A recent Seventh Circuit case, Killian v. Concert Health Plan (Nov. 7, 2013), highlights two important principles for any plan sponsor or fiduciary:

  1. If a plan document or summary plan description leaves out information and says to call a phone number for details, plan fiduciaries can be responsible for call center representatives’ oral statements and omissions.
  2. A call center representative might have a responsibility to provide more information than a caller specifically requests, if the caller’s questions indicate that additional information would be important to the caller under the circumstances.

The Killian case involved unfortunate circumstances.  An employee was admitted to a hospital for emergency cancer surgery.  The insurance certificate for the employee’s health plan cautioned participants to call a phone number to confirm that their health provider was in-network.  The employee’s husband followed this suggestion and called the number.

The husband explained to the call center representative that his wife needed immediate treatment, and was seeking admission to St. Luke’s Hospital.  The representative could not find St. Luke’s Hospital in her database (possibly because St. Luke’s had changed its name to Rush several years earlier), but told the caller to “go ahead with whatever had to be done.”  The caller never asked whether the hospital’s services would be covered, and the representative did not address that question.  She told him to call back later.

The employee’s husband called back later that same day, and told a different representative that the employee was getting admitted to Rush Hospital.  The caller said “I’m trying to get confirmation that we are going to be–my wife is going to be admitted to Rush.”  The representative said “Okay,” and did not address whether Rush was in-network or whether there would be any limits to coverage.

The employee was admitted to the hospital and had the surgery.  Unfortunately, it was not successful, and the employee died a few months later.  Meanwhile, the employee’s husband learned that the hospital’s services were not covered by the plan.  He was left with an $80,000 bill.

Applying the principles described above, the Seventh Circuit concluded that plan fiduciaries could be liable for having failed (through the call center) to inform the employee’s husband that the services were not covered.  The court explained that the call center representative could have inferred from the conversations that the employee’s husband wanted to know whether the hospital’s services would be covered.  Because the insurance certificate instructed participants to call to obtain the information, the plan fiduciaries could be liable for not providing the information when the circumstances indicated that it was being sought.

The Killian opinion offers three practical lessons for employers who wish to mitigate their exposure to these kinds of claims:

  1. Identify Information to Be Provided Orally.  The Seventh Circuit emphasized that the caller was looking for information that was not included in the plan documents or participant communications.  Had the information been included in those materials, the administrator might not have been responsible for incorrect or incomplete information provided by call center representatives.  It may be helpful to ensure that the fiduciaries are aware of the information that is expected to be provided orally.
  2. Review Written Communications Because Documents Matter.  Including more information in plan documents and communications can be a double-edged sword: the information provided needs to be accurate and up-to-date.  Providing incorrect, ambiguous, or dated  information might have been worse for the plan administrator than leaving the information out.
  3. Review Call Center Procedures.  If information is omitted from written communications and expected to be provided orally upon request, employers might want to take steps to ensure that the information is easily accessible and will be provided readily, even if not specifically requested.  Even if call center representatives do not infer what every caller really wants to know, asking simple questions like “Have I answered your question?” or “Is there anything else I can help you with?” can go a long way.

Cases about disclosure ultimately depend on the particular facts and the court hearing the case.  But the Killian case is a good reminder of the importance of careful planning, training, and having accurate plan documents and communications.