In an important decision reaffirming the procedural protections afforded to claimants under ERISA, the Ninth Circuit, in an unpublished opinion, recently vacated a district court judgment in Solis v. UnitedHealthcare Insurance Co., No. 24-2412, and remanded the matter due to UnitedHealthcare Insurance Company’s (“United”) multiple procedural deficiencies in the claims denial process. The decision highlights the critical importance of clarity and specificity in benefit denial notices in ERISA plan matters and reinforces long-standing precedent requiring ERISA plan administrators to provide meaningful notice to their insureds/plan participants when denying their claims so that claimants can adequately respond during the administrative review process.

The case arose from UnitedHealthcare’s denial of medical benefit claims related to hiatal hernia repairs performed in the same surgical session as gastric sleeve procedures. Plaintiffs Jannet Solis and Michael Ortega challenged the denials under ERISA, arguing that United failed to provide adequate reasons for the denials during the administrative process. The Ninth Circuit agreed, finding that United’s denial letters did not cite specific plan provisions nor explain with sufficient detail the basis for the claim denial—both clear violations of ERISA’s procedural requirements under 29 U.S.C. § 1133 and its implementing regulations.

The panel first addressed the standard of review and ruled that the district court correctly found that it had to review United’s claims denial for abuse of discretion because United’s plan agreement granted United full discretionary authority to adjudicate claims.

The panel then addressed whether United committed procedural violations under ERISA and found that it did. As the court explained, ERISA requires that plan administrators give claimants the “specific reasons for such denial” and cite the “specific plan provisions” on which the decision is based. See 29 U.S.C. § 1133(1); 29 C.F.R. § 2560.503–1(g)(i). In this case, United’s initial denial and appeal letters failed to meet that standard, merely stating that the procedure “may be considered included” within another billed code, and therefore “cannot be separately reimbursed.” The Ninth Circuit found these statements conclusory and vague, noting that “[United’s] explanatory deficiencies during the administrative process failed to provide meaningful engagement and denied Plaintiffs the opportunity to address the specific bases for United’s denials. This violated ERISA’s requirements.”

The panel explained that if, for example, “United’s denial of the appeal had specified that the administrator determined the hernia repair was incidental to the gastric sleeve procedure because there was only a single incision point, then Plaintiffs could have responded by providing additional evidence of different incision points. But United, by failing to provide such specificity, denied claimants the opportunity to adequately respond during the administrative claims process.”

The court emphasized that administrators cannot shift their justification for denial during litigation. Citing Harlick v. Blue Shield of California, 686 F.3d 699, 719–20 (9th Cir. 2012), the panel wrote: “A court will not allow an ERISA plan administrator to assert a reason for denial of benefits that it had not given during the administrative process.” United’s attempts to justify its denials during litigation—by referencing surgical techniques and procedural overlap—were unavailing because these explanations were never shared with the Plaintiffs during their administrative appeal.

Although the district court correctly identified United’s procedural irregularities and found them troubling, it erred by refusing to allow Plaintiffs to augment the administrative record to respond to the new justifications United presented during litigation. Under the Ninth Circuit’s en banc decision in Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 973–74 (9th Cir. 2006), procedural irregularities trigger the need to allow claimants to submit supplemental evidence to “recreate what the administrative record would have been had [the insurer’s] procedure been correct.” By denying this opportunity, the district court effectively insulated United’s deficient denial process from proper review.

In vacating the district court’s judgment, the Ninth Circuit clarified that although the district court was not required to enter judgment in favor of Plaintiffs, it was obligated to permit appropriate record supplementation or remand to the plan administrator for reconsideration. “[F]urther factfinding is necessary before the district court can decide,” the court concluded, remanding the case for proceedings consistent with Abatie and Demer v. IBM Corp. LTD Plan, 835 F.3d 893, 907 (9th Cir. 2016).

This case serves as a reminder to ERISA plan administrators that procedural compliance is not a mere formality. The denial of benefits must be accompanied by a clear explanation grounded in the actual terms of the plan. As this case illustrates, failure to meet ERISA’s procedural standards may ultimately invalidate an otherwise discretionary claim determination. Plan participants and providers alike should be vigilant in holding insurers to these statutory obligations, and experienced ERISA counsel can play a crucial role in identifying and challenging such violations.