Court Opinion

ID: 4521051
Source: CourtListenerOpinion
Date Created: 2020-03-31 17:00:36.925726+00
Date Added: 2024-06-11T09:25:13.015363
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                             Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                     File Name: 20a0101p.06

                  UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

 CHERYL L. WALLACE,                                     ┐
                                  Plaintiff-Appellee,   │
       v.                                               │
                                                        │      No. 18-2316
                                                         >
 OAKWOOD HEALTHCARE, INC., et al.,                      │
                                                        │
                                         Defendants,    │
                                                        │
 RELIANCE STANDARD LIFE INSURANCE COMPANY,              │
                             Defendant-Appellant.       │
                                                        │
                                                        ┘

                        Appeal from the United States District Court
                        for the Eastern District of Michigan at Flint.
                    No. 4:16-cv-10625—Linda V. Parker, District Judge.

                                 Argued: October 23, 2019

                            Decided and Filed: March 31, 2020

               Before: CLAY, THAPAR, and NALBANDIAN, Circuit Judges.
                                _________________

                                         COUNSEL

ARGUED: Joshua Bachrach, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER,
LLP, Chicago, Illinois, for Appellant. John J. Conway, III, JOHN J. CONWAY, P.C., Royal
Oak, Michigan, for Appellee. ON BRIEF: Joshua Bachrach, Edna S. Kersting, WILSON,
ELSER, MOSKOWITZ, EDELMAN & DICKER, LLP, Chicago, Illinois, for Appellant. John
J. Conway, III, JOHN J. CONWAY, P.C., Royal Oak, Michigan, for Appellee.

         CLAY, J., delivered the opinion of the court in which THAPAR and NALBANDIAN,
JJ., joined. THAPAR, J. (pp. 25–26), delivered a separate concurring opinion.
 No. 18-2316                     Wallace v. Oakwood Healthcare, et al.                                 Page 2

                                            _________________

                                                  OPINION
                                            _________________

        CLAY, Circuit Judge.            Plaintiff Cheryl L. Wallace filed suit against Beaumont
Healthcare Employee Welfare Benefit Plan, formerly known as Oakwood Healthcare, Inc.
Employee Welfare Benefit Plan; Hartford Life and Accident Insurance Company; and Reliance
Standard Life Insurance Company under the Employee Retirement Income Security Act of 1974,
§ 502(a)(1)(b), codified at 29 U.S.C. § 1132(a)(1)(B), after she was denied long-term disability
benefits under her employer’s employee welfare benefit plan. Defendants Beaumont Healthcare
Employee Welfare Benefit Plan and Hartford Life Insurance Company were subsequently
dismissed, and the action proceeded against the only current Defendant, Reliance Standard Life
Insurance Company. The district court granted Plaintiff judgment on the administrative record.
Defendant now appeals the district court’s judgment. For the reasons set forth below, we
AFFIRM IN PART and VACATE IN PART the district court’s judgment, and REMAND for
further proceedings consistent with this opinion.

                                             BACKGROUND

                                           Factual Background

        Plaintiff worked as a registered nurse at Oakwood Healthcare, Inc. Health System
(“Oakwood”) starting in 2005.1 As an Oakwood employee, Plaintiff participated in Oakwood’s
employee welfare benefit plan, the Oakwood Healthcare, Inc. Employee Welfare Benefit Plan,
which provided long-term disability (“LTD”) benefits to eligible employees. This plan is subject
to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq.

        This dispute began when Plaintiff’s employer decided to switch the insurer responsible
for its employee welfare benefit plan. The plan was funded and insured by Hartford Life and
Accident Insurance Company (“Hartford”) through December 31, 2012, when Oakwood

        1
          Oakwood has since merged with Beaumont Health System. Oakwood and the employee welfare benefit
plan are now known by the Beaumont name. For clarity, we refer to Plaintiff’s employer as Oakwood, as it was
known at the time of the relevant events. Likewise, we refer to the relevant employee welfare benefit plan as the
Oakwood Healthcare, Inc. Employee Welfare Benefit Plan.
 No. 18-2316                      Wallace v. Oakwood Healthcare, et al.                                 Page 3

terminated its contract with Hartford. Effective January 1, 2013, Defendant became the plan’s
funder and insurer. Defendant’s group policy and the document detailing that policy are subject
to ERISA. Defendant also served as the plan’s claims review fiduciary under ERISA.

        In September 2012, Plaintiff contracted an illness while traveling in Belize. Plaintiff’s
health deteriorated thereafter.       She suffered from medical issues including hypothyroidism,
multiple hormone deficiencies, hypotension, hypopituitarism, immune suppression disorder,
severe joint pain, and tachycardia, an arrhythmia of the heart. As a result, beginning in October
2012, Plaintiff took medical leave from Oakwood. While Plaintiff was out on medical leave,
Oakwood’s previous contract with Hartford ended and its new contract with Defendant began.
Plaintiff returned to work on April 7, 2013, but soon had to take medical leave again, starting on
May 13, 2013.2 Plaintiff has not returned to work since.

        Plaintiff subsequently filed a claim for LTD benefits with Defendant.                        Defendant
investigated Plaintiff’s claim and, in the process, developed the administrative record now before
this Court. After its investigation, Defendant sent Plaintiff a letter denying her benefits, citing
the pre-existing condition provision of its plan document as barring her claim. In that letter,
Defendant detailed how Plaintiff could request a review of her claim and the rights she would be
entitled to in that review process. The letter informed her that “[her] failure to request a review
within 180 days of [her] receipt of this letter may constitute a failure to exhaust the
administrative remedies available under [ERISA], and may affect [her] ability to bring a civil
action under [ERISA].” (Admin. R., R. 42-1 at PageID #821.) Defendant’s underlying plan
document did not describe either the claim review process or an exhaustion requirement.

        Following receipt of her denial, Plaintiff’s lawyer communicated with an employee of
Defendant who worked on her investigation.                   Plaintiff’s lawyer apparently emailed that
employee regarding a note in Defendant’s claims file stating that Defendant had contacted a
broker to determine whether Plaintiff had filed a claim with Hartford. The note indicated that the
broker said Plaintiff had not filed a claim and it would have been denied if she had. Plaintiff’s

        2
         Plaintiff and Defendant disagree as to whether Plaintiff’s first day of leave was May 12, 2013 or May 13,
2013. The administrative record suggests her first day of leave was May 13, 2013. (Admin. R., R. 42-1 at PageID
##762, 798.)
 No. 18-2316                 Wallace v. Oakwood Healthcare, et al.                       Page 4

lawyer suggested he was “inclined to believe your analysis that her LTD claim should be
submitted to Hartford, the prior LTD carrier,” (Admin. R., R. 42-3 at PageID #1094), although
the evidence in the record does not demonstrate that Defendant’s employee made any such
suggestion. Nevertheless, Plaintiff’s counsel asked if “anyone else (other than your attorneys)”
had suggested the claim should be filed with Hartford. (Id.) The employee responded that all of
its documents from Hartford were included in the claims file and that “[t]here was no discussion
with Reliance/Matrix attorneys during the review and decision of Ms. Wallace’s claim for
benefits.” (Admin. R., R. 42-1 at PageID #823.)

        Plaintiff subsequently submitted a claim to Hartford, which was also denied.         She
appealed that decision internally and received another denial. Plaintiff did not submit a written
request seeking review of Defendant’s decision, but instead filed this lawsuit on February 19,
2016.

                                   Procedural Background

        Plaintiff filed suit against Defendant under ERISA § 502(a)(1)(B), codified at 29 U.S.C.
§ 1132(a)(1)(B). Plaintiff also originally asserted a violation of procedural due process and a
claim for equitable relief and named the Oakwood Healthcare, Inc. Employee Welfare Benefit
Plan and Hartford as additional defendants. These claims and parties have since been dismissed.

        Defendant moved to dismiss Plaintiff’s current claim under Federal Rule of Civil
Procedure 12(b)(6), arguing that Plaintiff failed to exhaust her administrative remedies prior to
filing the lawsuit and therefore could not pursue a claim under ERISA. The district court denied
Defendant’s motion as to this claim, finding that Plaintiff did not need to exhaust her
administrative remedies because Defendant’s plan document did not require exhaustion.

        After multiple additional briefings and Defendant’s filing of the administrative record,
the parties filed cross-motions for judgment on that administrative record. The district court
granted Plaintiff’s motion for judgment and denied Defendant’s cross-motion. The district court
found that Defendant wrongly determined that Plaintiff’s LTD claim was barred under its policy,
as Plaintiff was covered by the policy’s “Transfer of Insurance Coverage” provision, and that
Plaintiff was entitled to an award of LTD benefits and attorneys’ fees. The district court
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                            Page 5

subsequently entered an opinion and order, awarding Plaintiff monthly back benefits through the
present, post-judgment benefits, and attorneys’ fees.

       Defendant’s timely notice of appeal followed.

                                           DISCUSSION

       Defendant argues on appeal: (1) that the district court erred in determining Plaintiff was
not required to exhaust her administrative remedies prior to filing suit, (2) that the district court
erred in overturning Defendant’s denial of LTD benefits, (3) that the district court improperly
awarded and calculated benefits to Plaintiff, and (4) that the district court abused its discretion in
awarding Plaintiff attorneys’ fees. We address these arguments in turn.

I.     Exhaustion of Administrative Remedies

                                       Standard of Review

       In its decision, the district court did not simply grant Plaintiff an exception to the
application of exhaustion principles, but found that exhaustion principles did not apply to
Plaintiff’s benefits claim. (See Op. & Order Granting & Den. Def.’s Mot. Dismiss, R. 36 at
PageID #670 (“For these reasons, this Court concludes that Plaintiff was not required to exhaust
any administrative remedies prior to filing this lawsuit”).) The question of whether exhaustion
principles apply to Plaintiff’s benefits claim is a question of law that this Court reviews de novo.
Hitchcock v. Cumberland Univ. 403(b) DC Plan, 851 F.3d 552, 559 (6th Cir. 2017) (citing
Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 248 (3d Cir. 2002); Diaz v. United Agric.
Emp. Welfare Benefit Plan & Tr., 50 F.3d 1478, 1483 (9th Cir. 1995) (“Because the potential
applicability vel non of exhaustion principles is a question of law, we consider it de novo. But if
that question receives an affirmative answer, the District Court’s decision not to grant an
exception to the application of those principles is reviewed for an abuse of discretion.”)).

                                              Analysis

       The district court found that Plaintiff was not required to exhaust her administrative
remedies because Defendant’s plan document did not affirmatively require exhaustion, but
“[t]his court can affirm a decision of the district court on any grounds supported by the record,
 No. 18-2316                 Wallace v. Oakwood Healthcare, et al.                        Page 6

even if different from those relied on by the district court,” Brown v. Tidwell, 169 F.3d 330, 332
(6th Cir. 1999). Defendant contends that exhaustion is required whether or not it is explicitly
stated in a plan document and that none of Plaintiff’s asserted reasons to excuse this requirement
are availing. Plaintiff responds that: (1) exhaustion was not required because Defendant’s policy
does not call for it; (2) her administrative remedies should be deemed exhausted because
Defendant did not comply with the ERISA requirement to establish a reasonable claims
procedure; (3) she attempted to exhaust her remedies but was misled by Defendant into filing her
claim with Hartford instead; and (4) appealing her decision internally would have been futile.

       For the reasons set forth below, we conclude that, because Defendant did not describe
any internal claims review process or remedies in its plan document, the plan did not establish a
reasonable claims procedure pursuant to ERISA regulations; therefore, Plaintiff’s administrative
remedies must be deemed exhausted. See 29 C.F.R. 2560.503-1(l) (2003) (stating that if a plan
fails to establish or follow claims procedures consistent with ERISA regulations, “a claimant
shall be deemed to have exhausted the administrative remedies available under the plan”).

       ERISA itself does not include an explicit exhaustion requirement. Coomer v. Bethesda
Hosp., Inc., 370 F.3d 499, 504 (6th Cir. 2004). Nevertheless, because ERISA provides for the
administrative review of benefits, this Court has read such a requirement into the statute.
Hitchcock, 851 F.3d at 560.      We have recognized limited exceptions to this requirement,
including where it would be futile to pursue an administrative remedy or such a remedy would be
inadequate. Id.

       ERISA regulations establish an additional exception. At the time Plaintiff filed her
claim, they provided:

       In the case of the failure of a plan to establish or follow claims procedures
       consistent with the requirements of this section, a claimant shall be deemed to
       have exhausted the administrative remedies available under the plan and shall be
       entitled to pursue any available remedies under section 502(a) of the Act on the
       basis that the plan has failed to provide a reasonable claims procedure that would
       yield a decision on the merits of the claim.

29 C.F.R. 2560.503-1(l) (2003) (emphasis added); see also ERISA Claims Procedure Final Rule,
65 Fed. Reg. 70,246, 70,271 (Nov. 21, 2000) (codified at 29 C.F.R. § 2650.503-1 (2003))
 No. 18-2316                        Wallace v. Oakwood Healthcare, et al.                                     Page 7

(adding language and indicating applicability date of January 1, 2002).3 That same section of the
ERISA regulations requires that a plan must “establish and maintain a procedure by which a
claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an
appropriate named fiduciary of the plan, and under which there will be a full and fair review of
the claim and the adverse benefit determination.” 29 C.F.R. § 2560.503-1(h)(1) (2003); see also
29 U.S.C. § 1133 (requiring employee benefit plans to allow participants whose claims have
been denied “a reasonable opportunity . . . for a full and fair review by the appropriate named
fiduciary of the decision denying the claim”). In this case, Defendant served as that fiduciary.

         Defendant maintains claims procedures and argues that it was not required to include
those procedures in its plan document because it detailed those procedures in its benefits denial
letter to Plaintiff. But “one of ERISA’s central goals is to enable beneficiaries to learn their
rights and obligations at any time,” including before a denial of benefits, and Congress required
plans to be “established and maintained pursuant to a written instrument” that enabled
beneficiaries to determine those rights and obligations “on examining the plan documents.” See
Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995) (quoting 29 U.S.C. § 1102(a)(1);
and then quoting H.R. Rep. No. 93-1280, at 297 (1974)) (emphases omitted). In keeping with
this intent, we hold today that for a plan fiduciary to avail itself of this Court’s exhaustion
requirement, its underlying plan document must—at minimum—detail its required internal
appeal procedures.

         This conclusion is supported by the ERISA requirement that employees be provided with
a document summarizing plan details (a “summary plan description” or “SPD”) that includes
“[a] description of all claims procedures” and “meet[s] the requirements of 29 C.F.R.
2520.102-3.” 29 C.F.R. § 2560.503-1(b)(2) (2003); see also 29 U.S.C. § 1022.                                  Section
2520.102-3 in turn explicitly requires that the SPD include information on “[t]he procedures
governing claims for benefits (including procedures for . . . reviewing denied claims in the case

         3
            These regulations now go further, stating that, “In the case of a claim for disability benefits, if the plan
fails to strictly adhere to all the requirements of this section with respect to a claim, the claimant is deemed to have
exhausted the administrative remedies available under the plan . . . .” 29 C.F.R. § 2560.503-1(l)(2)(ii) (2018).
Plaintiff wrongly relies on this language, which applies only to claims “filed under a plan after April 1, 2018.” 29
C.F.R. § 2560.503-1(p)(3).
 No. 18-2316                       Wallace v. Oakwood Healthcare, et al.                                   Page 8

of any plan) . . . and remedies available under the plan for the redress of claims which are denied
in whole or in part (including procedures required under section 503 of Title I of the Act).”
29 C.F.R. § 2520.102-3(s) (2001); see also 29 U.S.C. §§ 1022(b), 1133 (detailing similar
requirements).4 Per Section 503 of ERISA, an employee benefit plan must provide participants
“a reasonable opportunity” for their claim denials to receive “a full and fair review by the
appropriate named fiduciary of the decision denying the claim.” 29 U.S.C. § 1133. Under the
instant plan, that fiduciary is Defendant.

         The SPD for the plan in question, if it exists, is not in the court record. This would be a
clearer case if it was. But a summary plan description is just that: a summary of the plan. And if
the SPD must include claims review procedures, surely the plan it summarizes must also include
those procedures. See 29 U.S.C. § 1022(a) (providing that an SPD “shall be sufficiently accurate
and comprehensive to reasonably apprise . . . participants and beneficiaries of their rights and
obligations under the plan”) (emphasis added); Electro-Mechanical Corp. v. Ogan, 9 F.3d 445,
451 (6th Cir. 1993) (describing SPD as a document that “specifically and simply describes the
plan’s provisions,” details “the contents of the plan,” and “explains the plan and its terms”)
(quoting Allen v. Atl. Richfield Ret. Plan, 480 F. Supp. 848, 851 (E.D. Penn. 1979)).

         Defendant’s plan document contains no information about the review procedures or
remedies available for denied claims. In fact, it is actively misleading. It mentions ERISA and
claims appeals only in discussing arbitration (which Defendant does not argue was required
here): “the Insured’s ERISA claim appeal remedies, if applicable, must be exhausted before the
claim may be submitted to arbitration.” (See Admin. R., R. 42-1 at PageID #744.) This
provision does not detail what the referenced “claim appeal remedies” are, what process is
required to receive them, or when they are applicable; nor does it name a similar exhaustion
requirement applicable in any circumstance outside of arbitration. In the absence of any such
explanation, a participant would be justified in concluding that no such remedies are available or

         4
           While this section also acknowledges that those claims procedures may be furnished in a separate
document “that accompanies the plan’s [SPD],” provided that document meets detailed requirements, see 29 C.F.R.
§ 2520.102-3(s) (2001), the only document in the record detailing Defendant’s claims procedure is its benefits denial
letter, which was not provided alongside any SPD.
 No. 18-2316                 Wallace v. Oakwood Healthcare, et al.                        Page 9

requirements are applicable before one files a claim in federal court under ERISA, or they too
would have been detailed by Defendant.

       If a plan document on which an SPD is based does not include information on its claims
review procedures or remedies, an SPD cannot satisfy both statutory dictates that it “sufficiently
accurate[ly] and comprehensive[ly]” describe the terms of the plan and regulatory dictates that it
include procedures for reviewing denied claims, remedies available for denied claims, and
procedures required under Section 503. See 29 U.S.C. § 1022(a); 29 C.F.R. § 2520.102-3(s)
(2001). This suggests that, without such information, Defendant’s plan document does not abide
by legal requirements, and we must deem the Plaintiff “to have exhausted the administrative
remedies available under the plan.” See 29 C.F.R. § 2560.503-1(l) (2003).

       Defendant relies on Marks v. Newcourt Credit Group, 342 F.3d 444, 460 (6th Cir. 2003),
to contend that it need only “substantially comply” with the terms of ERISA’s notice
requirements. But in Marks, we applied the substantial compliance analysis to determine only
whether specific adverse determination letters were sufficient to meet ERISA notice
requirements. See id. at 460–61. A plan document arguably should be subject to stricter
requirements, as Congress established detailed requirements for what must be included in the
SPDs summarizing those plans and what review rights a plan must afford a participant, beyond
ERISA’s basic notice requirements. See 29 U.S.C. §§ 1022(b), 1133. For present purposes, this
Court need not decide whether a plan document must only “substantially comply” with ERISA
requirements or if it must be more strictly compliant, because Defendant’s plan document fails
even a “substantial compliance” analysis. A plan document that does not include either the
procedures for review of denied benefits claims or the remedies for such claims is wholly non-
compliant.

       Moreover, Marks is inapposite because exhaustion was not at issue there and because the
language of 29 C.F.R. § 2560.503-1(l) (2003) was not yet in effect when the Marks defendant
filed his claims. See 342 F.3d at 448 (indicating claims filed in June 1999). Thus, this Court did
not decide in that case whether the claimant’s administrative remedies should be deemed
exhausted in accordance with ERISA regulations. In the case at bar, we must make such a
determination, and because Defendant’s plan document “fail[s] . . . to establish or follow claims
 No. 18-2316                        Wallace v. Oakwood Healthcare, et al.                                    Page 10

procedures consistent with the requirements of” ERISA, we deem Plaintiff’s administrative
remedies exhausted. See 29 C.F.R. § 2560.503-1(l) (2003).

         We do not reach Plaintiff’s additional arguments as to why exhaustion is not required in
this case. Specifically, we do not decide whether, as the district court found, a plan document
must explicitly and affirmatively require exhaustion. At minimum, a plan document must detail
claims review procedures and remedies and must not mislead an employee into believing that
there are no administrative remedies or that those remedies need not be exhausted. Defendant’s
plan document did just that, which this Court cannot condone. Thus, we will proceed to consider
whether the district court properly granted Plaintiff judgment on the record.

II.      Judgment on the Record
                                               Standard of Review

         In considering a district court’s disposition of an ERISA motion for judgment on the
record, we review the legal conclusions of the district court and the plan administrator de novo.5
Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 613 (6th Cir. 1998). Likewise, we review
a plan administrator’s factual findings de novo, according no deference or presumption of
correctness to the administrator’s decision, but instead independently “determine whether the
administrator properly interpreted the plan and whether the insured was entitled to benefits under
the plan.” Hoover v. Provident Life and Acc. Ins. Co., 290 F.3d 801, 809 (6th Cir. 2002). In
conducting this review, courts may look only to the record before the administrator. Id. This
Court’s precedent conflicts as to the standard of review we apply to a district court’s factual
findings. See Hutson v. Reliance Std. Life Ins. Co., 742 F. App’x 113, 117–18 (6th Cir. 2018).
We have found that a de novo standard of review applies to the district court’s factual
determinations. Javery v. Lucent Techs., Inc. Long Term Disability Plan, 741 F.3d 686, 700 (6th

         5
            Ordinarily, if a benefit plan “gives the administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan,” a reviewing court may reverse only if the administrator’s
decision was arbitrary and capricious. Moos v. Square D Co., 72 F.3d 39, 41 (6th Cir. 1995) (quoting Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989)). However, the Michigan Administrative Code prohibits insurers
issuing, advertising, or delivering insurance contracts in the state from using discretionary clauses. See Mich.
Admin. Code r. 500.2201–02. This Court has held that ERISA does not preempt these rules. See Am. Council of
Life Insurers v. Ross, 558 F.3d 600, 609 (6th Cir. 2009). The parties agree that de novo review applies, and we
apply that standard. (Def. Br. at 21–22; Pl. Br. at 25.)
 No. 18-2316                      Wallace v. Oakwood Healthcare, et al.                                  Page 11

Cir. 2014) (“[W]e take a ‘fresh look’ at the administrative record . . . ‘accord[ing] no deference
or presumption of correctness’ to the decisions of either the district court or plan administrator.”)
(quoting Hoover, 290 F.3d at 809). But we have also reviewed a district court’s factual findings
for clear error. See Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 438 (6th Cir. 2006). We do
not resolve that conflict today because the result would be the same under either standard.

                                                    Analysis

        Defendant cites its plan document’s pre-existing conditions limitation as its basis for
denying Plaintiff’s claim. Plaintiff contends that she was covered under the transfer of insurance
coverage provision, and because Defendant did not apply this provision, it erroneously denied
her benefits. The district court agreed with Plaintiff and granted her judgment on this basis.
Because the facts found below are insufficient to allow us to determine whether Plaintiff is
covered under the transfer of insurance provision and the corresponding pre-existing conditions
limitation credit, we vacate the district court’s judgment and remand for further factfinding.

        “Congress intended ERISA plans to ‘be uniform in their interpretation and simple in their
application.’” Shelby Cty. Health Care Corp. v. S. Council of Indus. Workers Health & Welfare
Tr. Fund, 203 F.3d 926, 934 (6th Cir. 2000) (quoting McMillan v. Parrott, 913 F.2d 310, 312
(6th Cir. 1990)). Thus, “[i]n interpreting the provisions of a plan, a plan administrator must
adhere to the plain meaning of its language, as it would be construed by an ordinary person.” Id.
Where that meaning is unclear, “ambiguous contract provisions in ERISA-governed insurance
contracts should be construed against the drafting party.” Perez v. Aetna Life Ins. Co., 150 F.3d
550, 557 n.7 (6th Cir. 1998) (en banc); see also Guinn v. Gen. Motors, LLC, 766 F. App’x 331,
335 n.2 (6th Cir. 2019).6 A term or provision is ambiguous “if it is subject to two reasonable
interpretations.” Schachner v. Blue Cross & Blue Shield, 77 F.3d 889, 893 (6th Cir. 1996).

        6
           This Court has held that this rule is inapplicable when we apply the arbitrary-and-capricious standard to
review the determinations of a plan administrator or fiduciary who has been given “discretionary authority to
determine eligibility for benefits or to construe the terms of a plan,” pursuant to the Supreme Court’s decision in
Firestone. See Clemons v. Norton Healthcare Inc. Ret. Plan, 890 F.3d 254, 264, 266 (6th Cir. 2018). This is not
such a case. The parties agree that de novo review applies, and we apply that standard of review. We held in
Clemons that “when it is not clear whether the administrator has, in fact, been given Firestone deference on a
particular issue, we think the doctrine still has legitimate force.” Id. at 266. Likewise, when it is clear that we
should not afford an administrator or fiduciary Firestone deference, this doctrine applies.
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                      Page 12

Resolving ambiguities in the insured’s favor also accords with ERISA’s goals “‘to promote the
interests of employees and their beneficiaries in employee benefit plans,’ and ‘to protect
contractually defined benefits.’” Firestone, 489 U.S. at 113 (citations omitted) (first quoting
Shaw v. Delta Airlines, Inc., 463 U.S. 85, 90 (1983); and then quoting Mass. Mutual Life Ins. Co.
v. Russell, 473 U.S. 134, 148 (1985)).

       A. Pre-existing Conditions Limitation

       The plan document’s pre-existing conditions limitation provides that Defendant will not
pay benefits for a “Total Disability” caused by, contributed to by, or resulting from “a Pre-
existing Condition unless the Insured has been Actively at Work for one (1) full day following
the end of twelve (12) consecutive months from the date he/she became an Insured.” (Admin.
R., R. 42-1 at PageID #751.) A “Pre-Existing Condition” includes “any Sickness or Injury for
which the Insured received medical Treatment, consultation, care or services, . . . or took
prescribed drugs or medicines, during the three (3) months immediately prior to the Insured’s
effective date of Insurance.” (Id. at #752.)

       The facts before us do not permit us to determine if this pre-existing conditions limitation
provision applies. Neither Plaintiff nor Defendant contest that Plaintiff’s medical condition
qualifies as a “Sickness” or “Injury” under these definitions.      But Defendant and Plaintiff
disagree as to the Plaintiff’s effective date of insurance. Defendant contends it was April 7,
2013, the date that Plaintiff returned from her initial medical leave, while Plaintiff contends it
was January 1, 2013, the “Effective Date” of the policy. The applicability of the transfer of
insurance provision is dispositive as to this issue.     (See Def. Br. at 32 (“The Transfer of
Insurance provision in the Group Policy allows for the individual coverage effective date to
coincide with the effective date of the Group Policy”).) As will be discussed below, additional
factfinding is required to determine whether that provision applies, and so this Court cannot
conclusively determine Plaintiff’s effective date of insurance.
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         Moreover, the district court did not make a factual finding as to when Plaintiff began
receiving medical treatment for her condition. We do not make such a finding now, as it is more
appropriately the province of the district court to address that question on remand. The district
court did find that Plaintiff did not work after May 12, 2013, and we agree. (Op. & Order
Granting Pl.’s Mot. J. & Den. Def.’s Mot. J., R. 50 at PageID ##1228, 1236.) This was less than
twelve consecutive months after either January 1, 2013 or April 7, 2013. Therefore, if the facts
on remand show that Plaintiff did receive medical treatment for her condition in the three months
prior to her effective date of insurance, as determined based on the applicability of the transfer of
insurance provision, Plaintiff would potentially be subject to the pre-existing conditions
limitation.

         B. Transfer of Insurance Coverage Provision

         Defendant’s plan document also includes a “Transfer of Insurance Coverage” provision.
Although the plan document does not directly address how this provision interacts with the pre-
existing conditions limitation, in accordance with its name, this provision apparently ensures that
those covered under the prior policy—subject to some conditions—are also covered under
Defendant’s policy as of the effective date of the policy. Defendant agrees that “[t]he Transfer
of Insurance provision in the Group Policy allows for the individual coverage effective date to
coincide with the effective date of the Group Policy.” (See Def. Br. at 32.) Plaintiff contends
that she was covered under this provision.7 Its relevant portion establishes:

         If an employee was covered under the prior group long term disability insurance
         plan maintained by you prior to this Policy’s Effective Date, but was not Actively
         at Work due to Injury or Sickness on the Effective Date of this Policy and would
         otherwise qualify as an Eligible Person, coverage will be allowed under the
         following conditions:

         7
          Defendant argues that Plaintiff should not be permitted to raise this argument in this case, as she did not
exhaust this issue in an internal appeal. However, this Court has held that a claimant is not required to exhaust her
issues “because of the non-adversarial nature of ERISA proceedings.” Liss v. Fidelity Servs. Co., 516 F. App’x 468,
474 (6th Cir 2013) (citing Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 632 (9th Cir. 2008)
(“The non-adversarial nature of the ERISA proceeding weighs against imposing an issue-exhaustion requirement.”);
Sims v. Apfel, 530 U.S. 103, 110 (2000) (“Where . . . an administrative proceeding is not adversarial, we think the
reasons for a court to require issue exhaustion are much weaker.”)). While we are not bound by this decision, we
agree with its conclusions, which are also supported by our exhaustion holding.
 No. 18-2316                         Wallace v. Oakwood Healthcare, et al.                                   Page 14

        (1) The employee must have been insured with the prior carrier on the date of the
        transfer; and
        (2) Premiums must be paid; and
        (3) Total Disability must begin on or after this Policy’s Effective Date.

(Admin. R., R. 42-1 at PageID #742.)

        The transfer of insurance provision thus only applies to individuals who meet several
conditions. First, the relevant portion of the provision provides that individuals “not Actively at
Work due to Injury or Sickness” when the policy became effective on January 1, 2013 are
eligible for coverage.8 (Id.; see also id. at #729 (indicating effective date of January 1, 2013).)
Neither party contends that Plaintiff was actively at work on this date, and we agree with the
district court’s finding that she was not. (Op. & Order Granting Pl.’s Mot. J. & Den. Def.’s Mot.
J., R. 50 at PageID #1233.)

        As for whether Plaintiff was out of work due to “Injury” or “Sickness,” the document’s
definitions of those terms both require that the affliction cause “Total Disability which begins
while insurance coverage is in effect for the Insured.” (Admin. R., R. 42-1 at PageID ##739–
40.) This is significant. Although Defendant repeatedly asserts that “a disability insurance
policy does not cover an individual already on disability – or not actively at work – just like a
life insurance policy does not cover an individual who is already dead,” (Def. Br. at 37 n.2; see
also Def. Reply Br. at 11 n.2 (citing Sonnichsen v. Principal Life Ins. Co., No. 1:12-cv-1232,
2013 U.S. Dist. LEXIS 31559 (E.D. Wis. March 7, 2013))), this provision’s terms suggest it only
applies to those who were out of work because of an affliction that eventually develops into a
“Total Disability.”9 Defendant’s contention that an employee who left work due to a disability

        8
          Defendant analogizes to McKay v. Reliance Standard Life Ins. Co, No. 1:06-CV-267, 2009 WL 5205375
(E.D. Tenn. Dec. 23, 2009), aff’d 428 F. App’x 537 (Jun. 27, 2011), to suggest that the transfer of insurance
provision was not applicable to Plaintiff because, like the defendant there, she was not “Actively At Work.” 428 F.
App’x at 543–45. Defendant’s argument is unavailing. For one, McKay applied a more generous arbitrary and
capricious standard of review to the plan administrator’s determination. Id. at 540–41. Moreover, Plaintiff does not
contend that she is eligible under the clause of the transfer of insurance provision that requires her to have been
“Actively At Work” on January 1, 2013, but that she is eligible under the clause that does not require her to have
been “Actively At Work.”
        9
            As applicable to Plaintiff, “Total Disability” means “that as a result of Injury or Sickness”:
 No. 18-2316                     Wallace v. Oakwood Healthcare, et al.                                Page 15

before the group policy’s effective date cannot be covered by this provision is thus contradicted
by the plain terms of its provision—such individuals may be covered if their disability began
before the policy’s effective date, so long as they were not totally disabled before that date.
Applying the pre-existing condition limitation to exclude these same individuals would be in
direct conflict with the apparent point of this provision.

        Second, to be covered under the transfer of insurance provision, one must “otherwise
qualify as an Eligible Person.” (Admin. R., R. 42-1 at PageID #742.) According to the plan
document’s terms, Plaintiff is an “Eligible Person” if she “meets the Eligibility Requirements of
this Policy,” which in turn provide that she must be “a member of an Eligible Class” and “ha[ve]
completed the Waiting Period.” (Id. at ##739, 745.) Plaintiff is a member of an “Eligible Class”
if she is an “active, Full-time employee” in one of four designated groups of positions: Classes 1,
2, 3, and 4. (Id. at #737.) It is uncontested that her position fell within Class 3. It is less clear
whether Plaintiff was an “active, Full-time employee,” and we are again unable to determine if
she was.

        The plan document does not define “active,” but the definition notably does not require
an employee to be “Actively at Work,” a term used extensively throughout the document that
means “actually performing on a Full-time basis the material duties” of one’s position, “not
includ[ing] time off as a result of an Injury or Sickness.” (Id. at #739.) Defendant’s failure to
use “Actively at Work” suggests that “active” has a different meaning here. That meaning is
ambiguous. See Schachner, 77 F.3d at 893 (stating that a term or provision is ambiguous “if it is
subject to two reasonable interpretations”).           “Active” could mean that a party is able and
available to work, but not present on that day, as the district court apparently understood it to
mean in the context of Hartford’s plan. (See Op. & Order Granting Pl.’s Mot. J. & Den. Def.’s
Mot. J., R. 50 at PageID #1235 n.6 (distinguishing between “Actively at Work” and “Active

        (1) during the Elimination Period and for the first 24 months for which a Monthly Benefit is
            payable, an Insured cannot perform the material duties of his/her Regular Occupation; . . .
        (2) after a Monthly Benefit has been paid for 24 months, an Insured cannot perform the material
            duties of Any Occupation. We consider the Insured Totally Disabled if due to an Injury or
            Sickness he or she is capable of only performing the material duties on a part-time basis or
            part of the material duties on a Full-time basis.
(Admin. R., R. 42-1 at PageID #740.)
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                        Page 16

Employee” as defined in Hartford’s plan).) “Active” could also mean non-retired. See, e.g.,
Boggs v. Boggs, 520 U.S. 833, 839 (1997) (explaining that “ERISA is designed to ensure the
proper administration of pension and welfare plans, both during the years of the employee’s
active service and in his or her retirement years”). As both definitions are reasonable, this Court
must interpret the definition in Plaintiff’s favor. Perez, 150 F.3d at 557 n.7. As the district court
noted, the record shows that Plaintiff performed work after January 1, 2013. (Op. & Order
Granting Pl.’s Mot. J. & Den. Def.’s Mot. J., R. 50 at PageID ##1228, 1236.) Therefore, we can
conclude that she was an “active” employee in the sense that she was not retired at that point.

       “Full-time” is defined to mean “working for [Oakwood] for a minimum of 30 hours
during a person’s regular work week.” (Admin. R., R. 42-1 at PageID #739.) Defendant
contends that an employee is “Full-time” only if she is “‘working’ for the policy holder for a
minimum of 30 hours.” (Def. Br. at 36 (citing Admin. R., R. 42-1 at PageID #739).) But this
argument ignores the fact that the definition requires thirty hours of work “during a person’s
regular work week.” (Admin. R., R. 42-1 at PageID #739.) Defendant analogizes to Turner v.
Safeco Life Ins. Co., 17 F.3d 141 (6th Cir. 1994), where this Court suggested that a contract
making insurance available to “[a]ll active regular full time employees of the policyholder
working a minimum of [thirty] hours a week” was restricted to those “working” now, since the
verb was in the present tense. (Def. Br. at 36–37 (citing Turner, 17 F.3d at 143–44).) But the
contract at issue in Turner did not modify “working” to include those working the requisite hours
in a “regular work week,” as is the case here. Moreover, in Turner, this Court did not apply the
rule that ambiguous contract provisions are construed against the drafting party, which precedent
now suggests we should apply. See 17 F.3d at 144; Perez, 150 F.3d at 557 n.7. This provision
could be reasonably interpreted to mean that a person must currently work thirty hours a week,
but it could also be reasonably interpreted to mean that a person’s job description requires that
person to work thirty hours a week. See Schachner, 77 F.3d at 893. In the case of ambiguity, we
defer to the latter interpretation. See Perez, 150 F.3d at 557 n.7. The district court also did not
address whether Plaintiff’s required work schedule made her a full-time employee, and we leave
that factual determination to it on remand.
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                        Page 17

       Plaintiff “has completed the Waiting Period” if she “is continuously employed on a Full-
time basis” with Oakwood for 180 days. (Admin. R., R. 42-1 at PageID ##737, 745.) There is
no question that Plaintiff had been continuously employed with Oakwood for more than
180 days at the time the insurance switched, as she had been employed there since 2005. (See id.
at ##768, 824 (noting Plaintiff’s employment since 2005); Op. & Order Granting Pl.’s Mot. J. &
Den. Def.’s Mot. J., R. 50 at PageID #1228.) Thus, she had apparently satisfied the waiting
period. Therefore, if the district court finds that Plaintiff was indeed a full-time employee, she
would have been an Eligible Person on January 1, 2013 and the transfer of insurance provision
would not be inapplicable on this basis.

       But Plaintiff must still meet three more explicit conditions to be covered by the transfer
provision. The first requires Plaintiff to “have been insured with the prior carrier [(Hartford)] on
the date of the transfer.” (Admin. R., R. 42-1 at PageID #742.) Plaintiff, Defendant, and the
district court look to the language of the Hartford plan document to determine whether Plaintiff
was insured. (Pl. Br. at 38–40; Def. Br. at 32–34; Op. & Order Granting Pl.’s Mot. J. & Den.
Def.’s Mot. J., R. 50 at PageID ##1233–35.) However, the whole of Hartford’s plan document is
not in the administrative record, and we are not permitted to look outside the administrative
record on review. Hoover, 390 F.3d at 809. Moreover, whether Plaintiff was insured by
Hartford on the date of transfer is more appropriately treated as a question of fact, rather than an
invitation to construe Hartford’s plan document, especially in the absence of the administrative
record that Hartford itself would have relied upon to determine coverage.            It is therefore
necessary to conduct new factfinding on this point on remand.

       As for the second criterion for coverage, Defendant did not argue before the district court
that Plaintiff’s premiums were unpaid. (See at Def.’s Resp. Pl.’s Mot. J., R. 46 at PageID #1167
(“The facts indicate that Plaintiff fails to satisfy two of the three conditions,” including coverage
with the prior insurer and “Total Disability” beginning after the “Policy’s Effective Date”).)
Defendant itself should be able to confirm whether it was paid Plaintiff’s premiums, and it
implicitly conceded before the district court that Plaintiff’s premiums were indeed paid. The
district court accordingly did not address this issue. Defendant may not now assert that Plaintiff
failed to satisfy this criterion, nor may it so argue on remand. Because this issue was not
 No. 18-2316                       Wallace v. Oakwood Healthcare, et al.                                  Page 18

contested before the district court in the first instance, it is not preserved for review. See, e.g.,
Daft v. Advest, Inc., 658 F.3d 583, 594 (6th Cir. 2011); Hutson, 742 F. App’x at 119.

         Turning to the third criterion, we are also unable to determine whether the “Total
Disability” Plaintiff suffered began “on or after this Policy’s Effective Date” of January 1, 2013.
(Admin. R., R. 42-1 at PageID #742; id. at #729 (indicating January 1, 2013 effective date).) As
applied to Plaintiff, “Total Disability” means that “during the [180-day] Elimination Period and
for the first 24 months for which a Monthly Benefit is payable, an Insured cannot perform the
material duties of his/her Regular Occupation” and “after a Monthly Benefit has been paid for 24
months, an Insured cannot perform the material duties of Any Occupation.” (Id. at ##737, 740.)
The district court found that because Plaintiff was able to work between April 7 and May 12,
2013, she clearly could perform her duties as of those dates, and thus was not “Totally Disabled”
as of January 1, 2013. (See Op. & Order Granting Pl.’s Mot. J. & Den. Def.’s Mot. J., R. 50 at
PageID #1236.)10

         The district court’s analysis on this point overlooks two crucial provisions of the plan
document. These provisions allow that one may be “Totally Disabled” because of a condition as
of a certain date, have a period of recovery thereafter, and then return to a “Totally Disabled”
state due to that same condition. Read together, they lay out specific conditions for when two
instances of leave related to the same condition will constitute separate “Total Disabilities.”
First, the “Recurrent Disability” provision establishes that “[i]f, after a period of Total Disability
for which benefits are payable, an Insured returns to Active Work for at least six (6) consecutive
months, any recurrent Total Disability for the same or related cause will be part of a new period
of Total Disability,” provided the insured completes a new 180-day elimination period. (Admin.
R., R. 42-1 at PageID #748.) But “[i]f an Insured returns to Active Work for less than six
(6) months, a recurrent Total Disability for the same or related cause will be a part of the same
Total Disability. A new Elimination Period is not required.” (Id.) When considered alongside

         10
           Defendant suggests that McKay is also controlling on this point. We disagree. As discussed herein,
McKay applied a more generous arbitrary and capricious standard of review to the plan administrator’s
determination. 428 F. App’x at 540–41. More importantly, the defendant in McKay was found to have been totally
disabled prior to the group policy’s effective date in large part because he did not work after that date. Id. at 545.
By contrast, Plaintiff returned to work following January 1, 2013.
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                       Page 19

the first sentence, it is clear that this latter portion of the provision also applies only when an
insured person has completed an initial elimination period and thus had “a period of Total
Disability for which benefits are payable.” (See id.)

       The second provision overlooked by the district court applies to employees who do not
complete a full elimination period during their first leave, making them ineligible for benefits
during that period. In that case, the plan document provides for an “Interruption Period” for
those who, “during the Elimination Period, . . . return[] to Active Work for less than 30 days,” in
which case “the same or related Total Disability will be treated as continuous.” (Id. at #739.)
By implication, the converse of this provision is also true—that is, if an employee returns to
work for thirty days or more before completing the elimination period, her second period of
disability will be considered a new “Total Disability.”

       To resolve the question of whether Plaintiff met this third criterion, then, it is necessary
to determine whether Plaintiff’s two leaves created two separate periods of “Total Disability”
under the plan document. Plaintiff returned to work from April 7, 2013 to May 12, 2013. (Id. at
##762, 798.) This is less than the six-month return required to create a new period of “Total
Disability” under the “Recurrent Disability” provision applicable to those who were out on their
initial leave through the elimination period. Still, it is more than the less-than-thirty-day return
that means a second period of leave would be treated as part of the same “Total Disability” under
the “Interruption Period” provision applicable to those who were not out on leave through the
elimination period.

       The district court did not make any findings of fact as to whether Plaintiff completed the
elimination period during her first leave. Assuming, without deciding, that Plaintiff’s “Total
Disability” began on the date that she began her initial leave, the parties have argued two
possible dates for the start of her elimination period: October 8, 2012 and October 12, 2012. If
Plaintiff’s leave began October 8, she was out of work for 181 days before returning on April 7,
2013 and thus completed the elimination period. If her leave began October 12, she was out of
work for 177 days and did not complete the elimination period. In the parties’ initial pleadings
before the district court, Plaintiff contended that she left work on October 8, (Am. Compl., R. 16
at PageID #155), and Defendant argued that she left work October 12, (Def.’s Answer Am.
 No. 18-2316                 Wallace v. Oakwood Healthcare, et al.                      Page 20

Compl., R. 38 at PageID #698). On appeal, they switch positions. (Pl. Br. at 39; Def. Br. 11,
29.) Given the conflicting evidence and arguments on this point, we think it appropriate to
afford the parties the opportunity to argue this issue on remand.

       As to whether the Plaintiff was disabled after departure for her second leave, we partially
agree with the district court’s finding that she was. The record indicates that Plaintiff was
“Totally Disabled” beginning on May 13, 2013 through at least May 27, 2014. The record is
replete with evidence of Defendant’s disability during this time. Plaintiff’s attending physician,
Dr. Michaele Oostendorp, D.O., provided a statement indicating that Plaintiff was totally
disabled between May 13, 2013 and July 24, 2013. (Admin. R., R. 42-1 at PageID #827.) In
July 2013, Dr. Opada Alzohaili attested that Plaintiff had “continued symptoms and possible
immune system compromise related to medications” and advised that her medical leave should
be continued through October 16, 2013. (Id. at ##838–39, 847.) As of a November 13, 2013
appointment, Kristi Tesarz, a physician’s assistant working with Dr. Oostendorp, (id. at #850),
assessed Plaintiff as having tachycardia, asthma, hyperlipidemia, vitamin B-12 and
D deficiencies, hypothyroidism, osteopenia, glucocorticoid deficiency, obstructive sleep apnea,
anxiety, and shingles, (id. at #860.) On January 28, 2014, Dr. Oostendorp reported similar issues
and that, due to her medications, Plaintiff was immunosuppressed. (Id. at #850.) Oostendorp
concluded that Plaintiff’s current position “would cause a danger to herself,” and that Plaintiff
“is unable to work due to her immunosuppressed state.” (Id.) On May 27, 2014, Kristi Tesarz
completed a questionnaire indicating that Plaintiff could not stand, sit, walk, or drive over the
course of an eight-hour workday; could not perform simple grasping, pushing or pulling, or fine
manipulation; and could not bend, squat, climb, reach above her shoulder, kneel, crawl, use her
feet, drive, or carry any significant weight. (Id. at #888.) Tesarz indicated that Plaintiff would
likely not achieve maximum medical improvement for over sixteen months, the longest time
frame she could indicate, through September 27, 2015. (Id.)

       This evidence demonstrates that Plaintiff was totally disabled in that she “could not
perform the material duties of [her] Regular Occupation” from May 13, 2013 through at least
May 27, 2014. (See id. at #740.) However, the facts before us are again insufficient to allow us
to determine that Plaintiff was totally disabled beyond May 27, 2014. Tesarz’s attestation that
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                        Page 21

Plaintiff would be totally disabled through September 27, 2015 is apparently based on projection,
rather than actual evidence. Finding total disability beyond May 27, 2014 on this basis would be
error, and further factfinding is therefore also necessary on this issue on remand.

        C. Pre-Existing Conditions Limitation Credit

        Defendant contends that even if Plaintiff is covered under the plan document’s transfer of
insurance provision, the pre-existing conditions limitation still applies, unless Plaintiff meets the
terms of the pre-existing conditions limitation credit. We agree. That provision states that “[i]f
an employee is an Eligible Person on the Effective Date of this Policy, any time used to satisfy
the Pre-existing Conditions Limitation of the prior group long term disability insurance plan will
be credited towards the satisfaction of the Pre-existing Conditions Limitation of this Policy.”
(Id. at #742.) Our previous analysis as to whether Plaintiff was an eligible person also applies
here.   Thus, the applicability of this provision turns on whether Plaintiff was a full-time
employee. If so, this provision applies, and her time used to satisfy any pre-existing conditions
limitation of the Hartford policy should be credited towards the twelve months of work she was
required to perform after her effective date of insurance in order to avoid the application of the
pre-existing conditions limitation. (Id. at #751 (requiring that Plaintiff be “Actively at Work for
one (1) full day following the end of twelve (12) consecutive months from the date he/she
became an Insured” for provision not to apply).) But the district court also made no factual
finding as to how much time Plaintiff had earned under Hartford’s pre-existing conditions
limitation, which required a participant to work for Oakwood for a year before she could avoid
its application. (Am. Compl., Ex. 2, R. 16-2 at PageID #187.) While we note that Plaintiff had
been employed with Oakwood continuously during at least two years when Hartford insured the
plan, we think it appropriate to allow the district court to consider this question in the first
instance. (Id. at #176; Admin. R., R. 42-1 at PageID ##768, 824.)

        Thus, while we find that Plaintiff may have been covered under the transfer of insurance
and pre-existing conditions limitation credit provisions, the facts before us do not permit us to
make a definitive finding that she was. Accordingly, further factfinding is required as to the
following points: (1) when Plaintiff began receiving medical treatment for her condition;
(2) whether Plaintiff was a full-time employee required to work more than thirty hours during
 No. 18-2316                 Wallace v. Oakwood Healthcare, et al.                       Page 22

her regular work week; (3) whether Plaintiff was insured with Hartford as of the date of transfer;
(4) whether Plaintiff’s initial leave lasted through the elimination period; (5) whether Plaintiff
remained totally disabled after May 27, 2014; and (6) what credit Plaintiff had earned under
Hartford’s pre-existing conditions limitation.     Accordingly, we vacate the district court’s
judgment on the record and remand for further factfinding on these six questions. On remand,
the district court may make what additional findings of fact it can based on the administrative
record, but it may not look beyond the administrative record. Hoover, 390 F.3d at 809. If the
district court remands the case to the plan administrator, in view of the court’s familiarity with
the record, it may wish to retain jurisdiction over future proceedings should the case
subsequently return. See, e.g., Bowers v. Sheet Metal Workers’ Nat’l Pension Fund, 365 F.3d
535, 537 (6th Cir. 2004).

III.   Award of Benefits
                                       Standard of Review

       This Court reviews a district court’s determination of a remedy in an ERISA action for
abuse of discretion. Javery, 741 F.3d at 699. “[A]n abuse of discretion exists only when the
court has the definite and firm conviction the district court made a clear error of judgment in its
conclusion upon weighing relevant factors.” Shelby County Health Care Corp. v. Majestic Star
Casino, 581 F.3d 355, 376 (6th Cir. 2009) (alteration in original) (quoting Gaeth v. Hartford Life
Ins. Co., 538 F.3d 524, 529 (6th Cir. 2008)).

                                             Analysis

       For the same reasons that we vacate the district court’s grant of judgment on the record to
Plaintiff, we vacate its award of benefits. The district court abused its discretion by granting
Plaintiff LTD benefits without conducting further factfinding to ensure that the transfer of
insurance provision indeed applied. It further abused its discretion by calculating Plaintiff’s
benefits without further conducting factfinding regarding her dates of disability.
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                       Page 23

IV.    Award of Attorneys’ Fees
                                       Standard of Review

       “This Court reviews a district court’s decision to award attorney fees in an ERISA action
for abuse of discretion.” Shelby County Health Care Corp., 581 F.3d at 376. As before, “[a]n
abuse of discretion exists only when the court has the definite and firm conviction the district
court made a clear error of judgment in its conclusion upon weighing relevant factors.” Id.
(quoting Gaeth, 538 F.3d at 529).

                                             Analysis

       In this opinion, we vacate much of the district court’s prior decision as to Plaintiff’s
eligibility for LTD benefits. Our decision is not necessarily inconsistent with an award of
attorneys’ fees. See Hardt v. Reliance Standard Life Ins. Co, 560 U.S. 242, 250, 255–56 (2010)
(a party need not be the “‘prevailing party’ to be eligible for an attorney’s fees award,” but must
have achieved “some success on the merits”). However, our determinations on appeal may
change the district court’s ultimate conclusions as to several of the factors considered in
awarding attorneys’ fees. See Sec’y of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985); see also
O’Callaghan v. SPX Corp., 442 F. App’x 180, 186 (6th Cir. 2011) (finding the King factors still
applicable after the Supreme Court’s decision in Hardt, 560 U.S. at 242). Accordingly, we think
it appropriate to allow the district court to consider that award anew, with this Court’s opinion to
inform it.

       On remand, the district court may find that Plaintiff is still entitled to attorneys’ fees.
Should it so decide, we do not dispute that it could find that its initial fee award was
“reasonable.” See Reed v. Rhodes, 179 F.3d 453, 471 (6th Cir. 1999). “[T]he starting point” for
determining what attorneys’ fees are reasonable is “a ‘lodestar’ calculation—the product of the
number of hours reasonably spent on the case by an attorney times a reasonable hourly rate.”
Moore v. Freeman, 355 F.3d 558, 565 (6th Cir. 2004).

       The district court did not abuse its discretion in determining Plaintiff’s counsel’s hourly
rate here. Courts look to the “prevailing market rate in the relevant community”—or “that rate
which lawyers of comparable skill and experience can reasonably expect to command within the
 No. 18-2316                  Wallace v. Oakwood Healthcare, et al.                       Page 24

venue of the court of record”—to determine a reasonable hourly billing rate. Adcock-Ladd v.
Sec’y of Treasury, 227 F.3d 343, 350 (6th Cir. 2000). The court cited Plaintiff’s attorney John
Conway’s approximately two decades’ worth of experience and specialty in employment law,
and found that his hourly rate of $395 was reasonable in light of the State Bar of Michigan’s
findings that the 75th and 95th percentile hourly rates of attorneys at similar levels of experience
are between $325 and $475 an hour, and in similar specialties between $380 and $485 an hour.
(Op. & Order, R. 69 at PageID #1580 (citing Economics of Law Practice in Michigan, State Bar
of Mich. 8–9 (2018)).) It also correctly cited a recent fee award in an ERISA action to support its
conclusion that a $125 hourly rate for a legal assistant is reasonable. (Id. (citing Leonhardt v.
ArvinMeritor, Inc., No. 04-72845, 2008 WL 11399537, at *2 (E.D. Mich. Oct. 10, 2008)
(collecting cases)).)

       The district court’s approval of the number of hours Plaintiff’s attorneys spent on this
case also was not an abuse of discretion. Given the number of filings made in this case,
Plaintiff’s counsel’s total hours were reasonable, and the district court appropriately deducted
fees for hours expended to review the administrative record. (Id. at ##1580–81.) Likewise, the
district court correctly found that block billing is permissible in this Circuit, “provided the
description of the work is adequate.” (Id. at #1581 (citing Smith v. Serv. Master Corp., 592 F.
App’x 363, 371 (6th Cir. 2014)).) The district court did not abuse its discretion in finding that
Plaintiff’s counsel’s billing provided sufficient detail regarding the tasks performed. (See Supp.
Stmt., Ex. 1, R. 64-2 at PageID ##1478–86.) Plaintiff’s counsel’s records detail the documents
they reviewed and drafted, what research they conducted, what conversations they had internally
and externally, and other relevant matters. This is sufficient detail. Defendant’s reliance on out-
of-circuit case law to suggest otherwise is unavailing.

                                         CONCLUSION

       For the reasons set forth above, we AFFIRM the district court’s denial of Defendant’s
motion to dismiss on the basis of exhaustion. Because further factfinding is necessary to
determine whether Plaintiff was eligible for LTD benefits and in what amount, we VACATE the
district court’s grant of judgment on the record to Plaintiff, as well as its award of LTD benefits
and attorneys’ fees, and REMAND for further proceedings consistent with this opinion.
 No. 18-2316                   Wallace v. Oakwood Healthcare, et al.                          Page 25

                                        _________________

                                         CONCURRENCE
                                        _________________

        THAPAR, Circuit Judge, concurring. It is troubling to have no better reason for a rule of
law than that the courts made it up for policy reasons. Yet that seems to be the case with
ERISA’s exhaustion requirement. Federal courts should reconsider when—or even whether—
it’s legitimate to apply this judge-made doctrine.

        Here are some (hopefully uncontroversial) first principles. Congress, not the judiciary,
has the power to “prescribe[] the rules by which the duties and rights of every citizen are to be
regulated.” The Federalist No. 78, at 523 (Alexander Hamilton) (J. Cooke ed., 1961). Congress
exercises this power by enacting texts, which become our laws. Outside of legislation, people
can also change their rights and duties by making contracts. But when courts stray from the texts
of these laws or the terms of these contracts, they wield power that is not rightly theirs.

        It’s hard to square these principles with the ERISA exhaustion doctrine. Or at the very
least, with the way courts talk about the doctrine. One circuit has described it as “a judicial
innovation fashioned with an eye toward ‘sound policy.’” Metro. Life Ins. Co. v. Price, 501 F.3d
271, 279 (3d Cir. 2007) (quoting Amato v. Bernard, 618 F.2d 559, 567 (9th Cir. 1980)). Another
has said it’s “a court-imposed, policy-based requirement.” Watts v. BellSouth Telecomms., Inc.,
316 F.3d 1203, 1207 (11th Cir. 2003). But employees’ benefit rights should not depend on “a
hazy body of policy choices that courts are free to ‘discover.’” Island Creek Coal Co. v. Bryan,
937 F.3d 738, 746 (6th Cir. 2019). They should just depend on (1) the statute Congress enacted
and (2) the plan documents they or their employers agreed to.

        We know this not only from first principles but also because Congress said so. ERISA
gives an employee a federal cause of action “to recover benefits due to him under the terms of
his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). As the text makes triply plain, this
kind of claim “stands or falls by ‘the terms of the plan.’” Kennedy v. Plan Adm’r for DuPont
 No. 18-2316                   Wallace v. Oakwood Healthcare, et al.                      Page 26

Sav. & Inv. Plan, 555 U.S. 285, 300 (2009). The statute is the procedural scaffolding, the plan
documents the source of substantive rights.

       Where does exhaustion enter this picture? The statute itself is “silent” about it. Coomer
v. Bethesda Hosp., Inc., 370 F.3d 499, 504 (6th Cir. 2004). ERISA requires plans to offer fair
and reasonable internal-review procedures for claims they deny. 29 U.S.C. § 1133(2). But the
statute nowhere says claimants must take advantage of those procedures as a precondition to
enforcing their rights in court.

       Even so, the circuit courts have “uniformly” enforced an exhaustion defense. Heimeshoff
v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 105 (2013). The doctrine got its start back in an
era of unabashed purposivism, and the two leading cases show it. They based the exhaustion
requirement mainly on policy judgments, legislative-history tea-reading, and an unexplained
analogy to the Taft-Hartley Labor Management Relations Act. See Amato, 618 F.2d at 566–68;
Taylor v. Bakery & Confectionary Union & Indus. Int’l Welfare Fund, 455 F. Supp. 816, 819–20
(E.D.N.C. 1978). It should bother us that such a ubiquitous doctrine, one that has thwarted many
an employee’s efforts to enforce his benefit rights, rests on such shaky foundations. Maybe there
are better arguments waiting to be made. But if there are, they’ve been waiting a long time.

       Of course, even if the statute doesn’t require exhaustion, a plan’s documents may require
it as a precondition of going to court. But sometimes they don’t. Here, for example, the
Reliance Policy not only fails to mention an exhaustion requirement but also fails to describe
internal-review procedures at all. Reading this policy, it’s hard to see what would put an
employee on notice that she could lose her benefit rights by failing to appeal the denial of her
claim. Where both the statute and the plan documents are silent about any duty to exhaust, we
should think twice about whether requiring exhaustion is legitimate.

       Because the majority opinion faithfully applies existing law, I join it in full.