                          UNITED STATES COURT OF APPEALS
                                  For the Fifth Circuit


                                          No. 97-30874


                               SCOTT FALLO; KASEY FALLO,

                                                                             Plaintiffs-Appellants,

                                            VERSUS

                              PICCADILLY CAFETERIAS, INC.,

                                                                             Defendant-Appellee.


                          Appeal from the United States District Court
                             for the Eastern District of Louisiana


                                          May 29, 1998
Before WISDOM, JOLLY, and HIGGINBOTHAM, Circuit Judges.

WISDOM, Circuit Judge:

       Following the termination of Scott Fallo’s employment with Piccadilly Cafeterias, Scott and

Kasey Fallo attempted to extend their health insurance coverage under the provisions of the

Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)1 and Piccadilly’s Health

Benefits Plan (t he Plan) because of Kasey Fallo’s disability. The district court denied the Fallos

motion for summary judgment and granted Piccadilly’s cross-motion for summary judgment, finding

that the Fallos did not meet the requirements for this extended health insurance coverage. We find

that the Fallos complied with the requirements of Piccadilly’s Summary Plan Description (SPD) and

are, therefore, entitled to the extended health insurance coverage. We reverse and remand.

                                                I.

       Scott Fallo ended his employment with Piccadilly in February 1992. Before leaving, he

expressed his intention to extend health benefits under COBRA for an additional 18 months. During


   1
       29 U.S.C. § 1161, et seq.
this period of continuation coverage, the Fallos paid their required premiums. In January 1993,

Fallo’s wife, Kasey, became pregnant. Kasey Fallo is a diabetic and her pregnancy was marked by

serious complications. The 18 month period of continuation coverage was scheduled to end on

August 25, 1993. On August 23, 1993, Scott Fallo’s father, by certified mail, sent Piccadilly notice

that Kasey Fallo was “disabled” by her pregnancy and that she relied upon her disability to extend

further their health insurance benefits under COBRA. The Fallos mailed a check dated September

5, 1993 to Piccadilly to cover their premiums. On September 8, 1993, Piccadilly responded that it

would not extend coverage unless Kasey Fallo obtained a determination “that she is disabled for

purposes of Social Security” within 60 days of August 25, the date that the initial extension of

coverage ended. Piccadilly returned the Fallos premium check on September 27, 1993. Piccadilly

eventually denied coverage and this litigation ensued.

       The Fallos filed for benefits and other damages under the Employment Retirement Income

Security Act (ERISA)2 and the Americans with Disabilities Act.3 While this suit was pending, Kasey

Fallo applied to the Social Security Administration for a determination that she was disabled.4

       On April 4, 1994, Piccadilly filed its first motion for summary judgment. On June 14, 1994,

the district court granted that motion in part, finding that the Fallos were not entitled to indefinite

health insurance coverage under COBRA and the Americans with Disabilities Act did not apply. The

district court denied the motion for Summary Judgment to the extent that the Fallos were seeking an

eleven month health insurance extension because of Kasey Fallo’s disability.

       Piccadilly filed a Second Motion for summary judgment, arguing that Kasey Fallo’s failure

   2
       29 U.S.C. § 1991, et seq.
   3
        The Fallos filed suit in the Civil District Court in New Orleans on February 10, 1994.
Piccadilly removed this action to the United States District Court for the Eastern District of
Louisiana , invoking the court’s federal question jurisdiction. 28 U.S.C. § 1331.
  4
        The parties disagree as to when the Fallos filed this application. The Fallos maintain that they
filed their application in April of 1994. Piccadilly maintains that the Fallos applied for this
determination in June of 1994. Because we find that the Fallo’s right to continuation coverage is not
dependent upon the date the Social Security Administration disability proceeding is initiated, we need
not resolve this dispute.

                                                  2
to obtain a Social Security Administration disability determination within 18 months of Scott Fallo’s

termination precluded her request for a disability extension. The district court found that, to receive

the disability extension, the Fallos needed to initiate the Social Security Administration disability

proceedings within the initial 18 months of extended coverage under COBRA. The district court

found that an issue of fact as to when the proceedings were initiated prevented summary judgment.

        Next, Piccadilly filed a motion to stay the proceedings in the district court pending the

outcome of the Fallos application.5 Because the Social Security Administration’s decision could be

dispositive of the outcome of this suit, the district court granted the stay.

        In November 1994, the Social Security Administration determined that Kasey Fallo was

disabled for Social Security purposes between March 1993 and October 1994. The Social Security

Administration noted that the Fallos application was filed on April 14, 1994. Relying upon the

disability finding, the Fallos moved for summary judgment on their entitlement to the additional 11

months of health insurance coverage. Piccadilly filed a cross-motion for summary judgment, arguing

that the Fallos were not entitled to the extension because they did not apply to the Social Security

Administration for a disability determination until several months after the expiration of the initial 18

month extension under COBRA. The district court denied the Fallos motion and granted Piccadilly’s

cross-motion for summary judgment. The Fallos appeal.

                                                   II.

        Under the provisions of COBRA, a qualified beneficiary may extend the period of health

   5
        To justify the stay, Piccadilly wrote:

        As the Court is aware, at the heart of this dispute is whether or not the plaintiff, Kasey
        Fallo, is or ever has been disabled as determined by the Social Security
        Administration. If Ms. Fallo is not now or never has been disabled according to the
        Administration’s guidelines, t hen, in that event, the Court would be required to
        dismiss this action and Ms. Fallo would not be entitled to eleven (11) additional
        months of benefits pursuant to the Piccadilly Cafeterias, Inc. Health Benefit Plan over
        and above the original eighteen (18) months of COBRA coverage. On the other hand,
        if Ms. Fallo was in fact disabled, and if the disability is determined to have begun
        during the eighteen months of COBRA coverage, then she would be entitled to the
        additional coverage.


                                                    3
insurance coverage from the date of a qualifying event until at least 18 m onths from that date.6

Termination of employment is a qualifying event that triggers this extended coverage.7 The qualified

beneficiary may extend coverage for an additional period of 11 months for a total of 29 months from

the termination of employment, if the qualified beneficiary provides notice within the initial 18 months

of extended coverage that he or she was found to have been disabled under Title II or XVI of the

Social Security Act.8 This disability must have been present at the time of or within 60 days of the

qualifying event such as the termination of employment.9 The qualified beneficiary may be required

to pay a premium for the extended coverage.10 The group health plan administrator has a duty to

notify the qualified beneficiaries of their right to extend coverage under COBRA at the

commencement of the beneficiary’s coverage under the plan.11 The qualified beneficiary has the duty

to notify the administrator of the plan of a qualifying event and a social security disability finding.12

        Of course these rules are the minimum requirement.13 An employer may provide greater

continuation benefits for its employees under their health insurance plans. Here, Piccadilly’s Health

Benefits Plan tracks the language of the statute. It provides:

        The coverage under this provision will extend for at least the period beginning on the
        date of a qualifying event and ending not earlier that the earliest of the following:

                                               *****
        2. in the case of a qualified beneficiary disabled upon the Employee’s termination .
        . . the date which is twenty-nine (29) months after the qualifying event provided the
        qualified beneficiary provides the Plan Administrator with notice of Social Security

   6
        29 U.S.C. § 1162 (2) (A) (I).
   7
        29 U.S.C. § 1163 (2).
   8
        29 U.S.C. § 1162(2) (A).
   9
        29 U.S.C. § 1162(2) (A).
   10
        29 U.S.C. § 1162 (3).
   11
        29 U.S.C. § 1166 (a)(1).
   12
        29 U.S.C. § 1166 (a)(3).
   13
        See Branch v. G. Bernd Co., 764 F. Supp. 1527, 1536-7 (M.D. Ga. 1991).

                                                   4
        disability determination within sixty (60) days of the disability determination and
        within eighteen (18) months of the qualifying event.

Both the Plan and COBRA contemplate that the qualified beneficiary will provide notice of the Social

Security disability finding before the expiration of the initial 18 month period of extended benefits.

The Fallos father sent written notice of a disability to the administrator within this time, but the Fallos

had not obtained a Social Security disability determination by the end of the 18 months.

Nevertheless, the Fallos argue that they are entitled to the additional 11 months of extended health

insurance coverage because of Kasey Fallo’s disability.           They rely upon the Summary Plan

Description (SPD) provided to them by Piccadilly to explain their benefits under the Plan. We agree

that they are entitled to this 11 month extension.

        ERISA requires plan administrators to provide its participants with an accurate,

comprehensive, and easy to understand summary of the Plan.14 The SPD is intended to simplify the

language of the plan, allowing the average plan participant to understand his rights and duties. The

SPD is interpreted as a whole.15 If the language of the SPD conflicts with the language of the Plan,

the SPD is given effect.16 Ambiguities in the SPD are resolved in favor of the qualified beneficiary.17

We have rejected the notion that the SPD should be interpreted in the light of the language of the

Plan.18 It is the SPD and not the Plan upon which the average beneficiary has relied; the SPD most

nearly represents the intention of the parties.

   14
        “The summary plan description . . . shall be written in a manner calculated to be understood
by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably
apprise such participants and beneficiaries of their rights and obligations under the plan.” 29 U.S.C.
§ 1022 (a) (1).
   15
        Hansen v. Continental Ins. Co., 940 F.2d 971, 981 (5th Cir. 1991).
   16
       Id. at 982. This rule has been accepted by several circuits. See Sprague v. General Motors
Corp, 133 F.3d 388, 400 (6th Cir. 1998); Chiles v. Ceridian Corp., 95 F.3d 1505, 1515 (10th Cir.
1996); Jensen v. Sipco, Inc., 38 F.3d 945, 952 (8th Cir. 1994); Fuller v. FMC Corp., 4 F.3d 255,
261-2 (4th Cir. 1993); Sankier v. Hartford Life & Accident Ins. Co., 948 F.2d 1050, 1051 (7th Cir.
1991).
   17
        Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th Cir. 1997); Hansen, 940 F.2d at 982.
   18
        Hansen, 940 F.2d at 981-2.

                                                     5
        Piccadilly’s SPD describes the right to continuation coverage as follows:

        Additionally, the eighteen (18) month period may be extended for an extra eleven (11)
        months (to twenty-nine (29) months) if a person is determined to be disabled (for
        Social Security disability purposes) and the Employer is notified of that determination
        with[in] (60) days.

Unlike the language of the Plan and COBRA, this provision does not state that the qualified

beneficiary must send notice of a Social Security Administration disability finding before the end of

the initial 18 month extension, nor does the SPD state that the disability must exist at the time of the

qualifying event such as the termination of employment.19 In a case of conflict such as this, where

the requirements of the SPD are more lenient than those cont ained in the Plan, the SPD is

controlling.20 The beneficiaries do not need to look to the language of the Plan to fill any gaps left

by the SPD provisions because such a requirement would undermine the purpose of a simple, easy

to understand summary.21 Under the language of the SPD, then, the Fallos needed to obtain a Social

Security disability finding stating that Kasey Fallo was disabled during the 18 month initial extension22

and needed to notify Piccadilly’s plan administrator within 60 days of that determination.23 The Fallos


   19
         The SPD only requires that the notice of the disability finding be given within 60 days of the
disability finding. The Fallos met this requirement.
   20
         Hansen, 940 F.2d at 982. We acknowledge that the SPD is merely a summary of the Plan;
it cannot contain every term. The omission of certain provisions and terms from the SPD will not
alter the Plan. Sprague, 133 F.3d at 401. Where, as here, the SPD purports to set out the procedures
to obtain extended coverage but omits certain steps required by the Plan, the language of the SPD
is given effect.
   21
        Hansen, 940 F.2d at 982.
   22
       The language of the SPD does not support the district court’s interpretation that the Fallos
needed to initiate Social Security Administration disability proceedings before the end of the 18
month COBRA extension. In rejecting this position, we accept the interpretation of the SPD offered
by Piccadilly in its motion for a stay of proceedings. If Kasey Fallo was found to be disabled within
the 18 months of COBRA coverage, she was entitled to the disability extension. Otherwise, she was
not.
   23
         The Social Security Administration found Kasey Fallo disabled beginning March 1, 1993,
after her qualifying event -- Scott Fallo’s voluntarily termination of his employment with Piccadilly.
Although COBRA’s provision for the extension of coverage due to disability requires that disability
to exist at the time of the qualifying event, the language of SPD does not contain this limitation. The
broader language of the SPD controls.

                                                   6
met this requirement.24 Furthermore, the Fallos gave notice of their intent to extend coverage before

the expiration of the initial 18 month extension. On these facts, we find that the district court erred

in denying the Fallos motion for summary judgment and granting summary judgment for Piccadilly.

We reverse the district court’s decision, and remand this case for further proceedings.

                                                 III.

        Under COBRA, the Fallos are entitled to continued coverage that is identical to the coverage

provided to similarly situated beneficiaries under the Plan who have not incurred a qualifying event

such as the termination of employment.25 The Fallos do not receive a free ride, however. COBRA

specifically authorizes plan administrators to charge a premium for the continuation coverage.26

Piccadilly’s Plan and SPD both discuss the need to pay premiums to extend coverage. On remand,

then, the district court should determine the amount of the premiums owed by the Fallos to Piccadilly.

                                                 IV.

        In conclusion, we hold that the Fallos are entitled to the 11 month extension of benefits under

the Piccadilly Health Benefits Plan, as described in the SPD, because of Kasey Fallo’s disability. The

Fallos are to be charged the appropriate premium for that coverage. We REVERSE and REMAND.




   24
       The Social Security Administration found Kasey Fallo disabled in its order dated November
27, 1996. The Fallos gave notice of this determination within 60 days.
   25
        29 U.S.C. § 1162 (1).
   26
        See 29 U.S.C. § 1162 (3).

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