) and Alan R. Ouellette, Foley &

Lardner LLP San Francisco, California, for DefendantAppellee Blue Cross and Blue Shield of Illinois.

John Timothy McDonald (argued) and Sedric D. Bailey,

Thompson Hine LLP, Atlanta, Georgia, for DefendantsAppellees United Parcel Service of America, Inc., and UPS

Health and Welfare Plan for Retired Employees.
4 KING V. BLUE CROSS AND BLUE SHIELD

OPINION

CHRISTEN, Circuit Judge:

Linda King participated in a welfare benefit plan that the

defendants sponsored and administered. In November 2012,

Mrs. King suffered a back infection that required immediate

surgery and extensive post-surgery rehabilitative care. After

initially approving her treatment as medically necessary, the

defendants denied her claim for benefits because Mrs. King

exceeded her plan’s $500,000 lifetime benefit maximum.

Mrs. King filed suit against the defendants—Blue Cross

and Blue Shield of Illinois, United Parcel Service of America,

Inc. (UPS), the UPS Health and Welfare Plan for Retired

Employees, and Does 1 through 10—under the Employment

Retirement Income Security Act of 1974 (ERISA). She

sought declaratory relief and alleged breach of contract and

breach of fiduciary duties. Mrs. King passed away while her

suit was pending before the district court and Mr. King was

substituted as the representative of her estate. In response to

the defendants’ motions for summary judgment, Mr. King

argued that the defendants failed to adequately disclose that

the lifetime benefit maximum applied to the plan. The

district court granted summary judgment to the defendants,

and Mr. King appeals.

We hold: (1) that ERISA, as amended by the Affordable

Care Act, does not ban lifetime benefit maximums for certain

retiree-only plans; (2) that the defendants violated ERISA’s

statutoryand regulatory disclosure requirements byproviding

a faulty summary of material modifications describing

changes to the lifetime benefit maximum in September 2010;

and (3) that genuine disputes of material fact preclude
KING V. BLUE CROSS AND BLUE SHIELD 5

summary judgment on the breach of fiduciary duty claims. 

Accordingly, we reverse the district court’s order granting

summary judgment.

BACKGROUND

I. The UPS Health and Welfare Package for Retired

Employees

UPS administers two employee welfare benefit plans

governed by ERISA: (1) the UPS Health and Welfare

Package for active employees (the Employee Plan); and

(2) the UPS Health and Welfare Package for Retired

Employees (the Retiree Plan). UPS is the Plan Administrator

and Plan Sponsor. Blue Cross is a claims administrator for

medical coverage under the plans.

Mrs. King became a participant in the self-funded Retiree

Plan as a covered dependent when her husband retired from

UPS in March 2011. The Retiree Plan offers medical, dental,

and vision coverage for eligible retired employees, their

spouses, and their dependent children. Coverage under the

Retiree Plan begins at retirement and ends when the retiree or

covered dependent turns sixty-five and becomes eligible for

Medicare.

A. The Summary Plan Description

The Retiree Plan’s substantive benefit provisions are

explained in the Summary Plan Description (SPD), which the

Retiree Plan Document incorporates by reference. The SPD

governs both the Employee Plan and the Retiree Plan, and is

comprised of two parts: (1) the 2006 SPD and (2) a series of

summaries of material modifications describing amendments
6 KING V. BLUE CROSS AND BLUE SHIELD

to the plans that have been adopted since 2006.1 The 2006

SPD is ninety-six pages and has nineteen sections on topics

such as “If a Claim is Denied,” “Retired Employee Health

Care Coverage,” and “ERISA and Other Important

Information.” The table of contents lists the nineteen

sections, but does not refer to any of the amendments that

appear in the summaries of material modifications.

UPS issued twelve such summaries between May 2006

and December 2012. Each summary indicates the month and

year it was issued and whether it modifies one or both of the

plans. UPS instructs plan participants to keep the summaries

with the 2006 SPD for future reference. The summaries vary

between one and four pages in length, and total twenty-five

pages all together. They are not cumulative; each summary

of material modifications describes only newly announced

amendments. Thus, to determine the current language for

each benefit provision, a plan participant must read the

relevant section from the 2006 SPD and then read all twelve

summaries of the plan modifications.

B. The Lifetime Benefit Maximum

The Employee Plan and Retiree Plan originally contained

different lifetime benefit caps on medical coverage. The

2006 SPD section titled “Retired Employee Health Care

Coverage” explains: “There is a new lifetime maximum that

begins when you retire and become eligible for benefits from

the UPS Health and Welfare Package for Retired

1 ERISA requires plan administrators to provide beneficiaries with

both a summary plan description and summaries of any material

modifications made to the plan. See 29 U.S.C. §§ 1022(a), 1024(b)(1).
KING V. BLUE CROSS AND BLUE SHIELD 7

Employees.” On the next page, under the subheading “The

Lifetime Benefit Maximum,” the SPD states:

Up to $500,000 in lifetime medical benefits

(unlimited in HMO Option) can be paid for

each person participating in the UPS Health

and Welfare Package for Retired Employees. 

Only benefits paid while you receive coverage

as a retired employee count toward the

$500,000 total. . . . Each January, up to

$1,000 in individual benefits paid during the

preceding year will automatically be restored.

In an earlier section titled “Medical,” the SPD explains that

the Employee Plan has a $1 million lifetime maximum. In

September 2010, however, UPS issued a summaryof material

modifications (the 2010 Summary of Modifications) that

eliminated the Employee Plan’s lifetime benefit cap in

response to the Patient Protection and Affordable Care Act

(the Affordable Care Act). The 2010 Summary of

Modifications provided that this amendment would become

effective on January1, 2011. The parties dispute whether this

modification also applies to the Retiree Plan.

C. The 2010 Summary of Modifications2

The 2010 Summary of Modifications included

amendments to both the Employee Plan and the Retiree Plan. 

At the top of the first page, the 2010 Summary of

Modifications states, in italicized font:

2 See the Appendix for a copy ofthe 2010 Summary of Modifications.
8 KING V. BLUE CROSS AND BLUE SHIELD

This notice details Plan improvements,

changes, clarifications, and required

notifications effective January 1, 2011, unless

otherwise noted. Items noted with an asterisk

(*) do not apply to retirees or their covered

dependents. You should keep this with your

UPS Health and Welfare Package and UPS

Health and Welfare Package for Retired

Employees Summary Plan Description for

future reference.

Directly under this text, the page divides into two columns. 

At the top of the column on the left-hand side of the page,

there is a single-spaced paragraph of text titled “Health Care

Reform*” in bold. Below the title, this paragraph states:

In March, President Obama signed into law

the Patient Protection and Affordable Care

Act (PPACA), also known as “health care

reform.” Effective January 1, 2011, PPACA

requires the following changes to your UPSadministered health care plan. If the PPACA

provisions requiring these Plan changes are

ever repealed, the changes made solely as a

result of PPACA will be terminated and the

provisions of the Plan modified by PPACA

will be reinstated effective the date the law is

repealed.

Immediately below this paragraph is another bold heading,

which states “Grandfather Plan Status,” followed by two

paragraphs of single-spaced text. After these two paragraphs,

there is a third bold heading in the left column, which states

“Dependent Children Under Age 26,” followed by five
KING V. BLUE CROSS AND BLUE SHIELD 9

paragraphs of single-spaced text. The text under this heading

continues from the bottom of the column on the left-hand side

of the first page to the column on the right-hand side of the

first page, and onto the second page. On the second page,

approximately one-third of the way down the left column,

there is a fourth bold heading, which states “Elimination of

Lifetime Maximum Benefits.” This section contains one

paragraph of single-spaced text:

Lifetime dollar limits on aggregate benefits

will be eliminated from your Plan effective

January 1, 2011. If you are an otherwise

eligible employee whose coverage previously

ended upon reaching your lifetime maximum

benefit under the Plan, you will have 30 days,

beginning the first day of the annual

enrollment period, to re-enroll in the Plan. If

you choose to enroll, your coverage is

effective January 1, 2011 (as long as you

continue to meet the Plan’s eligibility

requirements). You may also enroll any

dependents whose coverage ended upon

reaching their lifetime maximum.

Upon very close inspection, one can discern that the “Health

Care Reform*” heading at the top of the first page is in a

different font type than the three headings that follow,

including “Elimination of Lifetime Maximum Benefits.” 

According to the defendants, the “Health Care Reform*”

heading is in Arial font, while the other headings are in Times

New Roman, and the Arial heading is in a larger font size. 

The differences in font type and size are difficult to discern.
10 KING V. BLUE CROSS AND BLUE SHIELD

After the “Elimination of Lifetime Maximum Benefits”

section, the 2010 Summary of Modifications has three more

bold headings in Times New Roman font with corresponding

paragraphs of text. This text wraps from the column on the

left-hand side of the second page into the column on the

right-hand side. One-third of the way down the right column,

there is another bold heading in Arial font: “Mental Health

Parity.” This heading is followed by two more bold headings

in Times New Roman font on the second page. On the third

page, there are three bold headings in Arial font. None of the

other headings in the 2010 Summaryof Modifications besides

“Health Care Reform*” contains an asterisk.

II. Plan Administration and Claim Appeals Process

The 2006 SPD grants UPS as Plan Administrator “the

exclusive right and discretion to interpret the terms and

conditions of the Plan, and to decide all matters arising in its

administration and operation, including questions of fact and

issues pertaining to eligibility for, and the amount of, benefits

to be paid by the Plans.”3 The 2006 SPD nonetheless

authorizes UPS “to delegate its administrative duties to one

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

more outside administrative services providers.” It elaborates

that “[p]resently, certain administrative services with regard

to the processing of claims and the payment of benefits are

provided under contract,” including a contract with Blue

3 The SPD further states: “Any such interpretation or decision shall,

subject to the claims procedure described herein, be conclusive and

binding on all interested persons, and shall, consistent with the Plans’

terms and conditions, be applied in a uniform manner to all similarly

situated participants and their covered dependents. The Plan

Administrator may delegate certain discretionary authority to one or more

committees.”
KING V. BLUE CROSS AND BLUE SHIELD 11

Cross to administer medical coverage for some plan

participants.

The 2006 SPD describes a two-level appeals process for

denied benefit claims. Upon receiving written notice from

the claims administrator that a claim is denied, the participant

has 180 days to file a first-level appeal with the claims

administrator (i.e., Blue Cross). If the claims administrator

denies the claim again, the participant has 60 days to file a

second-level appeal with the UPS Claims Review Committee

(CRC). UPS delegated its discretion to interpret the plan to

the CRC.

III. Linda King’s Medical Claim

In the fall of 2012, Linda King suffered an infection that

caused the destruction of several vertebrae and necessitated

immediate back surgery and extensive rehabilitative care. 

The record reflects that Mrs. King or her care providers

reached out to Blue Cross to obtain precertification for her

treatment starting in November 2012. The 2006 SPD

describes “precertification” as a process to ensure that

hospital stays, convalescent facility stays, home health care

services, and hospice services are “medically necessary and

appropriate.” Plan participants and their treating physicians

are notified by mail of the certification decision and

participants are charged a $250 fee for the failure to

precertify, but the 2006 SPD does not warn that even if a plan

participant obtains precertification, the plan or claims

administrator may still deny benefit claims for other reasons.

The record contains a series of letters from Blue Cross to

Mrs. King dated between November 28, 2012 and February

11, 2013. The letters approve medical care at several
12 KING V. BLUE CROSS AND BLUE SHIELD

hospitals and other facilities provided between November 7,

2012 and March 13, 2013. The letters all state that they are

“in response to a request for service(s)/procedure(s),” and

certify specific treatment as “medically necessary.” The

dates on the letters indicate that in some cases the letters were

sent after the approved care occurred. All the letters contain

the following qualification:

Approval through the Health Care

Management Department is not a guarantee of

payment of benefits. Payment of benefits is

subject to several factors, including, but not

limited to, eligibility at the time of service,

payment of premiums/contributions, amounts

allowable for services, supporting medical

documentation and other terms, conditions,

limitations and exclusions set forth in your . . .

Summary Plan Description . . . . For

questions regarding benefits, please contact

the Customer Service unit at the telephone

number listed on the back of your health

insurance card. You remain responsible for

anyout-of-pocketrequirements, including, but

not limited to, coinsurance, copayments,

deductibles and/or non-covered charges.

On February 19, 2013, Blue Cross sent Mrs. King an

explanation of benefits stating that only $133,601.41 of

$949,755 billed for medical care was covered by her plan

because she had reached the lifetime benefit maximum. The

explanation of benefits stated that Mrs. King may owe

Scripps Memorial Hospital $578,551.34 for care provided
KING V. BLUE CROSS AND BLUE SHIELD 13

between November 2–28, 2012.4 Because the February 19

explanation of benefits indicated that Mrs. King reached her

plan’s lifetime benefit maximum in November 2012, it also

suggested that the plan would not cover the cost of care that

had already been provided between December 2012 and

February 2013.

In response, Mrs. King sent a letter to the Blue Cross

Claims Review Section on March 14, 2013. The letter

explained: (1) the explanation of benefits was the first written

notice Mrs. King received that her health insurance would not

cover all 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 Blue Cross

representative about an unrelated issue during the last week

of January2013 in which the representative mentioned for the

first time that she was only $10,000 away from the lifetime

maximum; (4) after this conversation, Mrs. King immediately

purchased health insurance through her employment,

effective February 1, 2013; and (5) Mrs. King discharged

herself from a rehabilitation facility against medical advice

on February 9, 2013 out of concern that the care she received

would not be covered by the Retiree Plan. Mrs. King asked

4 The explanation of benefits does not explain the discrepancy

between the $816,153.59 in charges for care not covered by the plan and

the $578,551.34 that Mrs. King may owe her provider.

5 The letter does not specify which defendants assured Mrs. King and

her husband that her benefits had no limit. The letter states: “Both Blue

Cross and UPS have mislead [sic] us. My husband was assured that our

health benefits had no limit. I was reassured this was the case at least

weekly by case managers who spoke with Blue Cross.” Mrs. King passed

away in December 2014, and there is no declaration from her in the

record. Mr. King’s declaration does not mention these assurances.
14 KING V. BLUE CROSS AND BLUE SHIELD

Blue Cross to “review these facts and advise of your

decision.” Also on March 14, 2013, Blue Cross sent another

letter to Mrs. King announcing that she had reached the

lifetime maximum, but this letter informed her that the limit

was reached on January 1, 2013.

IV. The Instant Litigation

On May 30, 2013, Mrs. King filed suit against the

defendants under sections 502(a)(1)(B) and 502(a)(3) of

ERISA. See 29 U.S.C. § 1132(a)(1)(B), (a)(3). On June 3,

2013, Mrs. King’s counsel sent a letter to the CRC stating

that UPS had wrongfully imposed the $500,000 lifetime

benefit maximum, noting that Blue Cross did not respond to

Mrs. King’s first-level appeal, and including a copy of her

March 14 letter and the district court complaint. The letter

asked that UPS “immediately reconsider” its decision to

impose the lifetime benefit maximum. On July 10, 2013,

Blue Cross denied the first-level appeal, concluding that the

lifetime benefit cap applied to the Retiree Plan.

Mrs. King filed a first amended complaint on September

9, 2013. In it, she sought declaratory relief and alleged that

the defendants breached the Retiree Plan contract and their

fiduciary duties in violation of ERISA. The defendants

moved to dismiss, arguing that the 2010 Summary of

Modifications did not eliminate the lifetime benefit maximum

in the Retiree Plan.

The district court denied the motion to dismiss. It ruled

that the 2010 Summary of Modifications was ambiguous as

to whether the Retiree Plan was subject to a lifetime benefit

maximum, that both parties’ interpretations of the 2010

Summary of Modifications were “reasonable,” and that “the
KING V. BLUE CROSS AND BLUE SHIELD 15

distinction in font type without more, such as indentation of

the subheadings, numbering, or different sized text may not

even alert the average plan participant that the Arial headings

are ‘major headings’ and that the Times New Roman

headings are subheadings within each major heading.”

Subsequently, the CRC notified Mrs. King that the

second-level review of her claim was “not favorable.” The

CRC emphasized the italicized disclaimer at the top of the

2010 Summary of Modifications’ first page, which states,

“Items noted with an asterisk (*) do not apply to retirees or

their covered dependents.” The CRC reasoned that the word

“items” does not mean “paragraphs,” suggesting that the

asterisk after the “Health Care Reform*” heading refers to

more than just the one paragraph immediately below the

heading.

The CRC also stressed that the sole paragraph under the

“Health Care Reform*” heading states that the Affordable

Care Act “requires the following changes to your UPSadministered health care plan.” The CRC reasoned that

because there are no changes contained in that paragraph

itself, the heading must refer to paragraphs that follow. The

CRC noted that all the subsequent paragraphs describe

required changes under the Affordable Care Act until the

“Mental Health Parity” heading on the second page, and

concluded that because the “Health Care Reform*” and

“Mental Health Parity” headings are in a different font type

and size, all the text between these headings constitutes a

single “item.” Under the CRC’s interpretation, the

“Elimination of Lifetime Maximum Benefits” paragraph is

part of the larger “Health Care Reform*” item and the

asterisk indicates that the elimination of lifetime benefit
16 KING V. BLUE CROSS AND BLUE SHIELD

maximums does not apply to retirees or their covered

dependents.

On October 23, 2014, the defendants moved for summary

judgment. Roughly two months later, Mrs. King passed away

and Mr. King was substituted as the representative of Mrs.

King’s estate. The district court thereafter granted summary

judgment to the defendants, ruling that: (1) the plan

administrator did not abuse its discretion by interpreting the

Retiree Plan to include a lifetime benefit maximum; (2) the

reasonable expectations doctrine does not apply to selffunded welfare benefit plans; (3) the Affordable Care Act did

not amend ERISA to ban lifetime benefit caps for retiree-only

plans; and (4) the defendants did not breach their fiduciary

duties to Mrs. King. The district court did not address Mr.

King’s argument that the 2010 Summary of Modifications

violates ERISA’s disclosure requirements. Mr. King timely

appealed.

STANDARDS OF REVIEW

“We review de novo a district court’s grant of summary

judgment.” Spinedex Physical Therapy USA Inc. v. United

Healthcare of Ariz., Inc., 770 F.3d 1282, 1288 (9th Cir.

2014). “The interpretation of a federal statute . . . is a

question of law, and we review it de novo.” Arnold v. Arrow

Transp. Co. of Del., 926 F.2d 782, 785 (9th Cir. 1991). With

respect to the breach of fiduciary duty claims, the court “must

determine, viewing the evidence in the light most favorable

to the nonmoving party, whether there are any genuine issues

of material fact and whether the district court correctly

applied the relevant substantive law.” Farr v. U.S. W.

Commc’ns, Inc., 151 F.3d 908, 913–14 (9th Cir. 1998).
KING V. BLUE CROSS AND BLUE SHIELD 17

DISCUSSION

I. ERISA’s Ban on Lifetime Benefit Maximums

We first consider whether ERISA, as amended by the

Affordable Care Act, bans lifetime benefit maximums in

retiree-only plans for if it does, there would be no need to

reach plaintiff’s other claims. We conclude that it does not.

The Affordable Care Act amended both the Public Health

Service Act (PHSA) and ERISA. The amendment to the

PHSA states, in relevant part: “A group health plan and a

health insurance issuer offering group or individual health

insurance coverage may not establish . . . lifetime limits on

the dollar value of benefits for any participant or

beneficiary. . . .” 42 U.S.C. § 300gg-11(a)(1). The

Affordable Care Act added a clause to ERISA that states,

subject to exceptions not relevant here, “[T]he provisions of

part A of title XXVII of the Public Health Service Act (as

amended by the Patient Protection and Affordable Care Act)

shall apply to group health plans, and health insurance issuers

providing health insurance coverage in connection with group

health plans, as if included in this subpart. . . .” 29 U.S.C.

§ 1185d(a)(1) (emphasis supplied). These provisions include

the ban on lifetime benefit limits. Read in isolation, this

suggests that the Affordable Care Act incorporated the

PHSA’s ban on lifetime benefit limits into ERISA.

Section 732 of ERISA, however, creates an exception for

certain retiree-onlyplans. This exception, which predates the

Affordable Care Act, states: “The requirements of this part

(other than section 1185 of this title) shall not apply to any

group health plan (and group health insurance coverage

offered in connection with a group health plan) for any plan
18 KING V. BLUE CROSS AND BLUE SHIELD

year if, on the first day of such plan year, such plan has less

than 2 participants who are current employees.” 29 U.S.C.

§ 1191a(a). The parties do not dispute that the Retiree Plan

at issue is such a plan.

The plaintiff argues, however, that this ERISA exception

has been 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 exception

for certain retiree-only plans. Pub. L. No. 110-2, 121 Stat. 4.

The Supreme Court “has repeatedly stated . . . that absent

a clearly expressed congressional intention, repeals by

implication are not favored.” Branch v. Smith, 538 U.S. 254,

273 (2003) (citations omitted) (internal quotation marks

omitted). “An implied repeal will only be found where

provisions in two statutes are in ‘irreconcilable conflict,’ or

where the latter Act covers the whole subject of the earlier

one and ‘is clearly intended as a substitute.’” Id.

Irreconcilable conflict occurs if “there is a positive

repugnancy” between competing provisions or if those

provisions cannot “mutually co-exist.” Radzanower v.

Touche Ross & 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-existence, it is the duty of the courts

. . . to regard each as effective.” Id.

The plaintiff submits that there is an “irreconcilable

conflict” between the ban on lifetime benefit limits in the

PHSA and the exception for retiree plans in ERISA. But “[i]t

is not enough to show that the two statutes produce differing

results when applied to the same factual situation, for that no

more than states the problem.” Id. Courts “ha[ve] not

hesitated to give effect to two statutes that overlap, so long as
KING V. BLUE CROSS AND BLUE SHIELD 19

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

Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 144 (2001);

Randolph v. IMBS, Inc., 368 F.3d 726, 731 (7th Cir. 2004)

(“Whether overlapping and not entirely congruent remedial

systems can coexist is a question with a long history at the

Supreme Court, and an established answer: yes.”). Although

the plaintiff suggests—in a footnote in his opening

brief—that the Affordable Care Act has all but eliminated the

distinction between ERISA and non-ERISA plans, ERISA

and the PHSA are not co-extensive in scope. For example,

ERISA, unlike the PHSA, exempts governmental plans from

many of its mandates. Compare 29 U.S.C. §§ 1002(32),

1003(b)(1), with 42 U.S.C. § 300gg-21(a)(1). Moreover, the

plaintiff has not shown that it is impossible for sponsors,

issuers, or administrators to conform to the requirements of

both ERISA and the PHSA. See Randolph, 368 F.3d at 731

(“Overlapping statutes do not repeal one another by

implication; as long as people can comply with both, then

courts can enforce both.”). Thus, we cannot say that the ban

on lifetime benefit limits in the PHSA and the exception for

certain retiree-only plans in ERISA are in irreconcilable

conflict, nor conclude that the ERISA exception was

impliedly repealed by the Affordable Care Act.

The district court did not err in ruling that ERISA’s ban

on lifetime benefit maximums does not apply to the Retiree

Plan.6

6 The Complaint and the First Amended Complaint broadly alleged

that the lifetime benefit limit in the Retirement Plan was lifted by the

Affordable Care Act and prayed for declaratory relief as well as relief

under ERISA. Since the plaintiff’s challenge did not arise under the

PHSA, the district court did not rule on, among other things, whether the

PHSA bans lifetime benefit limits in certain retiree-only plans. We

accordingly offer no opinion as to the merits of such a claim.
20 KING V. BLUE CROSS AND BLUE SHIELD

II. ERISA’s Disclosure Requirements

The plaintiff contends that the SPD, as amended by the

2010 Summary of Modifications, violates ERISA’s statutory

and regulatory disclosure requirements because it does not

reasonably apprise the average plan participant that the

lifetime benefit maximum continues to apply to the Retiree

Plan. We agree.

“ERISA’s central policy goal is to protect benefit plan

participants ‘by requiring the disclosure and reporting to

participants and beneficiaries of financial and other

information . . . and by providing for appropriate remedies,

sanctions, and ready access to the Federal courts.’” Scharff

v. Raytheon Co. Short Term Disability Plan, 581 F.3d 899,

904 (9th Cir. 2009) (alteration in original) (quoting 29 U.S.C.

§ 1001(b)). To further this goal, ERISA requires that benefit

plans provide participants with a SPD and a “summary of any

material modification in the terms of the plan.” See

29 U.S.C. § 1022(a).

The SPD and any summaries of material modifications

must “be written in a manner calculated to be understood by

the average plan participant.” Id. The SPD must also “be

sufficientlyaccurate and comprehensive to reasonablyapprise

such participants and beneficiaries of their rights and

obligations under the plan.” Id. ERISA requires in particular

that the SPD include any “circumstances which may result in

disqualification, ineligibility, or denial or loss of benefits.” 

Id. § 1022(b). This court summarized the combined effect of

these requirements in Scharff as:

[T]he SPD must explain the “circumstances

which may result in disqualification,
KING V. BLUE CROSS AND BLUE SHIELD 21

ineligibility, or denial or loss of benefits” in a

manner “calculated to be understood by the

average plan participant,” and that

information must be “sufficientlyaccurate and

comprehensive to reasonably apprise” plan

participants of their rights and obligations

under the plan.

581 F.3d at 904 (quoting 29 U.S.C. § 1022(a)–(b)).

Federal regulations provide further detail on how to fulfill

ERISA’s disclosure requirements:

The format of the summary plan description

must not have the effect to [sic] misleading,

misinforming or failing to inform participants

and beneficiaries. Any description of

exception, limitations, reductions, and other

restrictions of plan benefits shall not be

minimized, rendered obscure or otherwise

made to appear unimportant. Such

exceptions, limitations, reductions, or

restrictions of plan benefits shall be described

or summarized in a manner not less prominent

than the style, captions, printing type, and

prominence used to describe or summarize

plan benefits. . . . The description or

summary of restrictive plan provisions need

not be disclosed in the summary plan

description in close conjunction with the

description or summary of benefits, provided
22 KING V. BLUE CROSS AND BLUE SHIELD

that adjacent to the benefit description the

page 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 proposition that benefit limitations are unenforceable if

they violate ERISA’s statutory and regulatory disclosure

requirements. In Spinedex, we held that limitation provisions

in two plans were unenforceable because they “were not

properly disclosed in the SPDs.” Id. at 1294. The provisions

were two-year limitations periods for filing suit to challenge

the denial of benefit claims under the plans at issue. Id. at

1295. The limitations periods were “buried deep” in the

SPDs, and were “not in ‘close conjunction’ to benefits

provisions.” Id. Spinedex further noted that there was no

“reference, adjacent to the benefits description, to the page

number on which the ‘Limitation of Action’ provision

appears.” Id.

Spinedex explained that this court employs “a ‘reasonable

plan participant’ standard” to analyze the disclosure

requirements in 29 C.F.R. § 2520.102-2(b), and concluded

that, under this standard, the court does not “require a plan

beneficiary to read every provision of an SPD in order to

ensure that he or she did not miss a limitation provision,”

because “[s]uch a requirement is what the regulation is

specifically designed to avoid.” 770 F.3d at 1295, 1296. The

court held that the limitations periods in the Spinedex plans

were unenforceable because they “were not disclosed in

compliance with 29 C.F.R. § 2520.102-2(b).” Id.
KING V. BLUE CROSS AND BLUE SHIELD 23

The 2010 Summary of Modifications amending the SPD

that governs Mrs. King’s claim likewise does not satisfy

ERISA’s disclosure requirements because, at bottom, the

document was not “written in a manner calculated to be

understood by the average plan participant.” 29 U.S.C.

§ 1022(a).

First, rather than issue an amended SPD, or even

cumulative summaries of material modifications, UPS

announced plan amendments in a series of summaries, all of

which must be read in conjunction with the 2006 SPD to

determine available benefits.7 The format used by UPS

required plan participants to first read the 2006 SPD section

titled “Retired Employee Health Care Coverage,” where one

would learn about the lifetime benefit maximum. Next, the

participants would have to read all twenty-five pages of the

summaries of material modifications to determine whether

any amendments modified the lifetime maximum. There is

no comprehensive table of contents that allows participants to

verify which SPD terms have 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, and

the summaries do not consistently cross-reference the 2006

SPD. Notably, the 2010 Summary of Modifications does not

cross-reference the Retiree Plan’s lifetime benefit maximum.

7 We note that ERISA requires UPS as Plan Administrator to issue an

updated SPD every five years “which integrates all plan amendments

made within such five-year period.” 29 U.S.C. § 1024(b)(1)(B). The

record suggests that UPS did not comply with this requirement, because

UPS did not issue an updated SPD in 2011, five years after it issued the

2006 SPD.
24 KING V. BLUE CROSS AND BLUE SHIELD

Furthermore, even examining the 2010 Summary of

Modifications in isolation, the defendants’ interpretation

requires the average plan participant to read the entire

document, notice the subtle shift in font type and size

between the “Health Care Reform*” heading and the other

headings that follow, and somehow intuit that all of the text

between the “Health Care Reform*” heading on the first page

and the “Mental Health Parity” heading on the second page

describes required changes under the Affordable Care Act. 

But the fact that all of these paragraphs relate to the

Affordable Care Act is not apparent from the text.8

In fact,

the “Elimination of Lifetime Maximum Benefits” paragraph

does not mention the Affordable Care Act at all. That

paragraph states:

Lifetime dollar limits on aggregate benefits

will be eliminated from your Plan effective

January l, 2011. If you are an otherwise

eligible employee whose coverage previously

ended upon reaching your lifetime maximum

benefit under the Plan, you will have 30 days,

beginning the first day of the annual

enrollment period, to re-enroll in the Plan. If

you choose to enroll, your coverage is

effective January l, 2011 (as long as you

continue to meet the Plan’s eligibility

8 Nor is it apparent, or even discernable upon close examination, that

the individual paragraphs between these two headings were intended to be

a single “item” because the paragraphs pertain to a diverse set of topics,

including “Grandfather Plan Status,” “Dependent Children Under Age

26,” “Elimination of Lifetime Maximum Benefits,” “Elimination of

Lifetime and Annual Dollar Limits for ‘Essential Benefits,’” “Elimination

of Pre-existing Conditions on Benefits for Children Under Age 19,” and

“HCSA Reimbursement of Over-the-Counter Drugs.”
KING V. BLUE CROSS AND BLUE SHIELD 25

requirements). You may also enroll any

dependents whose coverage ended upon

reaching their lifetime maximum.

The effective date for the elimination of the lifetime

maximum is the same date mentioned in the first paragraph

under the “Health Care Reform*” heading, but other changes

in the 2010 Summary of Modifications, unrelated to the

Affordable Care Act, also use this effective date.

As explained, the defendants argue that the reference to

“the following changes” in the “Health Care Reform*”

paragraph indicates that the asterisk in the “Health Care

Reform*” heading applies to all the paragraphs between the

“Health Care Reform*” heading on the first page and the

“Mental Health Parity” heading on the second page. But

even assuming that the average Retiree Plan participant

would read this paragraph (despite the asterisk in the heading

which plainly states that the paragraph does not apply to

retirees), the participant would not know how many changes

are included in “the following changes.” That phrase can be

read to refer to just the changes in the next two paragraphs

under the heading “Grandfather Plan Status,” or it can be read

to refer to some unknown number of additional changes.

Notably, the two “Grandfather Plan Status” paragraphs

explicitly discuss the Affordable Care Act, but the next

heading is “Dependent Children Under Age 26,” and the five

paragraphs that follow it do not refer explicitly to the

Affordable Care Act at all. This organization could easily

suggest to the reader that these paragraphs do not relate to the

“Health Care Reform*” heading. Of the three sections that

follow “Elimination of Lifetime Maximum Benefits,” only
26 KING V. BLUE CROSS AND BLUE SHIELD

two mention the Affordable Care Act.9In short, even

assuming that the average plan participant would read the

first paragraph—in spite of the fact that the heading with the

asterisk informs the reader that it does not apply to

retirees—the participant would not know how many of the

following paragraphs fall within “the following changes” not

applicable to the Retiree Plan. A participant could reasonably

conclude that the inapplicable changes include only the

“Grandfather Plan Status” paragraphs or only those

paragraphs that explicitly mention the Affordable Care Act. 

Congress mandated that ERISA disclosures must be designed

to prevent plan participants from having to engage in such

close parsing of the text, format, and font to determine

whether a benefit limitation applies to their plan.

Comparing the 2010 Summary of Modifications to the

other summaries of material modifications demonstrates

several ways in which UPS could have made the 2010

amendments easier for the average plan participant to

understand. First, the October 2006 Summary of Material

Modifications places small subheadings directly below the

larger major headings, with no intervening text, to indicate

9

 At oral argument, defense counsel was asked how—aside from the

subtle changes in font type and size—a plan participant would know that

the items associated with the “Health Care Reform*” heading end with the

“Mental Health Parity” heading. See Oral Argument at 19:09–23:30,

26:20–27:00, King v. Blue Cross & Blue Shield of Ill., No. 15-55880 (9th

Cir. March 9, 2017), http://www.ca9.uscourts.gov/media/view_video.p

hp?pk_vid=0000011172. Counsel responded that the participant would

know this because the “Mental Health Parity” heading is followed by a

paragraph that does not mention the Affordable Care Act. See id. at

26:20–27:00. But that is also true of the paragraph that immediately

precedes the “Mental Health Parity” heading, titled “HCRA

Reimbursement of Over-the-Counter Drugs.”
KING V. BLUE CROSS AND BLUE SHIELD 27

that they are subheadings. The February 2007 Summary of

Material Modifications uses a noticeably larger font size for

the major headings. The October 2007 Summary of Material

Modifications employs asterisks next to six out of ten

headings in the document to indicate that all six of those

sections do not apply to retirees. Better yet, in September

2012, UPS issued separate summaries of material

modifications for the Employee Plan and the Retiree Plan,

clearly labeled as such at the top of the first page. UPS could

have used any one of these drafting strategies, among others,

to make clear that the lifetime benefit maximum still applied

to the Retiree Plan. The failure to do so was critical to Mrs.

King, who could have obtained health insurance to cover the

cost of her medical care through her own employment.

Even with the benefit of defense counsel’s argument, we

cannot agree that the subtle shifts in font size and use of a

single asterisk on the first page of the 2010 Summary of

Modifications can be described as “calculated to be

understood by the average plan participant.” 29 U.S.C.

§ 1022(a). Instead, the document obscures whether the

paragraph titled “Elimination of Lifetime Maximum

Benefits” applies to the Retiree Plan. For these reasons, we

conclude that the SPD, as amended by the 2010 Summary of

Modifications, violates ERISA’s statutory and regulatory

disclosure requirements. Whether the 2010 Summary of

Modifications violates ERISA disclosure requirements is a

distinct inquiry from whether the plan administrator abused

its discretion and whether the reasonable expectations

doctrine applies. See, e.g., Scharff, 581 F.3d at 906–07;

Estate of Shockley v. Alyeska Pipeline Serv. Co., 130 F.3d

403, 407 (9th Cir. 1997). Because we conclude that the

defendants’ notice of the amendment to the lifetime benefit

maximum violates ERISA, we do not address: (1) whether
28 KING V. BLUE CROSS AND BLUE SHIELD

UPS abused its discretion as Plan Administrator by

interpreting the Retiree Plan to include a $500,000 lifetime

benefit maximum; and (2) whether enforcing the lifetime

maximum would defeat Mrs. King’s reasonable expectations

of coverage.

III. Breach of Fiduciary Duties

The plaintiff argues that UPS, the Retiree Plan, and Blue

Cross breached their fiduciary duties to Mrs. King under

ERISA. “ERISA requires a ‘fiduciary’ to ‘discharge his

duties with respect to a plan solely in the interest of the

participants and beneficiaries.’” Farr, 151 F.3d at 914

(quoting 29 U.S.C. § 1104(a)). “The duty of loyalty is one of

the common law trust principles that apply to ERISA

fiduciaries, and it encompasses a duty to disclose.” 

Washington v. Bert Bell/Pete Rozelle NFL Ret. Plan,

504 F.3d 818, 823 (9th Cir. 2007) (internal citation omitted)

(footnote omitted). “A fiduciary has an obligation to convey

complete and accurate information material to the

beneficiary’s circumstance, even when a beneficiary has not

specifically asked for the information.” Barker v. Am. Mobil

Power Corp., 64 F.3d 1397, 1403 (9th Cir. 1995). 

“[F]iduciaries breach their duties if they mislead plan

participants or misrepresent the terms or administration of a

plan.” Id.

A. UPS and the Retiree Plan

The plaintiff argues that UPS and the Retiree Plan

breached their fiduciary duties to Mrs. King by failing to

comply with ERISA’s disclosure requirements. More

specifically, the plaintiff maintains that the 2010 Summary of

Modifications misled Mrs. King “into understanding that
KING V. BLUE CROSS AND BLUE SHIELD 29

there was no lifetime cap on her plan.” UPS and the Retiree

Plan contend that this claim must fail because: (1) the Retiree

Plan is not ambiguous with respect to whether the lifetime

benefit maximum applies to Mrs. King’s claims; and

(2) neither UPS nor the Retiree Plan misrepresented this fact

to Mrs. King. The district court granted summary judgment

to the defendants. Because the SPD, as amended by the 2010

Summary of Modifications, does not comply with the

relevant statutory and regulatory disclosure requirements, the

district court erred by granting summary judgment to UPS

and the Retiree Plan on the breach of fiduciary duty claims.

UPS and the Retiree Plan had a duty to “provide

sufficiently detailed information” about whether the lifetime

benefit maximum applied to the Retiree Plan after the

September 2010 amendments. See Farr, 151 F.3d at 915. As

we have explained, the 2010 Summary of Modifications

failed to alert retirees and their covered dependents that,

despite the defendants’ announcement that the lifetime cap

would no longer apply to the Employee Plan, the defendants

intended that the lifetime maximum still apply to the Retiree

Plan. Therefore, we reverse the district court’s order granting

summary judgment to UPS and the Retiree Plan on the breach

of fiduciary duty claims.

B. Blue Cross

The plaintiff next argues that issues of material fact

preclude summary judgment on the breach of fiduciary duty

claim against the claims administrator Blue Cross. Blue

Cross responds that: (1) it does not qualify as an ERISA

fiduciary; and (2) it did not “provide inaccurate or misleading

information regarding the terms of Mrs. King’s benefit plan.” 

The district court ruled that Blue Cross is not an ERISA
30 KING V. BLUE CROSS AND BLUE SHIELD

fiduciary and that Blue Cross did not make any

misrepresentations to the plaintiff. We respectfully disagree.

1. Fiduciary Status

As relevant here, ERISA defines a “fiduciarywith respect

to a plan” to include a person who “exercises any

discretionary authority or discretionary control respecting

management of such plan” or “has any discretionary authority

or discretionary responsibility in the administration of such

plan.” 29 U.S.C. § 1002(21)(A). The Department of Labor’s

“questions and answers” relating to fiduciary responsibility

under ERISA explain that agents or employees who perform

“purely ministerial functions” do not qualify as fiduciaries,

29 C.F.R. § 2509.75-8, at D-2; neither do agents “whose sole

function is to calculate the amount of benefits to which each

plan participant is entitled in accordance with a mathematical

formula,” id. at D-3. On the other end of the spectrum, an

agent “who has the final authority to authorize or disallow

benefit payments in cases where a dispute exists” is a

fiduciary. Id. Blue Cross argues that it is not a fiduciary

because the SPD states that UPS has “the exclusive right and

discretion to interpret the terms and conditions of the Plan,”

UPS only delegated “administrative duties” to Blue Cross,

and UPS retained the authority to decide some appeals. This

argument rests on a misunderstanding of the fiduciary

designation under ERISA.

In Kyle Railways, Inc. v. Pacific Administration Services,

Inc., 990 F.2d 513, 517 (9th Cir. 1993), we held that benefit

plan insurers are not fiduciaries “unless they are given the

discretion to manage plan assets or to determine claims made

against the plan.” We cautioned that we do not “narrowly

interpret the phrase ‘discretion . . . to determine claims.’” Id. 
KING V. BLUE CROSS AND BLUE SHIELD 31

“While the mere provision of contractual benefits does not

make an insurance company a fiduciary under ERISA, an

insurer will be found to be an ERISA fiduciary if it has the

authority to grant, deny, or review denied claims.” Id. at 518

(internal citations omitted). A plan’s characterization of a

claim administrator’s duties as “ministerial” is not

determinative: we look past the plan’s characterization to

determine what duties the administrator actually performs. 

See IT Corp. v. Gen. Am. Life Ins. Co., 107 F.3d 1415,

1419–20 (9th Cir. 1997).

Blue Cross processes and pays claims to plan participants

and conducts the first-level appeal for benefit denials. 

Although the CRC conducts the second-level appeal, Blue

Cross makes initial benefit determinations for all plan

participants and makes final determinations for those

participants who do not appeal their claims to the CRC. This

requires that Blue Cross interpret the Retiree Plan to

determine whether to pay claims and whether to uphold

benefit denials on appeal. See id. at 1420. In short, Blue

Cross has the authority to grant, deny, and review denied

claims. Any one of these abilities would be sufficient to

confer fiduciary status under ERISA. See Kyle, 990 F.2d at

518. The district court erred by ruling that Blue Cross is not

an ERISA fiduciary.

2. Misrepresentations

The plaintiff argues that Blue Cross misled Mrs. King

with respect to whether her plan had a lifetime benefit cap

and when she reached the benefit limit. Blue Cross responds

that all the information it provided to Mrs. King was correct

and accurate. The district court ruled that “there is no

evidence that Blue Cross made any misrepresentations to
32 KING V. BLUE CROSS AND BLUE SHIELD

Plaintiff about the plan terms.” Again, we respectfully

disagree.

Based on the current record, we conclude that there is a

genuine dispute of material fact about whether Blue Cross

misled Mrs. King. We note, however, that there are key

pieces of evidence missing from the record on both sides. 

The plaintiff points to the series of approval letters that Mrs.

King received from Blue Cross certifying her treatment as

“medically necessary,” Mrs. King’s phone call with a Blue

Cross representative during the last week of January, in which

the representative said that she was $10,000 away from the

lifetime maximum, and the March 14, 2013 letter stating that

Mrs. King reached her lifetime maximum on January 1,

2013.10 Although the approval letters all contained a

disclaimer that they were “not a guarantee of payment of

benefits,” theydid not mention the lifetime benefit maximum. 

The letters stated that payment was subject to any limitations

in the SPD, but, as discussed, the 2010 Summary of

Modifications was ambiguous with respect to whether the

lifetime benefit maximum applied to the Retiree Plan.

Blue Cross argues that the representative Mrs. King spoke

to in late January “would only have information concerning

claims that had been submitted and adjudicated in the

ordinary course of business at the time of the call.” Thus,

according to Blue Cross, the representative did not falsely

10 In her letter to Blue Cross on March 14, 2013, Mrs. King also stated

that the defendants assured her husband that her benefits had no limit and

that she “was reassured this was the case at least weekly by case managers

who spoke with Blue Cross.” The letter does notspecify which defendant

made these assurances, and the record does not otherwise indicate whether

it was Blue Cross, UPS, or the Retiree Plan.
KING V. BLUE CROSS AND BLUE SHIELD 33

represent that Mrs. King was $10,000 away from the lifetime

limit at the end of January. But Blue Cross does not cite to

any evidence in the record with respect to what claims had

been received or adjudicated at that point in time. The

explanation of benefits Blue Cross sent Mrs. King on

February 19, 2013 stated that her benefit claims from

November 2012 were denied because she had exceeded the

lifetime maximum, while the March 14, 2013 letter Blue

Cross sent to Mrs. King stated that she reached the limit on

January 1, 2013. A reasonable juror could conclude that Blue

Cross made misrepresentations to Mrs. King about the

lifetime benefit maximum. Therefore, the district court erred

by granting summary judgment to Blue Cross on the breach

of fiduciary duty claim.

IV. Remedy

In the First Amended Complaint, Mrs. King sought relief

under ERISA sections 502(a)(1)(B) and (a)(3). 

Section 502(a)(1)(B) provides for a civil action “to recover

benefits due . . . under the terms of [the] plan,” while section

502(a)(3) provides for “equitable relief” to redress ERISA

violations. 29 U.S.C. § 1132(a)(1)(B), (a)(3). Mrs. King

originally argued that she was entitled to relief primarily

because the Affordable Care Act amended ERISA to require

the defendants to lift the lifetime benefit maximum in the

Retiree Plan. As discussed above, this argument fails.

On appeal, it is unclear whether Mr. King seeks relief

under section 502(a)(1)(B), section 502(a)(3), or both. 

Because the district court granted summary judgment to the

defendants, it did not address the appropriate remedy for this

violation, and we decline to do so in the first instance. On

remand, after the plaintiff specifies whether he still seeks
34 KING V. BLUE CROSS AND BLUE SHIELD

relief under ERISA section 502(a)(1)(B), what type of

equitable remedy he seeks under section 502(a)(3), and why,

the district court should determine the appropriate remedy.

CONCLUSION

The plaintiff’s argument that ERISA, as amended by the

Affordable Care Act, requires the defendants to lift the

lifetime benefit maximum in the Retiree Plan fails. However,

the SPD, as amended by the 2010 Summary of Modifications,

violates ERISA’s statutory and regulatory disclosure

requirements, and the district court erred by granting

summary judgment to the defendants on the breach of

fiduciary duty claims. We therefore reverse the order

granting summary judgment to the defendants and remand to

the district court for proceedings consistent with this opinion.

REVERSED and REMANDED.
APPENDIX


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