Court Opinion

ID: 8412749
Source: CourtListenerOpinion
Date Created: 2022-11-02 19:55:04.213383+00
Date Added: 2024-06-11T16:47:59.140581
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring in part and dissenting in part.
I agree with the court’s unanimous disposition of the statutory-damages issue and with Part II.A, which concludes that the controversy is live. I also join Part II.C of Judge Manion’s opinion, which demonstrates that the suit fails on the merits. I offer two additional thoughts.
First, I agree with Judge Posner that it would be best to apply contract principles. In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court started with fiduciary principles drawn from trust law because the claims asserted there involved discretionary decisions by plans’ fiduciaries. ERISA says that “a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan ... or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.” 29 U.S.C. § 1002(21)(A). The claims in this litigation do not entail discretion in management or implementation; to the contrary, plaintiff asserts and the majority holds that Concert Health lacked discretion. Applying the principles of contract law, perhaps informed by any specific doctrines developed in the law of health insurance contracts, would promote certainty and comparability between health care provided as a fringe benefit of employment and other medical coverage.
Second, an approach such as the majority’s can make participants worse off. They value the opportunity to obtain prompt oral advice about eligibility for benefits. Some participants will lack ready (or any)- access to online databases of providers or description of a plan’s benefits. Conditions of coverage may be hard to understand. See, e.g., Kenseth v. Dean Health Plan, Inc., 722 F.3d 869 (7th Cir.*6782013). And printed lists of in-network providers may be bulky and go out of date. Thus oral advice can be a boon to participants.
Yet oral exchanges often are imprecise. The representative must answer off the cuff, often with inadequate information. The participant may misunderstand, misremember, or dissemble about the content of the conversation when, years later, a question arises about who said what. Litigation will be one-sided. James Killian asserts that particular things were said; the representatives at the other end of the phone, even if they could be identified, would not recall the conversations.
Problems of memory and veracity could be addressed by recording everything and keeping the recordings for however long the statute of limitations lasts, though it might be hard to find a particular call in many thousand hours of oral exchanges. But the fact that immediate answers to vague questions will be imprecise, and occasionally inaccurate, cannot be fixed by better record-keeping. Under the majority’s approach, any inaccuracy — and any failure to be helpful by answering questions the participants should have asked, but didn’t — imposes liability on the plan, even if the question is so vague that the telephone representative does not get its gist.
That legal rule will induce some, perhaps many, healthcare plans to take steps for self-protection. One possibility would be to stop giving oral advice. Since that advice can be valuable, and usually is accurate, participants would be worse off. A second possibility would be to give oral advice, pay up when errors occur, and cover that cost by reducing the benefits provided by the plan. Participants might not welcome that approach either. Still another possibility would be to alert participants that no oral advice could be relied on. A plan might say something like: “Our web site has a database of in-network providers and details about which medical procedures are covered. If the online resource is insufficient, or if you need advance permission for a procedure, you may send us a letter or email; we will answer in writing, and you can rely on that response. We also offer telephonic advice and information but do not warrant its accuracy, and you use it at your own risk.” Would this approach help participants? I doubt it. Perhaps my colleagues would hold that ERISA disallows telling participants that they can’t rely on oral advice. That would induce plans to close their telephonic hotlines, a step sure to injure participants. Today’s decision will push employers and their plans’ administrators in that regrettable direction.