Opinion

Syrstad v. NECA-IBEW Welfare Trust Fund

Court: District Court, C.D. Illinois
Filed: Aug 21, 2024
Cited by: 0 cases
Authority: More cited than 33.4%

The opinion

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF ILLINOIS

Urbana Division

JACQUELINE SYRSTAD, et al.,

Plaintiffs,

v. Case No. 23-2088

NECA-IBEW WELFARE TRUST

FUND,

Defendant.

REPORT & RECOMMENDATION

Before the Court is the Partial Motion to Dismiss Plaintiff’s Complaint (#29) filed

by Defendant NECA-IBEW Welfare Trust Fund (“the Fund,” “the Plan,” or “Defendant”).

Plaintiffs Jacqueline Syrstad (“Syrstad”) and Natalie Wenninger (“Wenninger,” and with

Syrstad, “Plaintiffs”) filed a Response (#33) in opposition. For the reasons discussed

below, the Court recommends that Defendant’s Partial Motion to Dismiss (#29) be

GRANTED in part and DENIED in part.

I. Background

According to the Amended Complaint’s allegations, the Plan is a self-insured

employee benefit plan established by the National Electrical Contractors Association

(“NECA”) and the International Brotherhood of Electrical Workers (“IBEW”) to provide

medical benefits to NECA-IBEW employees, members, and their beneficiaries. Plaintiffs

are beneficiaries of the Plan. Plaintiffs bring this lawsuit pursuant to the Employee

Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., and allege four main

violations of ERISA.

First, Plaintiffs allege Defendant failed to properly calculate the Allowable Charge

for medical services Plaintiffs received and thus wrongfully denied or underpaid claims

for those services. Second, Plaintiffs allege Defendant failed to provide the necessary

explanation for its benefit determination. Third, Plaintiffs allege Defendant failed to

explain which method it used to calculate the Allowable Charge for out-of-network

services. Finally, Plaintiffs allege Defendant materially changed the Summary Plan

Document’s reimbursement terms without amending it or providing notice to Plan

participants.

Before this case was transferred to this Court, the Wisconsin District Court

dismissed Plaintiff’s original Complaint without prejudice. The Wisconsin District Court

noted:

In the present case, the plaintiffs’ complaint presents a “fair notice” problem

rather than a “plausibility” problem because the plaintiffs have not

adequately identified their claims for relief.

The essential problem is that, because the plaintiffs each received treatment

… on multiple occasions over a period of years … they each potentially

have many separate claims against the Plan—one claim for each date of

service or bill—but they have not identified the claims for which they are

seeking relief in this action.

***

Further, the plaintiffs bring separate claims based on alleged deficiencies in

EOBs and appeal determinations, but, with one exception, they do not

identify the specific EOBs or appeal determinations at issue. Each

individual EOB and appeal determination potentially gives rise to a

separate claim for relief, so unless the plaintiffs identify the ones for which

they are seeking redress, the complaint cannot satisfy the fair notice

requirement.

***

The complaint’s allegations concerning a Plan modification or reduction in

benefits are also deficient. The gist of this claim seems to be that because the

plaintiffs believe that the Plan has paid less for NEA’s services than it paid

“to other providers in the past for similar services,” the Plan must have

modified its practices at some point in time. (Compl. ¶ 58.) But the

complaint does not allege the approximate time frame in which the

plaintiffs noticed a difference in reimbursement levels or allege when the

plaintiffs believe that a Plan modification occurred. It is not even clear

whether the plaintiffs think that the modification occurred prior to 2016,

when the plaintiffs first received services from NEA, or whether they think

that it occurred at some point during the multi-years periods in which they

received treatment. The Plan cannot be expected to investigate these vague

allegations about a modification that the plaintiffs subjectively believe

occurred at some unknown moment in time.

***

For these reasons, I will dismiss the complaint with leave to amend. In their

amended complaint, the plaintiffs should take care to make clear what their

claims are. Are they seeking benefits for services rendered as long ago as

February 2016, or are they seeking benefits only for more recent treatment

by NEA? What EOBs and appeal letters were deficient, and what remedy

do the plaintiffs seek in connection with those EOBs and appeal letters?

When did the alleged Plan modification occur? Once the plaintiffs file a

complaint that clearly identifies their claims, the Plan may renew its motion

to dismiss. I note that the Plan’s current motion argues that certain claims

fail as a matter of law. I have not addressed these arguments because I do

not believe it makes sense to do so until the plaintiffs clearly identify their

actual claims.

(Order, #25 at 10-13).

Subsequently, Plaintiffs filed their Amended Complaint.

A. Facts

The facts are drawn from Plaintiffs’ Amended Complaint and are accepted as true

for purposes of this Order. Olson v. Champaign Cty., Ill., 784 F.3d 1093, 1095 (7th Cir. 2015).

The Fund is administered by a joint labor-management Board of Trustees and is a

medical employee benefit plan governed by ERISA. The Fund, as the Plan Administrator,

is the named fiduciary of the Plan. The Plan Administrator, through the Board of

Trustees, exercises discretionary authority and control over administering the Plan and

managing and disposing Plan assets, and has the final discretionary authority to

determine eligibility for Plan benefits and to interpret and construe the Plan’s terms. At

all times relevant to this action, Plaintiffs were Plan beneficiaries, as eligible employees

and/or members and participants under the Plan.

Plaintiffs allege the Plan terms that apply to their claims appear in the 2013

Summary Plan Description (“SPD” or “Plan Document”), which they attached to their

original Complaint and incorporate into their Amended Complaint by reference. The

2013 SPD provides that Plan participants and beneficiaries can receive services from an

out-of-network provider, meaning a health care provider who has not entered into an

agreement with the Plan or the Plan’s third-party administrator. Plan participants and

beneficiaries will be responsible for any charge for a service rendered by an out-of-

network provider that is more than the Plan pays for that service. An out-of-network

provider can “balance bill” the member for the difference between the billed charges and

the amount the Plan pays.

The claims at issue relate to medical services Plaintiffs received from

Neurosurgery and Endovascular Associates, S.C. (“NEA”), which were submitted on

Plaintiffs’ behalf for reimbursement to the Fund. NEA is a medical provider that

specializes in neurosurgery. NEA is an out-of-network provider, meaning that it does not

have a contract with the Plan or its third-party administrator.

According to the Plan, it pays an out-of-network provider’s “Allowable Charge.”

The 2013 SPD defines an “Allowable Charge” as follows:

Allowable Charge:

 With respect to a network (PPO) provider, the term “Allowable Charge”

is the negotiated fee/rate set forth in the agreement with the

participating network professional provider, facility or organization

and the Plan.

 With respect to an out-of-network (non-PPO) provider, the “Allowable

Charge” means the amount determined by the Board of Trustees that

the Plan will pay for a particular service or supply, as determined by the

organization with which the Fund contracts to make such a

determination. Under no circumstances will the Plan pay an Allowable

Charge for out-of-network services or supplies that is determined by

any provider, facility or other person or organization other than the

Board of Trustees, or organization designated by the Board of Trustees.

 The Board of Trustees has determined Allowable Charge to mean the

amount most consistently charged by a licensed physician or other

professional provider for a given service. An Allowable Charge refers to

a charge that is within the range of usual charges for a given service

billed by most physicians or other professional providers with similar

training and experience in a given geographic area. When considering

the range of usual charges, the Plan may consider discounted rates

allowed by network providers as a basis for Allowable Charges.

(#1, Ex. 1 at 14).

The 2013 SPD also provides:

 Coinsurance: Once you or your dependents meet the Deductible, the

Plan pays a percentage of Covered Medical Expenses and you pay the

rest. Benefits are paid based on Allowable Charges for the duration of

an Injury or Sickness. The Coinsurance percentage the Plan pays varies

depending on whether you use a PPO or non-PPO provider. If you or

your dependent use a:

• PPO provider, the Plan pays 90% of Allowable Charges, which

requires you to pay the remaining 10% of Covered Medical

Expenses, up to the Out-of-Pocket Maximum; or

• Non-PPO provider, the Plan pays 75% of Allowable Charges,

which requires you to pay the remaining 25% of Covered Medical

Expenses, up to the Out-of-Pocket Maximum.

(#1, Ex. 1 at 39-40).

Plaintiffs allege that, using the “Allowable Charge” methodology described above,

the Plan must collect and maintain records of provider charge information by area and

reimburse charges consistent with its records. Plaintiffs allege that using a third-party’s

data alone, without the Board of Trustees independently verifying and inquiring as to

whether the third-party’s data is consistent with the Plan, violates the 2013 SPD language.

Plaintiffs allege that the out-of-network charges for similar services in the area in which

NEA is located are generally around the 90th percentile of the FAIR Health database.

Plaintiffs provide the following table, asserting that it includes the NEA-rendered,

services to Wenninger and Syrstad that are at issue in this lawsuit, as well as the

respective billed amounts for those services, and the Fund’s payment of those amounts

(the “Allowed” column, or the “Amount Paid” column):

Wenninger:

Date of Procedure Code Medical Condition1 Claim Billed Allowed

Service No.

1 These medical condition descriptions have been redacted because they include Protected Health

Information. However, the parties or their counsel possess the redacted information in an unredacted

format.

2/2/2017 99214 $396.00 $158.00

2/3/2017 72148 - TC GZP251 $2,093.00 $441.00

3/2/2017 72141-TC HBC310 $2,573.00 $407.00

3/2/2017 99214 $396.00 $158.00

4/10/2017 99213 $241.00 $106.00

4/27/2017 6449.0 $2,650.00 $487.50

4/27/2017 FACILITY $3,725.00 $3,159.38

6/19/2017 99213 $241.00 $106.10

6/29/2017 64490, 64491, GYG050 $7,350.00 $772.50

64492

6/29/2017 FACILITY GYG046 $7,725.00 $772.50

7/17/2017 99213 $241.00

7/20/2017 64633', 64634 $7,499.00 $7,499.00

7/20/2017 FACILITY GZJ723 $7,040.00 $986.50

9/7/2017 99213 $241.0.0 $106.00

9/28/2017 64493, 64494, $6,550.00 $6,550.00

64495

9/28/2017 FACILITY HDB947 $6,895.00 $1,212.00

10/26/2017 99213 $241.00 $106.00

11/2/2017 64493,64494,64495 HFS826 $6,550.00 $1,212.00

11/2/2017 FACILITY HGP87J $6,918.40 $1,212.00

11/8/2017 64772 HJM433 $29,697.00 $4,065.01

11/8/2017 ASSISTANT HJM326 $29,699.40 $271.00

12/12/2017 72158-TC HHMJ26 $4,699.80 $1,212.00

12/14/2017 73630-TC IIKL047 $1,850.00 $25.00

12/18/2017 73700-TC HKL046 $1,850.00 $137.00

2/22/2018 99213 $241.00 $106.00

3/1/2018 99214 $396.00 $168.00

3/1/2018 72141-TC HVF'247 $2,575.00 $219.30

4/12/2018 64633,64633,99152 JQR0-15 $5,854.00 $4,114.00

4/12/2018 FACILITY .JMK398 $6,725.00 $2,767.00

6/25/2018 99213 $241.00 $106.00

10/29/2018 99213 $241.00 $106.00

11/12/2018 64493, 64494 KHZ323 $5,175.00 $2,484.15

11/12/2018 FACILITY KHX486 $6,313.30 $2,871.65

12/3/2018 64493,64494 KHX660 $5,238.30 $2,484.15

12/3/2018 FACILITY KJS25I $6,250.00 $4,968.30

12/10/2018 99214 KLN883 $396.00 $168.00

12/17/2018 64633,64634 KJC643 $6,329.00 $2,767.00

12/17/2018 FACILITY KJS2S0 $6,725.00 $5,534.00

2/27/2019 64772 LRT2.99 $29,850.00 $3,655.56

2/27/2019 ASSISTANT LWV2SS $29,684.40 $379.42

7/l l/2019 99213 LSQ207 $241.00 $241.00

8/26/2019 99213 LXHl39 $241.00 $226.00

9/26/2019 64633,64634 LXR577 $6,329.00 $3,349.50

9/26/2019 FACILITY LXZ859 $6,725.00 $2,812.50

2/20/2020 99214 MWY62 $396.00 $227.00

4/30/2020 72141 -TC $2,575.00 $771.00

4/30/2020 99214 $396.00 $153.00

5/7/2020 62321 $2,898.40 $535.40

5/7/2020 FACILITY $3,925.00 $655.60

6/18/2020 NVB840 $2,875.00 $401.55

6/18//2020 PDH385 $3,925.00 $491.70

8/27/2020 PDH397 $2,875.00 $401.55

8/27/2020 PJW979 $3,948.00 $655.60

10/22/2020 PFM081 $5,100.00 $685.80

10/22/2020 PDP003 $6,123.40 $838.20

11/5/2020 PBM918 $5,100.00 $514.35

12/3/2020 PDL482 $6,123.40 $661.25

12/3/2020 PFN497 $5,854.00 $1,207.80

12/3/2020 PVD202 $6,725.00 $0.00

4/22/2021 2021141 $241.00 $0.00

7343241

Wenninger Total Amount Wenninger Total Amount Wenninger Amount

Billed Paid Owed

$371,101.60 $78,888.82 $243,323.38

Syrstad:

Date of Service Amount Charged Amount Paid Claim No.

1/27/2021 $18,947.60 $281.84 PPB744

1/27/2021 $22,449 $5,385.70 PPB745

1/27/2021 $4,215.80 $609.20 PTH670

1/21/2021 $4,825.00 $609.20 PTH670

1/11/2021 $396.00 $222.00 PPK005

1/25/2021 $396.00 $222.00 PPK007

1/21/2021 $396.00 $222.00 PPK008

1/21/2021 $5,137.70 $2,044.00 PNQ568

1/21/2021 $6,198.40 $913.80

6/14/2021 $270.00 $98.72 2021208CZ2929

8/16/2021 $270.00 $98.72

7/8/2020 $1,250.00 $216.00 NWV818

12/19/2019 $6,250.00 $420.11 MNT283

12/19/2019 $5,658.00 $449.60 MLH967

11/14/2019 $6,250.00 $393.08 MNQ912

11/14/2019 $5,658.00 $451.52 MGH570

5/22/2019 $37,500.00 $61.56 PNY691

5/22/2019 $37,500.00 $1,154.16 MBF636

4/8/2019 $6,250.00 $1,762.50 KZW593

4/8/2019 $5,698.00 $2,350.00 LGT382

3/21/2019 $6,250.00 $2,350.00 LKR875

3/21/2019 $5,698.00 $2,268.68 LFB969

2/11/2019 $3,302.00 $648.76 KRF434

12/7/2018 $1,500.00 $310.50 KJS245

12/7/2018 $924.00 $310.00 KHX662

8/3/2018 $924.00 $147.00 JVF886

2/21/2018 $3,058.00 $573.24 HSJ451

12/14/2017 $6,238.30 $796.50 HHY588

12/14/2017 $5,284.00 $796.50 HHY587

10/24/2017 $1,500.00 $755.00 HHP148

4/10/2017 $5,825.00 $613.00 GNR574

4/10/2017 $5,284.00 $459.75 201714QR0877

1/16/2017 $5,775.00 $225.00 2017086QR0828

Syrstad Total Amount Syrstad Total Amount Syrstad Amount Owed:

Billed: Paid:

$227,077.80 $31,997.64 $195,080.16

Plaintiffs allege that the above services rendered by NEA are covered medical

services under the Plan and that they timely submitted their respective claims (the

“Claims”) detailed above.

Plaintiffs allege the amount billed for the Claims was reasonable considering the

treatment’s complexity and the level of skill and experience required for the healthcare

procedures and was consistent with the usual and customary charges in the area.

Plaintiffs allege the amount billed for the Claims was also within the amount most

consistently charged by a licensed Physician or other professional provider for the

rendered service. Further, Plaintiffs allege that the amount charged for the Claims was

within the range of usual charges for a given service billed by most Physicians or other

professional providers with similar training and experience in the given geographic area.

Plaintiffs allege that upon receiving Plaintiffs’ requests for payment, Defendant

constructively denied the Claims by drastically underpaying them, which constitutes an

adverse benefit determination and breach of Plaintiffs’ rights under the Plan.

The 2013 SPD provides that if Defendant partially or wholly denies a claim for

benefits, the Plan member will receive an Explanation of Benefits (“EOB”) that will

include:

A. The specific reason or reasons for the denial;

B. Reference to the specific provisions of the Plan document on which the denial

is based;

C. A description of any additional material or information the Plan participant or

beneficiary must provide to perfect the claim, and an explanation of why that

material or information is needed;

D. A description of the steps the Plan participant or beneficiary must take to

appeal the denial of the claim and the time limits applicable to such procedures;

and

E. The Plan participant or beneficiary’s right to bring civil action under ERISA

after the appeal if they disagree with the appeal decision.

Plaintiffs allege Defendant’s denials of Plaintiffs’ Claims in the EOBs were

deficient because they did not, for example, give adequate explanations or guidance as to

how Defendant came to its conclusions. Plaintiffs do not identify any specific EOB they

claim was deficient in this respect.

Plaintiffs assert they timely appealed the Fund’s adverse benefits determinations.

The Plan Document provides that if the appeal is denied (partially or completely),

the beneficiary will receive a written notice that will include:

A. The specific reason or reasons for the denial;

B. Specific references to pertinent provisions of the Plan document on which the

denial is based;

C. A notice of the participant or beneficiary’s right, upon request and free of

charge, to have reasonable access to, and copies of, all documents, records and

other information relevant to their claim for benefits;

D. A description of any voluntary appeal procedures offered by the plan and the

beneficiary’s right to obtain information about the procedures;

E. Notice of the beneficiary’s right to bring civil action under ERISA or to appeal

to an external independent review organization; and

F. Notification of whether the denial relied on any internal rule, guideline,

protocol or other special criterion in making the adverse determination.

For Syrstad, Defendant’s Claim Appeal Committee held a meeting on January 19,

2022, to review and consider Syrstad’s appeal. The same day, it issued an appeal denial

letter stating that “the Committee determined to uphold the benefit determination of the

Fund Office. Please see the attached document for additional appeal information

including the claims that the Committee considered. Consequently, the purpose of this

letter is to notify you of the denial of your appeal, the basis for that denial, and your

additional rights.” There was no “attached document” to that correspondence. After

Plaintiffs’ counsel notified the Fund’s counsel that, as of March 9, 2022, the Fund still had

not provided the “attached document” referenced in the Fund’s January 19, 2022, appeal

denial, on March 21, 2022, the Fund’s counsel indicated via email that he would look into

the situation. Plaintiffs allege that when the Fund provided the “attached document,” the

“attached document” did not provide any basis or rationale for the benefit denial.

For Wenninger, Defendant’s Claim Appeal Committee did not provide documents

until April 12, 2022. On June 19, 2020, Plaintiffs’ counsel mailed a letter to Defendant

regarding a claim for benefits and requested relevant information. Defendant initially

responded on November 30, 2020, indicating Defendant would not provide any of the

requested information. However, Defendant responded on April 12, 2022, by providing

letters to Wenninger that Defendant alleges were previously sent to her. One letter was

dated January 15, 2018, and another letter was dated January 27, 2020. In the letters, there

was no basis or rationale for the decision, other than the conclusion that the charges were

in excess of the “Allowable Amount.” These letters were never received by Wenninger or

her counsel before April 12, 2022, even after several requests and other ongoing

correspondence prior to then.

Plaintiffs allege that for several years after Defendant committed to the 2013 SPD’s

terms, Defendant paid out to other Plan participants who had similar medical services to

the medical services in this lawsuit at an amount that was at, or substantially near, the

usual and customary rate charged for those medical services. However, at some point at

or near the earliest date of service noted in Plaintiffs’ Claims chart, Defendant – without

amending the 2013 SPD, or providing any notice of any Plan modifications to Plan

participants – materially modified its handling of Plan participants’ claims.

Plaintiffs allege that at some point at or near the earliest date of service noted in

their Claims chart, Defendant materially modified its handling of Plan participants’

Claims, because as of the earliest date of service noted above, Defendant’s application of

those terms resulted in Plaintiffs and other Plan participants receiving significantly

reduced payments – and devastating financial obligations – as compared to their

similarly situated Plan participants and their service providers that Defendant paid

before Plaintiffs’ Claims arose. Plaintiffs allege that, after Defendant’s undisclosed,

material modification of its handling of Plan participants’ claims, Defendant began

paying less than 10% of the usual and customary rate for said services, as reflected in the

charts included above.

Even assuming Defendant did not materially change the SPD’s reimbursement

terms, Plaintiffs allege that Defendant’s habit or practice of applying those

reimbursement terms changed over time so that, by the time Plaintiffs received their

treatment, Plaintiffs and other Plan participants in Plaintiffs’ position received dramatic

underpayments as compared to earlier Plan participants.

B. Counts

In their Amended Complaint, Plaintiffs allege two counts against Defendant.

Count I is claim for benefits under ERISA and to enforce and clarify rights under

the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B). Count I contains two claims. First, Plaintiffs

allege Defendant did not properly calculate the Allowable Charge for the services

Plaintiffs received and thus wrongfully denied or underpaid claims for those services.

Second, Plaintiffs allege Defendant failed to provide the necessary explanation for its

benefit determinations.

Count II is a claim for other appropriate relief and to redress violations of ERISA

and enforce the terms of the Plan and ERISA under 29 U.S.C. § 1132(a)(3). Count II

appears to contain three claims. First, Plaintiffs allege Defendant failed to specify which

method the Plan used to calculate the Allowable Charge for out-of-network services.

Second, Plaintiffs allege Defendant materially changed the 2013 SPD’s reimbursement

terms without amending the 2013 SPD or notifying Plan participants. Third, Plaintiffs

allege Defendant breached its fiduciary duties.

II. Legal Standard

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must

include “a short and plain statement of the claim showing that the pleader is entitled to

relief.” Fed. R. Civ. P. 8(a)(2). “A motion under Rule 12(b)(6) tests whether the complaint

states a claim on which relief may be granted.” Richards v. Mitcheff, 696 F.3d 635, 637 (7th

Cir. 2012). “To survive a Rule 12(b)(6) motion to dismiss, a complaint must (1) describe

the claim in sufficient detail to give the defendant fair notice of the claim and grounds on

which it rests, and (2) contain sufficient factual matter, accepted as true, to ‘state a claim

to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 672 (2009) (internal

citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

A claim has facial plausibility when the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged. Sloan, 901 F.3d at 894. But where a complaint pleads facts that are merely

consistent with a defendant’s liability, it stops short of the line between possibility and

plausibility of entitlement to relief. McReynolds v. Merrill Lynch & Co., Inc., 694 F.3d 873,

885 (7th Cir. 2012). While a complaint’s factual allegations are accepted as true at the

pleading stage, allegations in the form of legal conclusions are insufficient to survive a

Rule 12(b)(6) motion, and accordingly, threadbare recitals of the elements of the cause of

action, supported by mere conclusory statements, do not suffice. Id. The plausibility

standard calls for a “context-specific” inquiry that requires the court to draw on its

judicial experience and common sense. Id. When ruling on a motion to dismiss, the court

must construe the complaint in the light most favorable to the plaintiff, “accepting as true

all well-pleaded facts alleged, and drawing all possible inferences in [the plaintiff’s]

favor.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

III. Analysis

Plaintiffs allege two counts against Defendant. Defendant moves to dismiss both

counts.

A. Count I

Count I is claim for benefits under ERISA and to enforce and clarify rights under

the Plan pursuant to 29 U.S.C. § 1132(a)(1)(B). Under 29 U.S.C. § 1132(a), a participant or

beneficiary may bring a civil 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). A plaintiff bringing a

claim under this provision “is essentially asserting his or her contractual rights under an

employee benefit plan,” and such claims “are creatures of contract law.” Tolle v. Carroll

Touch, Inc., 977 F.2d 1129, 1133 (7th Cir. 1992).

Defendant argues that many claims in Count I should be dismissed because they

are time-barred. In addition, Defendant argues that Count I fails to state a claim.

1. Statute of Limitations

When a defendant argues a complaint should be dismissed for failing to comply

with a statute of limitations, “[d]ismissal under Rule 12(b)(6) [is] irregular, for the statute

of limitations is an affirmative defense.” United States v. N. Trust Co., 372 F.3d 886, 888

(7th Cir. 2004). Because “complaints need not anticipate and attempt to plead around

defenses,” id., a motion to dismiss based on failing to comply with the statute of

limitations should be granted only where “the allegations of the complaint itself set forth

everything necessary to satisfy the affirmative defense.” United States v. Lewis, 411 F.3d

838, 842 (7th Cir. 2005). In other words, the complaint must “plainly reveal [ ] that [the]

action is untimely under the governing statute of limitations.” Id. Dismissal is appropriate

“if the claim is ‘indisputably time-barred.’” Rosado v. Gonzalez, 832 F.3d 714, 716 (7th Cir.

2016) (quoting Small v. Chao, 398 F.3d 894, 898 (7th Cir. 2005)).

ERISA “does not contain a statute of limitations for the bringing of civil actions”

under § 1132(a)(1)(B). Jenkins v. Loc. 705 Int'l Bhd. of Teamsters Pension Plan, 713 F.2d 247,

251 (7th Cir. 1983). Thus, courts normally borrow “a statute of limitations from an

analogous state law.” Id. However, if a policy contains a provision specifying a shorter

limitations period, a federal court “must give effect to the policy’s limitations provision

unless [the court determines] either that the period is unreasonably short, or that a

‘controlling statute’ prevents the limitations provision from taking effect.” Heimeshoff v.

Hartford Life & Accident Ins. Co., 571 U.S. 99, 109 (2013) (internal citation omitted).

Defendant argues that any of Plaintiffs’ claims incurred more than three years

prior to the date the Complaint was filed are barred by the Plan’s contractual time

limitation. Plaintiffs argue that the purported contractual time limitation is unenforceable

and that their claims are timely under either Illinois or Wisconsin law. Regardless,

Plaintiffs argue, their claims are timely because their claims did not accrue until 2022,

when Defendant provided Plaintiffs a clear repudiation of their claims.

The parties dispute whether the Plan has a contractual time limitation that applies.

Plaintiffs allege that the Plan is governed by the 2013 SPD, which states:

This booklet contains only highlights of certain features of the NECA-IBEW

Welfare Trust Fund Base Plan for Active Employees and their dependents

in effect as of January 1, 2013. Full details are contained in the Plan

Documents, Trust Agreements, insurance contracts and the collective

bargaining agreements that establish the Plan provisions. If there is a

discrepancy between the wording here and the Plan Documents that

establish the Plan, the Plan Document language will govern.

(#1, Ex. 1 at 6).

Because the 2013 SPD provides that the full details are contained, in part, in the

relevant Plan Documents, Defendant argues that the 2013 SPD is merely a summary of

the Plan Documents, that the 2013 SPD cannot be read in isolation, and that the applicable

Plan Documents must be considered part of the pleadings. Defendant’s Motion to

Dismiss attaches a declaration stating that prior to January 1, 2018, the Fund’s governing

documents included the 2013 SPD and the 2012 Plan Document; prior to 2020, the

governing documents included the 2013 SPD and the 2018 Plan Document; and that

effective July 1, 2020, the governing documents included the combined 2020 SPD and

Plan Document. Thus, Defendant argues, Plaintiffs’ Claims from January 2017 through

December are 2018 governed by 2013 SPD and 2012 Plan Document, from January 2018

through June 2020 are governed by 2013 SPD and 2018 Plan Document, and from July

2020 through the present are governed by the combined 2020 SPD and Plan Document.

Rule 10(c) provides that “[a] copy of any written instrument which is an exhibit to

a pleading is a part thereof for all purposes.” Fed. R. Civ. P. 10(c). In addition, “documents

attached to a motion to dismiss are considered part of the pleadings if they are referred

to in the plaintiff’s complaint and are central to his claim. Such documents may be

considered by a district court in ruling on the motion to dismiss.” Wright v. Assoc. Ins.

Cos. Inc., 29 F.3d 1244, 1248 (7th Cir.1994). “[T]his is a narrow exception” to the general

rule that when additional evidence is attached a motion to dismiss, “the court must either

convert the 12(b)(6) motion into a motion for summary judgment under Rule 56 ... or

exclude the documents attached to the motion to dismiss and continue under Rule 12.”

Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998). Although narrow, this exception is

“aimed at cases interpreting, for example, a contract.” Id.

As described further below, even if this Court were to consider the relevant Plan

Documents as part of the pleadings and find that they govern the Plan, there is presently

insufficient information to decide whether Plaintiffs’ claims in Count I are time-barred

because the Amended Complaint’s allegations do not “set forth everything necessary to

satisfy the affirmative defense.” Lewis, 411 F.3d at 842.

The 2012 Plan Document and 2018 Plan Document contain identical contractual

limitation provisions stating that “no legal or equitable action … may be commenced later

than two years from the date the claim was required to be received by the Plan” and that

“claims and all required information must be received within one year from the date of

service or the claim will be denied.” Thus, the 2012 Plan Document and 2018 Plan

Documents provide that plaintiffs have three years from the date a claim is incurred to

file a complaint (one year to submit to the Plan and two years thereafter to file).

Plaintiffs argue, however, that Defendant did not provide Plaintiffs with ERISA-

compliant notices that included a limitations period, and therefore, that the purported

contractual limitation period is unenforceable.

Section 503 of ERISA requires every employee benefit plan to

(1) provide adequate notice in writing to any participant or beneficiary

whose claim for benefits under the plan has been denied, setting forth the

specific reasons for such denial, written in a manner calculated to be

understood by the participant, and

(2) afford a reasonable opportunity to any participant whose claim for

benefits has been denied for a full and fair review by the appropriate named

fiduciary of the decision denying the claim.

29 U.S.C. § 1133(1)–(2).

Two provisions in the implementing regulations, 29 C.F.R. § 2560.503-1(j)(4)(ii)

and 29 C.F.R. § 2560.503-1(g)(1)(iv), address the issue of limitations periods. Section (g)(1)

states:

(1) Except as provided in paragraph (g)(2) of this section, the plan

administrator shall provide a claimant with written or electronic

notification of any adverse benefit determination .... The notification shall

set forth, in a manner calculated to be understood by the claimant—

***

(iv) A description of the plan’s review procedures and the time limits

applicable to such procedures, including a statement of the claimant's right

to bring a civil action under section 502(a) of the Act following an adverse

benefit determination on review;

***

29 C.F.R. §§ 2560.503-1(g)(1), (1)(iv).

While the Seventh Circuit has not addressed this issue, three other federal courts

of appeals have held that (g)(1)(iv) requires a plan administrator to disclose the

contractual limitations period. See Mirza v. Ins. Adm’r of Am., Inc., 800 F.3d 129, 134–137

(3d. Cir. 2015); Moyer v. Metro. Life Ins. Co., 762 F.3d 503, 505 (6th Cir. 2014); Candelaria v.

Orthobiologics LLC, 661 F.3d 675, 680 n.7 (1st Cir. 2011). The appropriate remedy for

violating this notice requirement “is to set aside the plan’s time limit and apply the

limitations period from the most analogous state-law cause of action.” Mirza, 800 F.3d at

131. Under Illinois law, the most analogous Illinois statute of limitations is the “10-year

period for suits pertaining to written contracts.” Daill v. Sheet Metal Workers’ Local 73

Pension Fund, 100 F.3d 62, 65 (7th Cir. 1996). Under Wisconsin law, “the most analogous

state statute of limitations is Wisconsin’s six-year period for bringing contract claims

under Wisconsin statute § 893.43.” Doe v. Blue Cross & Blue Shield United, 112 F.3d 869,

873 (7th Cir. 1997).

Questions remain as to whether the 2012 and 2018 Plan Documents govern the

Plan and whether the Plan provided adequate notice of the contractual limitations

provision in its denial letters. Thus, dismissal on statute of limitations grounds is

inappropriate because the claim is not “indisputably time-barred.” Small, 398 F.3d at 898.

Defendant argues that if Plaintiffs are permitted to proceed on their barebones

allegations, the statute of limitations in these types of cases will never run because a

plaintiff can simply allege that he never received responses from a plan. While

Defendant’s point is well taken, “complaints need not anticipate and attempt to plead

around defenses.” N. Trust Co., 372 F.3d at 888. Plaintiffs’ Amended Complaint does not

“plainly reveal” that certain claims under Count I are time-barred. Lewis, 411 F.3d at 842.

Accordingly, the Court recommends that the District Court deny Defendant’s

request to dismiss any of Plaintiffs’ claims within Count I as time-barred. Obviously,

Defendant may raise this defense again once the evidence relating to it is more fully

developed.

2. Failure to State a Claim

Count I contains two claims under 29 U.S.C. § 1132(a). First, Plaintiffs allege

Defendant wrongfully denied or underpaid claims for services. Second, Plaintiffs allege

Defendant failed to provide the necessary explanation for its benefit determination.

Defendant argues these claims should be dismissed because they fail to state a

claim.

a. Claim for Benefits

Plaintiffs allege Defendant did not properly calculate the Allowable Charge for the

services Plaintiffs received and thus wrongfully denied or underpaid claims for services.

For relief, Plaintiffs ask that they be awarded benefits due under the Plan and that the

Court enforce Plaintiffs’ rights under the Plan, including that Defendant be ordered to

pay in full for Plaintiffs’ Claims, pursuant to the Plan, which remain unpaid or underpaid

and outstanding.

Defendant argues that most of Plaintiffs’ claims should be dismissed with

prejudice because Plaintiffs have failed to identify each of the claims for which they are

seeking relief.

“The first and critical allegation” of a violation of § 1132(a)(1)(B) is that the plaintiff

was “entitled to benefits under the terms of an employee-benefits plan.” Brooks v. Pactiv

Corp., 729 F.3d 758, 764 (7th Cir. 2013). However, “plaintiffs alleging claims under 29

U.S.C. § 1132(a)(1)(B) for plan benefits need not necessarily identify the specific language

of every plan provision at issue to survive a motion to dismiss under Rule 12(b)(6).”

Griffin v. TeamCare, 909 F.3d 842, 845 (7th Cir. 2018) (quoting Innova Hosp. San Antonio,

Ltd. P’ship v. Blue Cross & Blue Shield of Ga, Inc., 892 F.3d 719, 729 (5th Cir. 2018)). Plaintiffs

sometimes “attach the relevant plan documents to the complaint as insurance against the

risk that the complaint’s description of the plan’s terms is ambiguous or otherwise

deficient.” Brooks, 729 F.3d at 764.

Additionally, the complaint must “provide the court with enough factual

information to determine whether the services were indeed covered services under the

plan.” LB Surgery Ctr., LLC v. United Parcel Serv. of Am., Inc., 2017 WL 5462180, at *2 (N.D.

Ill. Nov. 14, 2017). This includes “enough basic factual information regarding each of the

specific claims that [ ] are actually at issue.” Doctor’s Hosp. of Slidell, LLC v. United

HealthCare Ins. Co. , 2011 WL 13213620, at *3 (E.D. La. Apr. 27, 2011); see also Mission

Toxicology, L.L.C. v. UnitedHealthcare Ins. Co., 2018 WL 2222854, at *6 (W.D. Tex. Apr. 20,

2018) (finding information regarding “(1) the insured’s name; (2) the plan or the terms of

the insured’s plan that was allegedly violated; and (3) the services provided under the

plan,” “paramount” to sufficiently state a claim for ERISA benefits).

In support of their claim that Defendant wrongfully denied or underpaid claims

for services, Plaintiffs provide charts listing the dates of service, billed amounts, paid

amounts, and other relevant information such as procedure codes and claim numbers for

all the Claims at issue in this lawsuit. (#26 ¶ 25). Plaintiffs have clearly identified the

Claims they allege Defendant wrongfully denied or underpaid and for which they are

seeking relief. The Wisconsin District Court directed Plaintiffs to identify the claims for

which they are seeking relief. They have done so. Thus, they have provided fair notice of

their claims.

Plaintiffs also sufficiently allege facts to state a claim for relief. They have

identified the relevant 2013 SPD terms regarding allowable amounts for covered out-of-

network services, which they allege Defendant underpaid. They have also attached the

relevant plan document, the 2013 SPD, which they allege governs the claims at issue in

this case. Additionally, as noted above, Plaintiffs provide charts listing dates of service,

billed amounts, paid amounts, and other relevant information such as procedure codes

and claim numbers for all the Claims at issue here. Further, they allege these Claims were

covered services under the Plan because they were medically necessary and not subject

to any exclusion. (#26 ¶ 26, 44).

Defendant argues that Plaintiffs’ allegations relating to its claim for benefits are

conclusory and therefore fail to state a valid claim for relief. For example, Defendant

asserts, although Plaintiffs allege they timely appealed the adverse benefits

determinations, they do not allege when they appealed each adverse benefit

determination or whether they appealed every Claim or only some Claims.

The Seventh Circuit has interpreted ERISA to require plaintiff to exhaust a plan’s

administrative remedies prior to bringing suit. Schorsch v. Reliance Standard Life Ins. Co.,

693 F.3d 734, 739 (7th Cir. 2012). Failing to exhaust administrative remedies includes

failing to timely appeal a denial of benefits. Gallegos v. Mount Sinai Med. Cntr., 210 F.3d

803, 808 (7th Cir. 2000). “The preference in this Circuit is to require the exhaustion of

administrative remedies before a plaintiff may file a federal claim alleging an ERISA

violation.” Koenig v. Waste Mgmt., Inc., 76 F.Supp.2d 908, 912 (N.D.Ill.1999) (citing Robyns

v. Reliance Standard Life Ins. Co., 130 F.3d 1231, 1235 (7th Cir.1997)).

Some courts in the Seventh Circuit have found that the “failure to exhaust

remedies” requirement is not an element of an ERISA claim, but an affirmative defense.

Moore v. ABB Power T&D Co. Inc., 2000 WL 1902185, at *1 (S.D. Ind. Dec. 13, 2000). Others

have found that “a plaintiff is required to provide sufficient allegations in her complaint

that will at least allow for an inference that she exhausted her administrative remedies.”

Ahr v. Commonwealth Edison Co., 2005 WL 6115023, at *4 (N.D. Ill. Feb. 24, 2005).

The Court need not weigh in on this split because Plaintiffs allege they timely

appealed the adverse benefits determinations. (#26 at ¶35). This allegation, while bare, is

sufficient to “provide a general allegation that would allow for an inference that the

exhaustion requirement is met ….” Id. at *6. Drawing all inferences in Plaintiffs’ favor, as

the Court is required, Plaintiffs’ Amended Complaint contains sufficient facts to state a

plausible claim for benefits under 29 U.S.C. § 1132(a)(1)(B). Thus, the Court recommends

that Defendant’s request to dismiss Plaintiffs’ claim for benefits within Count I be denied.

b. Explanation of Benefit Determination

Within Count I, Plaintiffs also allege that Defendant failed to provide the necessary

explanation for its benefit determinations. For relief, Plaintiffs ask the Court to clarify and

enforce Plaintiffs’ rights under the Plan, including declaratory and injunctive relief that

Defendant be required to specify the Allowable Charge used under the terms of the Plan

and that Defendant provide notice of the method used to calculate the Allowable Charge

and Plaintiffs’ cost-sharing responsibility. In addition, Plaintiffs ask that Defendant’s

previous denial of benefits decisions be entitled to no deferential review, and instead be

reviewed using a de novo standard of review.

Defendant argues that most of Plaintiffs’ Claims should be dismissed with

prejudice because Plaintiffs have failed to identify each individual EOB and appeals

determination that was purportedly deficient.

ERISA § 1133, the basis for this claim, requires every employee benefit plan to

“provide adequate notice in writing to any participant or beneficiary whose claim for

benefits under the plan has been denied, setting forth the specific reasons for such denial,

written in a manner calculated to be understood by the participant.” 29 U.S.C. § 1133(1);

29 U.S.C. § 1132(a)(1)(B) (statutory enforcement provision for § 1133 violations). While

Plaintiffs do not cite ERISA § 1133 in their Amended Complaint, they cite 29 C.F.R. §

2560.503–1(g), (j), which describes the manner and content required for benefit

determination notifications.

In its Order dismissing Plaintiffs’ original Complaint, the Wisconsin District Court

directed Plaintiffs to allege which EOBs and appeal letters were deficient and what

remedy Plaintiffs seek in connection with those EOBs and appeal letters. Plaintiffs have

not done so.

Like in their original Complaint, Plaintiffs only generally allege that “Defendant’s

denials of Plaintiffs’ Claims in the EOB were deficient because they did not, for example,

give adequate explanations or guidance as to how Defendant came to its conclusions.”

(#26 ¶ 34). They do not identify any specific EOB. The only denial letters Plaintiffs

specifically identify are the January 19, 2022, denial letter directed to Syrstad and the

January 15, 2018, and January 27, 2020, denial letters directed to Wenninger. (#26 ¶ 39-

40). Like the original Complaint, the Amended Complaint does not identify the NEA

charge or charges to which these appeals and denial letters related.

Plaintiffs now identify the relief they seek relating to the EOBs and denial letters,

namely that the Court not afford the previous adverse benefits decisions any deference

but review and analyze those decisions de novo. However, because Plaintiffs allege many

adverse determinations, they must identify the specific EOBs and denial letters that relate

to each adverse determination. Plaintiffs fail to do so.

Plaintiffs argue that the only EOBs and denial letters they received are described

in the Amended Complaint and that they cannot be faulted for failing to list or describe

EOBs and denial letters that Defendant never sent to them. But, Plaintiffs do not allege

this in their Amended Complaint, or at least, make this sufficiently clear to put

Defendants on notice of it. Rather, they allege that “Defendant’s denials of Plaintiffs’

Claims in the EOB were deficient because they did not, for example, give adequate

explanations or guidance as to how Defendant came to its conclusions.” (#26 ¶ 34). While

it appears Plaintiffs are now arguing that the EOBs and appeal denial letters were

deficient because, except for the three denial letters mentioned in the Amended

Complaint, they were never issued (see #33 at 14) for any of the identified services,

Plaintiffs do not allege so in their Amended Complaint.

Plaintiffs argue that Defendant can locate the relevant EOBs and benefit denial

letters based on Plaintiffs’ Claims chart in their Amended Complaint. Defendant’s

“alleged knowledge of the claims or the plan terms cannot cure these pleading defects,”

however. Sky Toxicology, Ltd. v. UnitedHealthcare Ins. Co., 2018 WL 4211741, at *5 (W.D.

Tex. Sept. 4, 2018) (citing Mora v. Albertson’s, L.L.C., 2015 WL 3447963, at *3 (W.D. Tex.

May 28, 2015) (“[F]ederal pleading standards require complaints to be facially sufficient

.... When a complaint contains insufficient facts to state a plausible claim to relief, it is

irrelevant whether the parties have knowledge of unstated facts that would cure the

defect.”)).

Plaintiffs have not identified the EOB and appeal determinations for which they

are seeking redress and have failed to provide Defendant notice of these claims under

Count I. Thus, the Court recommends that Plaintiffs’ claim for failing to provide an

adequate explanation of benefit determination within Count I be dismissed without

prejudice.

B. Count II

Count II is a claim for other appropriate relief and to redress violations of ERISA

and enforce the terms of the Plan and ERISA under 29 U.S.C. § 1132(a)(3). Section

1132(a)(3) provides that a beneficiary may bring a lawsuit “(A) to enjoin any act or

practice which violates any provision of this subchapter or the terms of the plan, or (B) to

obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any

provisions of this subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3). Plaintiffs

appear to bring three claims within Count II.

First, Plaintiffs allege Defendant violated 29 U.S.C. § 1022 and 29 C.F.R. § 2520.102-

3 by failing to specify which method the Plan used to calculate the Allowable Charge for

out-of-network services. Second, Plaintiffs allege Defendant violated 29 U.S.C. § 1024(b)

and 29 C.F.R. § 2520.104b-3 by materially changing the 2013 SPD’s reimbursement terms

without amending the 2013 SPD or providing notice to Plan participants. For these two

claims, Plaintiffs request equitable relief including, but not limited to, an order that

Defendant pay for the Claims based on NEA’s total charges, and injunctive and

declaratory relief to ensure that Defendant complies with its obligations under the Plan.

Third, Plaintiffs allege that Defendant breached its fiduciary duty in violation of

29 U.S.C.§ 1104(a). Plaintiffs assert they are entitled to relief under 29 U.S.C. § 1132(a)(2)

and 29 U.S.C. § 1109 on account of Defendant’s breaches of fiduciary duty, including such

equitable or remedial relief as the Court may deem appropriate.

Defendant argues Count II should be dismissed because it is barred by the statute

of limitations and fails to state a claim.

1. Statute of Limitations

Defendant argues ERISA’s statute of limitations for breach of fiduciary duty bars

Plaintiff’s entire Count II. Plaintiffs respond that Defendant’s statute of limitations

argument only deals with Plaintiffs’ claims under 29 U.S.C. § 1132(a)(3) and that their

claims related to violations of the other statutes are not time-barred.

Within Count II, Plaintiffs allege violations of 29 U.S.C. § 1022 and § 1024(b) and

breach of fiduciary duty under 29 U.S.C. § 1132(a)(2) and § 1109. In their Response,

Plaintiffs clarify that these allegations are not standalone claims, but rather, are part of

their overall claim for equitable relief under 29 U.S.C. § 1132(a)(3). (See #33 at 21-22). Thus,

Plaintiffs concede that, despite alleging various violations of ERISA within Count II, all

those alleged violations fall under 29 U.S.C. § 1132(a)(3).

However, the Amended Complaint appears to bring two sets of claims for

equitable relief under 29 U.S.C. § 1132(a)(3). One set of claims alleges breach of fiduciary

duty under ERISA’s “catch-all” provision, 29 U.S.C. § 1132(a)(3). (See #26 at ¶¶ 70-76).

For these claims, the statute of limitations for breach of fiduciary duty applies. George v.

Kraft Foods Glob., Inc., 674 F. Supp. 2d 1031, 1041 (N.D. Ill. 2009). The other set of claims

appears to be brought pursuant to the ERISA’s civil enforcement provision in 29 U.S.C. §

1132(a)(3). (See #26 at ¶¶ 57-69).

These claims presumably brought under ERISA’s civil enforcement provision

allege that Defendant’s actions violated ERISA under 29 U.S.C. § 1022 and § 1024(b).

While the alleged violations of 29 U.S.C. § 1022 and § 1024(b) serve as a partial basis for

Defendant’s alleged breaches of fiduciary duty, they are also separately brought under

the civil enforcement provision in 29 U.S.C. § 1132(a)(3). To the extent the claims for

violations of 29 U.S.C. § 1022 and § 1024(b) and their accompanying regulations are

brought under the civil enforcement provision, they are not subject to the limitations

period for breach of fiduciary duty. See Pohl v. McCaffrey, 2006 WL 208710, at *4 (N.D. Ill.

Jan. 25, 2006).

As it relates to the claims alleging breach of fiduciary duty, ERISA provides that

no action for breach of fiduciary duty may be brought after the earlier of

(1) six years after (A) the date of the last action which constituted a part of

the breach or violation, or (B) in the case of an omission the latest date on

which the fiduciary could have cured the breach or violation, or

(2) three years after the earliest date on which the plaintiff had actual

knowledge of the breach or violation;

except that in the case of fraud or concealment, such action may be

commenced not later than six years after the date of discovery of such

breach or violation.

29 U.S.C. § 1113.

Defendant argues ERISA’s three-year statute of limitations bars Plaintiff’s claims.

“To trigger the three-year statute of limitations,” a plaintiff must “must have ‘actual

knowledge’ of the alleged breaches of fiduciary duty.” George, 674 F. Supp. 2d at 1041

(citing 29 U.S.C. § 1113(2)). For a plaintiff to have actual knowledge of an ERISA violation,

it is not enough that he “‘had notice that something was awry; he must have had specific

knowledge of the actual breach of duty upon which he sues.’” Martin v. Consultants &

Adm’rs, Inc., 966 F.2d 1078, 1086 (7th Cir. 1992) (quoting Radiology Center, S.C. v. Stifel,

Nicolaus & Co., 919 F.2d 1216, 1221 (7th Cir. 1990)). However, it is unnecessary for a

plaintiff to “have knowledge of every last detail of a transaction, or knowledge of its

illegality.” Id. Instead, the “relevant knowledge for triggering the statute of limitations is

knowledge of the facts or transaction that constituted the alleged violation.” Id. (emphasis

in original).

Plaintiffs allege Defendant breached its fiduciary duty by (1) failing to follow the

terms of the Plan, failing to properly adjudicate and pay Plaintiffs’ Claims, and arbitrarily

and unreasonably determining not to pay Plaintiffs’ Claims; (2) utilizing an unreasonably

low Allowable Charge and increasing the portion of billed charges for which Plaintiffs

may be responsible; and (3) failing to provide an SPD with a detailed description of the

Plan benefits and description of cost-sharing provisions and amounts for which the

participant or beneficiary may be liable, and failing to provide written disclosure to

participants and beneficiaries with respect to a material reduction in covered services or

benefits under the Plan. Importantly, Plaintiff’s Amended Complaint is silent as to when

Plaintiffs learned of these alleged breaches of fiduciary duty.

As noted above, ERISA’s statute of limitations is an affirmative defense, and a

claim may be dismissed on that basis only if “the allegations of the complaint itself set

forth everything necessary to satisfy the affirmative defense.” Lewis, 411 F.3d at 842.

Because Plaintiff’s Amended Complaint is silent as to when Plaintiffs learned of these

alleged breaches of fiduciary duty, the Amended Complaint does not set forth everything

necessary to satisfy the statute of limitations affirmative defense.

Defendant argues Plaintiffs knew all the facts they needed to bring their claims in

early 2017. Defendant bases this argument on Plaintiffs’ allegations that starting in

February 2, 2017, for Wenninger, and January 16, 2017, for Syrstad, the Plan started

paying 10% of the usual and customary rate for the same medical services. Plaintiffs

further allege the Plan “must have materially modified its handling of Plan participants

claims, because as of the earliest date of service above, Defendant’s application of those

terms resulted in Plaintiffs … receiving significantly reduced payments.” (#26 ¶ 66).

Despite these allegations, to find in Defendant’s favor, the Court would need to

draw inferences against Plaintiffs, which the Court is not permitted to do at this stage.

Iron Workers St. Louis Dist. Council Pension Fund v. Zenith Am. Sols., Inc., 2014 WL 3563295,

at *2 (N.D. Ill. July 17, 2014). Thus, because the Amended Complaint’s allegations do not

set forth everything necessary to satisfy the statute of limitations affirmative defense, the

Court recommends that the District Court deny Defendant’s request to dismiss Plaintiffs’

claims under 29 U.S.C. § 1132(a)(3) within Count II as time-barred. Again, this argument

can be raised later once the facts are more fully developed.

B. Failure to State a Claim

As noted above, Plaintiffs’ Count II alleges claims for equitable relief pursuant to

29 U.S.C. § 1132(a)(3) for failing to provide methodology under 29 U.S.C. § 1022, failing

to disclose a material modification under 29 U.S.C. § 1024(b), and for breaches of fiduciary

duty under 29 U.S.C. § 1104(a) as well as 29 U.S.C. § 1132(a)(2) and 29 U.S.C. § 1109.

Defendant argues all of Plaintiffs’ claims for equitable relief under 29 U.S.C. §

1132(a)(3) should be dismissed for failure to state a claim.

1. Failure to Provide Methodology

29 U.S.C. § 1022 provides that a “summary plan description of any employee

benefit plan shall be furnished to participants and beneficiaries,” which contains all the

information set forth in 29 U.S.C. § 1022 and the accompanying regulation, 29 C.F.R. §

2520.102-3. For group health plans, the summary plan description must include “a

description of: any cost-sharing provisions, including premiums, deductibles,

coinsurance, and copayment amounts for which the participant or beneficiary will be

responsible … and whether, and under what circumstances, coverage is provided for out-

of-network services….” 29 C.F.R. § 2520.102-3(j).

Plaintiffs allege Defendant failed to comply with these requirements because the

2013 SPD does not provide a detailed description of the cost-sharing provisions

applicable to out-of-network benefits. Specifically, Plaintiffs allege that while participants

and beneficiaries are responsible for paying the difference between the billed amount and

the Allowable Charge, the SPD does not specify what method the Plan uses to calculate

the Allowable Charge, leaving participants and beneficiaries without knowledge of how

much they may be liable in cost-sharing under the Plan.

Defendant argues Plaintiffs have failed to state a claim as a matter of law in this

regard because ERISA does not require a SPD to contain specific methodology for

calculating in-network or out-of-network claims.

The 2013 SPD provides as follows: