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Soich v. Aetna life Insurance Co.

United States District Court, D. Oregon

February 2, 2017

MIROSLAV SOICH, Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY, Defendant.

          Miroslav Soich, Pro se.

          Sarah N. Turner and Matthew G. Kleiner, Gordon & Rees LLP, Attorneys for Defendant.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          MICHAEL H. SIMON, DISTRICT JUDGE.

         Plaintiff Miroslav Soich (“Plaintiff”), proceeding pro se, brings this action to challenge the denial by Defendant Aetna Life Insurance Company (“Aetna” or “Defendant”) of Plaintiff's claims requesting reimbursement of funds from a Health Care Spending Account (“HCSA”). The HCSA plan is governed by the Employee Retirement Income Securities Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq. After a bench trial on an administrative record held on January 28, 2017, the Court concludes that Plaintiff is not entitled to the requested reimbursements.

         STANDARDS

         When the terms of an ERISA plan unambiguously provide the administrator with discretion to determine eligibility for benefits or to construe the terms of the plan, the administrator's denial of benefits is subject to review for abuse of discretion. Pac. Shores Hosp. v. United Behavioral Health, 764 F.3d 1030, 1040 (9th Cir. 2014) (citing Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 962 (9th Cir. 2006) (en banc)); Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 673 (9th Cir. 2011) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). If there are procedural irregularities or if an administrator operates under a conflict of interest, the court considers the irregularities or conflict as a factor in determining whether there has been an abuse of discretion. Pac. Shores Hosp., 764 F.3d at 1040; see Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 965 (9th Cir. 2006) (concluding that an insurer that acts as “both the plan administrator and the funding source for benefits operates under what may be termed a structural conflict of interest”). An administrator abuses its discretion if “it renders a decision without any explanation, construes provisions of the plan in a way that conflicts with the plain language of the plan, or fails to develop facts necessary to its determination.” Pac. Shores Hosp., at 1042 (quoting Anderson v. Suburban Teamsters of N. Ill. Pension Fund Bd. of Trustees, 588 F.3d 641, 649 (9th Cir. 2009)). An administrator also abuses its discretion if it relies on clearly erroneous findings of fact in making benefit determinations. Id.

         “A claimant may bear the burden of proving entitlement to ERISA benefits. This rule makes sense in cases where the claimant has better-or at least equal-access to the evidence needed to prove entitlement.” Estate of Barton v. ADT Sec. Servs. Pension Plan, 820 F.3d 1060, 1065-66 (9th Cir. 2016) (distinguishing cases where the claimant has at least equal access to the necessary evidence from “other contexts, [where] the defending entity solely controls the information that determines entitlement, leaving the claimant with no meaningful way to meet his burden of proof”); cf. Muniz v. Amec Const. Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010) (holding that where a court reviews a plan administrator's decision de novo, the claimant has the burden of proof). See also 2 ERISA Practice and Litigation § 11:68 (“Because the outcome of ERISA actions commonly turns on discovery, it is well for litigants to be mindful of the principle set forth in 2 McCormick on Evidence (4th ed.) § 337: ‘Where the facts with regard to an issue lie peculiarly in the knowledge of a party, that party has the burden of proving the issue.'”). The “burden” in a civil case involves two elements: the burden of going forward with proof (the burden of “production”) and the burden of persuading the trier of fact (the burden of “proof”). Lew v. Moss, 797 F.2d 747, 751 (9th Cir. 1986) (citations omitted).

         ERISA provides that “a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1). The Supreme Court has held that an “administrator's fiduciary responsibility under ERISA is simply stated.” Pegram v. Herdrich, 530 U.S. 211, 223 (2000). “[F]iduciaries shall discharge their duties with respect to a plan ‘solely in the interest of the participants and beneficiaries, ' that is, “for the exclusive purpose of (i) providing benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of administering the plan.” Id. at 223-24 (quoting 29 U.S.C. § 1104(a)(1)(A)). “The administrator's duty is to see that the plan is ‘maintained pursuant to [that] written instrument.'” Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S.Ct. 604, 612 (2013) (brackets in original) (quoting 29 U.S.C. § 1102(a)(1)). “This focus on the written terms of the plan is the linchpin of ‘a system that is [not] so complex that administrative costs, or litigation expenses, unduly discourage employers from offering [ERISA] plans in the first place.'” Id. (quoting Varity Corp. v. Howe, 516 U.S. 489, 497 (1996)).

         Nothing in the text of ERISA requires a participant or beneficiary to exhaust administrative remedies in order to bring an action under § 502 of ERISA, 29 U.S.C. § 1132. Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008). The Ninth Circuit, however, “long ago concluded that ‘federal courts have the authority to enforce [a plan's] exhaustion requirement in suits under ERISA, and that as a matter of sound policy they should usually do so.'” Id. (quoting Amato v. Bernard, 618 F.2d 559, 568 (9th Cir.1980)). Accordingly, courts in this circuit consistently hold that before bringing suit under § 502, an ERISA plaintiff claiming a denial of benefits “must avail himself or herself of a plan's own internal review procedures before bringing suit in federal court.” Id. (quoting Diaz v. United Agric. Employee Welfare Benefit Plan & Trust, 50 F.3d 1478, 1483 (9th Cir.1995). Accordingly a claimant's cause of action under ERISA “does not accrue until the plan issues a final denial.” Heimeshoff, 134 S.Ct. at 610.

         Similarly, ERISA does not contain its own statute of limitations for suits to recover benefits under 29 U.S.C. § 1132(a)(1)(B). Wise v. Verizon Commc'ns, Inc., 600 F.3d 1180, 1184 (9th Cir. 2010). “Absent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable.” Upadhyay v. Aetna Life Ins. Co., 2014 WL 186709, at *5 (N.D. Cal. Jan. 16, 2014), aff'd, 645 F.App'x 569 (9th Cir. 2016) (quoting Heimeshoff, 134 S.Ct. at 610). The contractual limitations period begins to run as defined by the plan's terms. Id. (citing Mogck v. Unum Life Ins. Co. of Am., 292 F.3d 1025, 1028 (9th Cir.2002)); see Heimeshoff, 134 S.Ct. at 611 (explaining that parties may contractually agree to “not only to the length of a limitations period but also to its commencement”).

         FINDINGS OF FACT

         1. Plaintiff is a former employee of the Federal Home Loan Mortgage Company (“Freddie Mac”) and was voluntarily enrolled in a Health Care Savings Account Plan (the “plan”) for years 2011 and 2012, and from January 1, 2013, until August 1, 2013. AR 30, 72-77, 134, 136, 138, 140, 142, 144, 160-61, 163-64. The plan allows eligible employees to set aside money in an HCSA to draw from when they incur eligible health care expenses as defined by the Internal Revenue Service. AR 3, 34, 87. During the relevant period, Freddie Mac was the plan administrator and Defendant was the benefit, claims, and appeals administrator (collectively, the “Claim Administrator”). AR4-6, 35, 36, 88, 90; Aguilera Declaration ¶ 4. As the Claim Administrator, Defendant is the “fiduciary with absolute and sole discretion” in the administration of benefits, resolution of claims, and review and resolution of appeals. AR 4-5, 35, 88. Defendant also has full discretion and sole authority to “[i]nterpret the Plan” and “[d]ecide the amount, form and timing of benefits payments.” AR 22, 53, 106.

         2. As relevant here, Defendant's HCSA summary plan descriptions (the “Plan Descriptions") provide that to receive reimbursement for an eligible health care expense, a claimant must timely submit a claim form with attached “[p]roof of payment (a receipt and a copy of the explanation of benefits statement you receive from an insurance plan, carrier or claims administrator).” Aguilera Decl. ¶6; AR 14-15, 98-99. According to Defendant's claim submission guidelines, when a claimant submits an itemized receipt, the receipt must include, among other information, the date or dates of service, type of service, and, if applicable, prescription names. AR 88. The Plan Descriptions also state in several places that “[c]laims must be received by Aetna before the Claims Deadline of March 31 in order to be eligible for reimbursement. It is your responsibility to ensure that your claims are received by Aetna by close of business on March 31 of the following year.” ECF 23, Ex. 1 (2011 Plan Description p. 3); ECF 23, Ex. 2 (2013 Plan Description p. 3); AR 3 and 34. (emphasis in original). If March 31st does not fall on a business day, claims are due the first business day after March 31. AR 10, 41; Ex. 1, p. 10; Ex. 2, p. 10. The Plan Descriptions further provide that “[t]here are no exceptions made to this deadline.” Ex. 1, at 5; Ex. 2 at 5; AR 5, 36 (emphasis in original).

         3. The Plan Descriptions also require that a claimant submit an appeal within 180 calendar days of the claimant's receipt of an initial denial. The Plan Descriptions further provide that a claimant may file a lawsuit to dispute denied claims “only after you have exhausted the HCSA Plan's claims and appeals procedures as described in the Administration section of this document.” AR 16-17, 21, 47, 48, 51, 52, 100, 101, 105. The Plan Descriptions also state that “[n]o ...


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