Fisher v. Aetna Life Ins. Co.

32 F.4th 124

Jacqueline FISHER, Plaintiff-Appellant,

v.AETNA LIFE INSURANCE COMPANY, Defendant-Appellee.¹

Docket Nos. 20-3148

20-3804

21-1

August Term, 2021

United States Court of Appeals, Second Circuit.

Argued: October 20, 2021

Decided: April 22, 2022

WILLIAM DUNNEGAN, Dunnegan & Scileppi LLC (Laura Scileppi, Richard Weiss, on the brief), New York, NY, for Plaintiff-Appellant.

EVAN YOUNG, Baker Botts L.L.P. (Earl B. Austin, on the brief), New York, NY, for Defendant-Appellee.

Before: CALABRESI, POOLER, Circuit Judges, and KORMAN,² District Judge.

POOLER, Circuit Judge:

This case arises from three separate but related appeals of Jacqueline Fisher, which we heard in tandem. First, Fisher appeals from the judgment of the United States District Court for the Southern District of New York (Woods, J. ) granting judgment to Aetna Life Insurance Company on Count I of Fisher's claim for breach of contract under the Employee Retirement Income Security Act of 1974 ("ERISA") regarding her 2014 health insurance plan with Aetna. Second, Fisher appeals from the judgment of the district court (Sullivan, J. ) granting judgment to Aetna on Fisher's claim for breach of contract under ERISA regarding her 2015 health insurance plan. Third, Fisher takes an interlocutory appeal from the non-final order of the district court (Woods, J. ) ruling in favor of Aetna on Count II of Fisher's 2014 breach of contract claim under ERISA.

In Fisher's complaint regarding her 2014 health insurance plan, Count I alleged that the document Fisher received on January 9, 2014 ("January 9 Document") was the governing health insurance contract between the parties and Aetna breached that contract by failing to reimburse Fisher for her purchases of EffexorXR, a brand-name antidepressant. Aetna argued that the insurance contract was governed by the terms provided in a document Fisher received on February 19 ("February 19 Document"). The February 19 Document, unlike the January 9 Document, contained a "Choose Generic" clause which required insurees who elected to take a brand-name drug, to pay the price difference between the brand-name drug and its generic equivalent. Count II alleged, in the alternative, that even if the document Fisher received on February 19 governed the health insurance contract between the parties, Aetna had breached that contract by failing to reimburse Fisher for her purchases of EffexorXR. Additionally, for both counts, Fisher alleged that Aetna breached its obligations by failing to pay for Fisher's purchases of EffexorXR after she met her out-of-pocket limit.

The district court (Woods, J. ) held a bench trial and called its own witnesses. Ultimately, the district court granted judgment to Aetna on Count I. The district court concluded that, because Fisher was on ‘inquiry notice,’ the February 19 Document governed the contract of insurance between the parties. Because the February 19 Document included a "Choose Generic" clause, Fisher was required to pay the difference between EffexorXR and its generic equivalent. Therefore, Aetna did not breach the contract by charging Fisher for the cost difference between EffexorXR and its generic equivalent. As to Count II, the district court granted partial summary judgment to Aetna holding that Aetna properly applied the family out-of-pocket limit to Fisher's claims and that her purchases of EffexorXR did not count toward her out-of-pocket limit.

Fisher brought a second complaint, this time regarding her 2015 health insurance plan, which largely reprised her allegations in Count II. After remanding to Aetna for a recalculation of Fisher's benefits, the district court (Sullivan, J. ) granted summary judgment to Aetna holding that Fisher was not entitled to a judgment for her copay differential and that the ACA was ambiguous on whether the individual or family out-of-pocket limit applied to an individual on a family health insurance plan, so the terms of the insurance contract controlled.

Fisher appeals the decisions of the district courts, arguing that the district courts erred in finding that she was on inquiry notice, that she is entitled to a judgment for Aetna's miscalculation of her copay differential, that the ACA provided that the individual out-of-pocket limit applied to her, and that the ACA required Aetna to apply the brand-generic cost differential charge to Fisher's out-of-pocket limit. We conclude the district court properly found that Fisher was on inquiry notice because the terms of the February 19 Document were obvious and called to Fisher's attention in the January 9 Document as well as through her health insurance broker. We also agree that, because Aetna's decision on remand to award her the copay differential she requested was not arbitrary or capricious, Fisher is not entitled to judgment. Moreover, because the language of the ACA is ambiguous as to whether the individual out-of-pocket limit applies to an individual on an other than self-only plan, we conclude the language of the insurance contract controls and that the controlling regulations mandating otherwise did not go into effect until 2016. Finally, the ACA does not provide that Aetna apply the brand-generic cost differential to Fisher's out-of-pocket limit because her purchases of EffexorXR were not a covered service under the terms of the ACA. Accordingly, we affirm the district courts’ grants of summary judgment.

BACKGROUND

I. Dunnegan & Scileppi's Health Insurance Plans

Fisher is the spouse of William Dunnegan, a name partner at Dunnegan & Scileppi LLC ("D & S"), a New York based law firm. D & S offers health insurance coverage to its employees (such as Dunnegan) and their beneficiaries (such as Fisher) through a small business group insurance policy. In 2013, D & S had health insurance coverage through a policy issued by Oxford Health. Fred Warner, an independent insurance broker who assisted D & S with selecting a group health insurance policy, advised D & S that the Oxford policy was up for renewal, but the deductible was projected to increase for 2014. Dunnegan worked with Warner to find a new group health insurance plan for the firm. On November 25, 2013, Warner sent Dunnegan an email attaching a summary chart of various group health plans for 2014. As an insurance broker, Warner had access to various plan documents and details through multiple sources. D&S ultimately selected a small business group plan from Aetna known as the Aetna New York "Silver OAMC 2000 80/60 HSA PY" ("2014 Aetna NY Silver Plan").

Under New York law, the Department of Financial Services ("DFS") regulates small business group health insurance plans in New York and all health insurance providers are required to submit their small business policies for DFS review and approval. DFS approved of the 2014 Aetna NY Silver Plan in October 2013. Once approved, Aetna could not lawfully change the terms of the plan without DFS approval.

On December 18, 2013, D&S and each of its six employees sent completed applications for the 2014 Aetna NY Silver Plan to Warner. The application that Dunnegan executed on behalf of D&S contained, among other things, the following provisions:

The plan documents, including the policy and certificate, will determine the contractual provisions, including procedures, exclusions, and limitations relating to the plan and will govern in the event they conflict with any benefits comparison, summary or other description of the plan.

...

.... I understand that this application will form a part of the Group Agreement or Group Policy issued by Aetna, and by my signature below I agree to be bound by the terms and conditions of that Group Agreement or Group Policy.

No. 20-3148, App'x at 126.

II. January 9 Document and February 19 Document

On January 8, 2014, Aetna sent Warner an email to inform him that Aetna had approved D&S's application. On January 9, 2014, Aetna sent D&S a five-page document titled "Final Rates." This document contained general information about the 2014 Aetna NY Silver Plan that D&S selected, including the total monthly premium, coinsurance levels, and deductible. The January 9 Document disclosed that "[t]his preliminary rate sheet should be read in conjunction with the more detailed benefit descriptions, exclusions and limitations, and underwriting guidelines contained in your product brochures. For more information, please contact your licensed Agent or Sales Representative." No. 20-3148, App'x at 162. There were no other files attached to the January 9 Document. Warner testified that the January 9 Document "obviously" did not have every term and condition associated with the 2014 Aetna NY Silver Plan. No. 20-3148, App'x at 88, at 98:19-23. At trial, Dunnegan testified that "when I originally got the [January 9 Document] handed to me by [the office manager] on January 9th, my initial reaction was there's more to this; where's the rest of it?" No. 20-3148, App'x at 110, at 482:20-22. D&S sent the executed document to Aetna on January 9, 2014.

On February 19, Aetna mailed a form letter to D&S enclosing a document purporting to be a group insurance policy. The February 19 Document did not deviate from the model language approved by DFS. Before February 19, 2014, the draft of the February 19 Document existed only in electronic form and was not publicly available. But detailed information about the plan was available to Aetna employees beginning in November 2013, after the plans had been approved by DFS. Aetna employees could access this information to answer questions about benefits under the 2014 Aetna NY Silver Plan.

III. Fisher's EffexorXR Prescription

The February 19 Document included the following clause:

An additional charge may apply when a Prescription Drug on a higher tier is dispensed at Your or Your Provider's request, when a chemically equivalent Prescription Drug is available on a lower tier unless We approve coverage at the higher tier. You will have to pay the difference between the cost of the Prescription

...