Hainey v. Sag-Aftra Health Plan
| Docket Number | Civil Action 8:21-cv-02618-PX |
| Decision Date | 24 May 2023 |
| Parties | ROBERT HAINEY, et al., Plaintiffs, v. SAG-AFTRA HEALTH PLAN, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
In this ERISA[1] case, Defendants the Screen Actors Guild-American Federation of Television and Radio Artists (“SAG-AFTRA”) Health Plan and the Board of Trustees (the “Board”) for the SAG-AFTRA Health Plan move to dismiss the Amended Complaint and strike the demand for jury trial. ECF No. 18. Plaintiffs Robert and Rosemary Hainey (“the Haineys”) have responded to the motion; they also separately move to strike certain exhibits and for leave to file a Second Amended Complaint. ECF Nos. 24 & 31. The motions are fully briefed and no hearing is necessary. See Loc. R. 105.6. For the following reasons, Defendants' motion to dismiss is DENIED IN PART AND GRANTED IN PART and Plaintiffs' motions to strike and for leave to file the Second Amended Complaint are DENIED.
In 2012, two unions, the Screen Actors Guild (“SAG”) and the American Federation of Television and Radio Artists (“AFTRA”), merged to become a single union representing actors, broadcast journalists, recording artists, and other media professionals. SAG-AFTRA About, https://www.sagaftra.org/about (last visited Apr. 17, 2023). In 2017, the Union also merged its previous health plans into one, the new SAG-AFTRA Health Plan. ECF No. 17 ¶ 9; see ECF No. 18-1 at 7. The SAG-AFTRA Health Plan is an employee welfare benefit plan covered under ERISA. Id. ¶ 10. The Defendant Board of Trustees acts as the Plan administrator. Id. ¶ 13.
Between 1973 and 1995, Mr. Hainey was a member of AFTRA. Id. ¶ 21. AFTRA offered certain postretirement benefits to union members, including Medicare supplemental health coverage to those aged 65 years or older who met certain eligibility requirements. Id. ¶¶ 22-23, 31. In 1995, Mr. Hainey received an earnings statement from AFTRA confirming that he met the eligibility requirements to obtain postretirement benefits. Id. ¶ 34. For the next twenty years, Mr. Hainey worked in a position unaffiliated with AFTRA until 2016, at which point he applied to retire and receive his AFTRA pension. Id. ¶¶ 46-47.
After Mr. Hainey retired, he and his wife applied for health coverage under the SAGAFTRA Health Plan for the 2017 calendar year. Id. ¶¶ 48-50, 65. Under the terms of the Plan at that time, Mr. Hainey received supplemental Medicare coverage, and Mrs. Hainey received primary health insurance as a dependent spouse. Id. ¶ 52; see ECF No. 18-1 at 10. The Haineys retained the SAG-AFTRA Health Plan from January 1, 2017, through December 31, 2020. Id. ¶ 65.
In the summer of 2020, the Board announced several anticipated changes to the Plan slated to go into effect in January 2021. Id. ¶¶ 65, 70; see ECF No. 18-1 at 10. Pertinent to retirees like Mr. Hainey, the 2021 Plan would eliminate supplemental Medicare coverage and instead provide eligible enrollees with the option to purchase individual insurance on a private Medicare exchange offered by an online platform called Via Benefits. Id. ¶ 67. These eligible enrollees are termed “Senior Performers”; they are retirees, aged 65 or older, receiving a SAG or AFTRA pension benefit, with sufficient years of covered employment. Id. ¶ 48; see ECF No.. 18-1 at 10. Those who opted into coverage through Via Benefits would receive a monthly subsidy through a Health Reimbursement Account (“HRA”). Id. ¶ 66.
In the following months, the Board sent Plaintiffs a series of letters and other materials about the 2021 Plan. See ECF Nos. 18-10, 18-11, 18-12. The Haineys do not dispute having received these communications. See ECF Nos. 24 & 29. In August 2020, the Haineys received a newsletter that detailed “big changes” to how SAG-AFTRA would “offer coverage for our Retirees.” ECF No. 18-10 at 12. The newsletter informed retirees with “Senior Performer” status that they would “move into our SAG-AFTRA Health Plan / Via Benefits program” where “you can shop with Via Benefits for a range of plans and supplement your Medicare coverage.” Id. The newsletter also explained that for those transitioning to the Via Benefits program, “current SAG-AFTRA Health Plan premiums and coverage will end on December 31, 2020.” Id. at 15. The newsletter repeatedly encouraged members to obtain more information through the Plan's website or through its call center and included website links which directed users to a more robust description of the 2021 Plan. See, e.g., id. at 10, 11, 17.
On October 12, 2020, Defendants sent a personalized letter to Mr. Hainey that also explained the upcoming Plan changes. ECF No. 18-11. The letter stated that, “[b]ased on our evaluation” of certain eligibility requirements, “you will move into our new SAG-AFTRA Health Plan /Via Benefits Program.” Id. at 2. In bold type, the letter advised: Id.
Four days later, on October 16, 2020, Mr. Hainey submitted a grievance letter to the Plan through its online portal and via first class mail (the “October 2020 grievance” or “grievance”). ECF No. 17 ¶ 72. In the grievance, Mr. Hainey expressed his concerns and doubts about the legality of the proposed Plan changes. Id.; see ECF No. 1-2 at 7-12.[2] Mr. Hainey wrote that from 1974 to 1995, his employers “contributed 21 years of [his] deferred income to the Taft-Hartley Fund,” and that, as a result, he retained a “running balance” of more than $244,000 in a “welfare benefit trust.” ECF No. 1-2 at 7. In Mr. Hainey's view, the 2021 Plan-which now would require him to purchase supplemental Medicare coverage through Via Benefits- somehow “unlawfully divest[ed]” him of those earlier contributions. Id. at 8.
The grievance also requested copies various records from the Board, to include Plan documents, annual reports, recent financial reports and audits, and information regarding Mr. Hainey's employer contributions to AFTRA's welfare benefit fund for the 1974-1995 period. ECF No. 17 ¶ 73; see ECF No. 1-2 at 11-12. On October 19, 2020, Mr. Hainey sent separate correspondence requesting copies of collective bargaining agreements covering his 1974-1995 employment, Plan trust agreements, and additional regulatory and financial filings. Id. ¶ 75; ECF No. 1-2 at 17.
Defendants did not respond to the grievance or the October 19 correspondence. Mr. Hainey next submitted written “reminders” to Defendants on November 20, 2020, December 21, 2020, and January 20, 2021. In each letter, Mr. Hainey reiterated his previous request for documents. Id. ¶ 76.
Although Mr. Hainey never enrolled in the 2021 Plan, Mrs. Hainey had attempted separate enrollment through the Plan's online portal. Id. ¶ 87. Mrs. Hainey certified that she was not employed or otherwise able to obtain health coverage through another employer, thus indicating she was eligible for primary coverage through Mr. Hainey. She completed similar certifications again in January and early February 2021 to demonstrate her eligibility. Id. ¶¶ 94 96. Mrs. Hainey also prepaid premiums for coverage through June 2021. Id. ¶ 91. But on February 23, 2021, Mrs. Hainey's coverage was discontinued because Mr. Hainey had not enrolled in the Plan. To date, the Plan has not returned those premiums to Mrs. Hainey even though it canceled her coverage. Id. ¶¶ 97, 103. Once the Plan notified Mrs. Hainey that she would not be covered for 2021, she had to purchase a replacement plan at a higher cost and with less coverage. Id. ¶ 99. The Plan also refused to cover a long-term procedure for Mr. Hainey that straddled the 2020-2021 Plans. Id. ¶ 112.
On October 12, 2021, the Haineys filed this lawsuit, challenging the legality of the Plan changes, the cancellation of Plan benefits, and other alleged malfeasance on the part of the Plan. ECF No. 1. After a premotions conference with the Court,[3] the Haineys filed an Amended Complaint on January 21, 2022. ECF No. 17. Defendants timely moved to dismiss the Amended Complaint. ECF No. 18. In response, the Haineys separately moved to strike Exhibits 1 through 4 and 6, attached to the Defendants' motion (ECF No. 24), and after Defendants replied, the Haineys were granted leave to file a sur-reply. ECF Nos. 26 & 29. While these motions were pending, the Haineys moved for leave to file a Second Amended Complaint, which is also fully briefed. ECF Nos. 31, 34 & 38.
The Court turns first to the Haineys' motion to strike the attachments to Defendants' motion to dismiss.
Defendants attach several exhibits to their motion, including the 2021 Plan's Summary Plan Description (“SPD”) and Plan documents for the 2021 HRA; the 2017 Plan's SPD; the AFTRA Plan's 2011 SPD and July 2016 Summary of Material Modifications; and Plan documents for the 1987 AFTRA Health Plan. ECF No. 24-1 at 9-10; see ECF Nos. 18-4, 18-5, 18-6, 18-7, 18-9. Plaintiffs argue that the documents should be stricken because Defendants never furnished them in advance of litigation. Id. at 10. Defendants respond that Exhibits 1 and 2 were supplied to Plaintiffs before they filed the Amended Complaint, and all documents are otherwise integral to the claims. ECF No. 26 at 11 n.3.
At the motion to dismiss stage, the Court may consider documents that are “explicitly incorporated into the complaint by reference” or otherwise integral to the complaint provided no dispute exists as to the document's authenticity. Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016) (citations omitted). A document is considered integral where the complaint “relies heavily upon its terms and effect.” Id. (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)...
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