Opinion ID: 493993
Heading Depth: 2
Heading Rank: 1

Heading: osborne's duty as fiduciary of the employee health plan

Text: 14 Fiduciaries of health plans under ERISA have a duty to administer the plan solely in the interest of the participants and the beneficiaries and--for the exclusive purpose of: providing benefits to participants.... 29 U.S.C. Sec. 1104(a)(1)(A)(i) (1982); Morse, 732 F.2d at 1144. As fiduciary of the health plan, Osborne certainly had an obligation to attempt to maintain sufficient funds with which to properly administer the plan for the employee-beneficiaries. Title 29 U.S.C. Sec. 1104(a)(1)(B) (1982) provides that a health plan fiduciary shall discharge the duty to administer the plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Amato, 773 F.2d at 1416; Leigh, 727 F.2d at 123; see Morse, 732 F.2d at 1145. The fiduciary also may not deal with the assets of the plan in his own interest or for his own account. 29 U.S.C. Sec. 1106(b)(1) (1982). Such a fiduciary also has a duty to keep the beneficiaries of the plan informed as to the insurance coverage, or lack thereof, for the plan. See e.g., 29 U.S.C. Secs. 1021, 1022, 1024 (1982). It is not clear from the record whether Osborne misrepresented to the employees of Powhatan that they were insured for the health plan when, in fact, they were not. Several of the employees testified at trial that Osborne had made misrepresentations as to the existence of insurance coverage. Clearly, if Osborne did make such misrepresentations, he would have breached his fiduciary duty to the health plan. Peoria Union Stock Yards Company Retirement Plan v. Penn Mutual Life Insurance Co., 698 F.2d 320, 326 (7th Cir.1983). The district court, however, did not make a finding of fact in this regard. The district court's order holding Osborne personally liable was predicated solely on Osborne's decision not to pay the insurance premiums. 15 We therefore remand this portion of the district court's order so that the district court can make findings of fact on this matter.