Glaus v. Kaiser Foundation Health Plan

The Northern District of California granted defendant Kaiser Foundation Health Plan’s (“Kaiser”) motion to dismiss against Nicole Glaus (“Glaus”). Glaus alleged that she recovered a settlement of $4,250 from the individual responsible for her auto accident, and that Kaiser did not credit her with the “cost-sharing payments she had made out-of-pocket.”

Glaus alleged in federal district court that, under ERISA, she was entitled to a declaration that Kaiser’s failure to credit the cost-sharing payments constituted a violation of the Stead Plan and a breach of Kaiser’s fiduciary duty to her, as well as an order requiring Kaiser to reimburse her for the cost-sharing payments, which were $20.

The court first found that where both parties have offered evidence outside of the pleadings, the court may determine whether such evidence demonstrates a failure to exhaust administrative remedies. Here, Glaus conceded that she did not submit a grievance in the manner set forth in the Evidence of Coverage (“EOC”) provision. Because the EOC provision affording participants the ability to submit a grievance was an administrative remedy available to Glaus, she was required to exhaust that remedy before filing suit.

Glaus also contended that she should be excused from having to exhaust her administrative remedies because the pamphlet did not advise her of those administrative remedies. However, the court found that Glaus failed to show how a procedural violation constituted a cognizable excuse for her failure to exhaust. Furthermore, exhaustion was not excused because Glaus failed to show any statement by her former employer that was in fact misleading. Therefore, the court held that Glaus failed to show that she was excused from having to exhaust her administrative remedies.