Corey Skelton v. Reliance Standard Life Ins Co, 33 F.4th 968

Background:

Davidson Hotels maintained an ERISA welfare plan and contracted with Reliance Standard Life to insure life benefits; the Policy gave Reliance discretionary, "final and binding" authority to interpret the Plan and determine eligibility.
Reliance had exclusive authority to approve supplemental life insurance for late applicants (requiring Evidence of Insurability, EOI); Reliance’s materials told applicants they would not be charged premiums for amounts subject to EOI until Reliance approved.
Skelton applied for maximum supplemental life insurance after a change in custody of her stepson; she received materials indicating EOI was required but there is a dispute whether Reliance received any completed EOI; she nevertheless was billed and paid premiums while on disability.
Davidson used bulk billing (one monthly check and a worksheet listing only totals) so Reliance’s system did not receive participant-level premium data or reliably track enrollment status between employer and insurer.
Skelton died; Davidson later informed Corey Skelton that Reliance had no record of an approved EOI and had treated the coverage as pending. District court granted summary judgment for Corey under ERISA fiduciary theories; Eighth Circuit affirmed.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Reliance an ERISA fiduciary for Skelton's supplemental enrollment/eligibility?	Reliance had discretionary authority to determine eligibility and thus was a fiduciary for enrollment and eligibility.	Reliance said it had fiduciary duties only for claims/eligibility decisions, not enrollment, and employer administered enrollment/records.	Reliance was a fiduciary for eligibility and enrollment under the Policy and its practices.
Did Reliance breach fiduciary duties (prudence and loyalty) by its enrollment system?	Reliance maintained a flawed system that failed to reconcile employer and insurer records, violating prudence and loyalty.	Reliance argued bulk-billing and employer remittance meant it lacked responsibility/knowledge of improper premiums.	Reliance breached duties by using an ineffective system and by profiting (receiving premiums) without approving coverage.
Did Reliance receive Skelton's premiums and thus profit at her expense?	Circumstantial record shows Skelton paid, Davidson received, and Davidson remitted all premiums monthly to Reliance; Reliance had no way to identify individual premiums.	Reliance said record does not prove whether Davidson forwarded the specific mistaken premiums.	Court inferred Reliance received the premiums; lack of direct naming in remittance systems does not create a genuine issue.
Can plaintiff recover benefits under §1132(a)(1)(B) (claim for plan benefits)?	Skelton argues he is owed benefits because coverage should have been effective without EOI based on the life event.	Reliance relies on administrative record and exhaustion requirements.	Court affirmed district finding that plaintiff failed to show internal exhaustion for the benefits claim; did not address merits.

Key Cases Cited

Prudential Ins. Co. of Am. v. Doe, 140 F.3d 785 (8th Cir. 1998) (insurer is a fiduciary when it interprets plan language and decides claims)
Kerns v. Benefit Tr. Life Ins. Co., 992 F.2d 214 (8th Cir. 1993) (fiduciary status is function-specific; insurer becomes fiduciary if documents or practices create obligation)
Silva v. Metro. Life Ins. Co., 762 F.3d 711 (8th Cir. 2014) (insurer with discretionary authority to interpret plan and determine eligibility is a plan fiduciary)
Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (entities making discretionary eligibility decisions are ERISA fiduciaries)
Varity Corp. v. Howe, 516 U.S. 489 (1996) (fiduciary duty of loyalty prohibits deceiving beneficiaries to save money)
Gordon v. CIGNA Corp., 890 F.3d 463 (4th Cir. 2018) (receipt of plan assets alone does not automatically create fiduciary duties; role and documents determine scope)