Eighth Circuit Affirms No Requirement to Exhaust Administrative Remedies Absent Review Language in Plan Document

On February 23, 2023, in Yates v. Symetra Life Insurance Company, the Eighth Circuit Court of Appeals (the “Eighth Circuit”) affirmed a district court ruling that an ERISA plan participant is not required to exhaust administrative remedies before challenging a benefit denial in court when the written plan documents do not mention any review process or administrative remedies to be exhausted.

The case involved employee Terri M. Yates, who worked at Phelps County Bank and participated in the company’s ERISA employee benefit plan (the “Plan”), which also covered her husband as a dependent. The Plan was issued and managed by Symetra Life Insurance Company (“Symetra”), and the various benefits were summarized in an employee benefits insurance certificate distributed to participants. Among the Plan’s benefits was an accidental death insurance policy, which paid benefits if a covered individual suffered certain losses, including a loss of life due to an accidental bodily injury that was sudden and unforeseen. However, the policy excluded coverage for losses caused by “intentionally self-inflicted injury.”

After Yates’s husband died of a heroin overdose, she sought accidental death benefits under the Plan. Symetra denied her claim. The denial letter explained that Yates could request a review of Symetra’s decision by submitting a written request within 60 days. The letter detailed the internal review process and noted that Yates could file a civil ERISA lawsuit after completing Symetra’s appeal process. However, the written Plan documents issued by Symetra did not mention this internal review process nor provide for any other appeal procedures following a benefit denial.

Yates did not request that Symetra review its decision; instead, she sued Symetra for a denial of ERISA benefits. Symetra argued that Yates’s suit was barred by her failure to exhaust the Plan’s internal review procedures described in the denial letter. (ERISA allows a plan participant to sue to recover plan benefits. However, a participant generally must first pursue and exhaust the plan’s administrative remedies, or their legal claims for relief may be barred). The district court reviewing the case concluded that Yates was not subject to an exhaustion requirement because the written Plan documents did not describe any appeal or review procedures for her to exhaust. As a result, the district court granted summary judgment in Yates’s favor.

Symetra appealed the district court’s decision to the Eighth Circuit. On appeal, Symetra conceded that the written Plan documents did not provide for any internal review procedures following a benefit denial. Nonetheless, Symetra argued that the denial letter, which specified the Plan’s internal review process, triggered an exhaustion requirement. Alternatively, Symetra asserted that Yates’s husband’s death was caused by his intentional act of using heroin and, therefore, was excluded from the accidental death coverage as an “intentionally self-inflicted injury.”

On appeal, the Eighth Circuit affirmed the district court’s ruling that an ERISA plan participant is not required to exhaust administrative remedies before suing for a benefit denial in court when the written plan documents fail to reference any review process or administrative remedies. The Eighth Circuit explained this opinion was consistent with their prior cases and noted that the Sixth Circuit recently addressed the same issue and concluded that a plan could not avail itself of an exhaustion requirement unless the underlying plan documents detail the required internal appeal procedures. The Eighth Circuit also emphasized the primacy of written plan documents when resolving ERISA claims.

ERISA plans must establish and maintain reasonable procedures governing the filing of benefit claims and appeals that participants can rely upon. These procedures must be described in the summary plan description. The Eighth Circuit observed that Symetra’s written Plan documents did not appear to satisfy these requirements and rejected Symetra’s argument that the denial letter triggered an exhaustion requirement. In the Eighth Circuit’s opinion, requiring Yates to exhaust internal review procedures that cannot be found in the Plan documents would render her reliance on those documents largely meaningless.

After determining Yates’s suit was not barred by an exhaustion requirement, the Eighth Circuit reviewed de novo the merits of her benefit denial claim. Symetra argued it properly denied Yates’s claim for accidental death benefits under an “intentionally self-inflicted injury” exclusion to coverage. The Eighth Circuit concluded that the plain language of Symetra’s “intentionally self-inflicted injury” exclusion did not apply to unintended injuries like Yates’s husband’s heroin overdose. Thus, Symetra’s denial of Yates’s claim for accidental death benefits based on that exclusion was erroneous. The district court had reached the same conclusion; accordingly, the Eighth Circuit affirmed the district court’s judgment.

For plan administrators, this case highlights the importance of ensuring their ERISA plan documents reflect required information, including a plan’s procedures governing the filing of claims and appeals. Importantly, these procedures must also be described in the summary plan description distributed to plan participants. As the case illustrates, if a plan fails to meet these disclosure requirements, a participant may be able to bring a lawsuit for a denial of benefits before exhausting the plan’s internal claim review requirements.

Yates v. Symetra Life Insurance Company »