On June 13, 2013, in Kenseth v. Dean Health Plan, Inc., the US Court of Appeals for the Seventh Circuit addressed the scope of remedies available under ERISA Section 502(a)(3) for claims involving breach of fiduciary duty. Applying the Supreme Court's decision in CIGNA Corp. v. Amara, the Seventh Circuit concluded that money damages are available as an equitable remedy under Section 502(a)(3) if a participant can demonstrate that the plan fiduciary breached its fiduciary duty to the participant, and that the breach caused the participant damages.

The participant in Kenseth was advised by her doctor to undergo corrective surgery to address complications from an earlier surgery. An insurance certificate for the plan:

Although the representative informed the participant that the procedure would be covered, the plan later denied coverage for the surgery under an exclusion for services related to non-covered benefits. The participant brought suit under ERISA, claiming (among other things) that the plan breached its fiduciary duty by failing to provide the participant with a procedure for obtaining authoritative pre-approval of the surgery. In earlier proceedings, the case reached the Seventh Circuit, which:

On remand, the trial court concluded that it could not grant the participant the relief requested under ERISA even if the participant proved a breach of fiduciary duty. The court found that the participant's request that the plan hold her harmless for the cost of the surgery was essentially a request for compensatory damages that are unavailable as equitable relief under Section 502(a)(3). After the trial court's judgment, however, the Supreme Court decided CIGNA Corp. v. Amara, which addressed the types of equitable relief available under Section 502(a)(3). In Amara, the Supreme Court concluded that "equitable relief," as authorized under ERISA Section 502(a)(3), may take the form of money damages when the defendant is a trustee in breach of a fiduciary duty.

On appeal, the participant argued that Amara required the Seventh Circuit to reverse the trial court's ruling on remedies and remand.

The Seventh Circuit held that the participant may seek make-whole damages in the form of monetary compensation as an equitable remedy under ERISA Section 502(a)(3) if the participant can demonstrate that:

The Seventh Circuit noted parallels between the participant's claim and Amara, in which an employer provided misleading summary plan documents in announcing changes to its retirement plan. In Amara, the Supreme Court:

Applying Amara, the Seventh Circuit concluded that monetary compensation is not automatically considered legal rather than equitable for Section 502(a)(3) purposes. Rather, the participant could seek make-whole money damages as an equitable remedy under ERISA Section 502(a)(3) if the participant can demonstrate that:

Noting several shortcomings in the plan's certificate (for example, that it failed to warn participants that they could not rely on advice received through the customer service department), the Seventh Circuit concluded that the participant could bring a claim for make-whole damages against the plan fiduciary. In addition, regarding whether the plan's actions caused the participant harm, the court stated that the participant had created a genuine issue of fact regarding whether she could have avoided some or all of the costs incurred (for example, by testifying that she probably would not have undergone the procedure had the plan denied coverage in a timely manner). As a result, the Seventh Circuit reversed and remanded for further proceedings.

As the Seventh Circuit acknowledges, Amara "significantly altered" its understanding of the types of equitable relief available under ERISA Section 502(a)(3). Other circuit courts, too, have re-evaluated their remedies analysis in light of Amara. Under the new, broader interpretation, courts are concluding that it is no longer sufficient to simply characterize money damages as a legal remedy that is unavailable under Section 502(a)(3). Rather, fiduciary breach claims that could previously have been defeated on remedies grounds (for example, providing misinformation to participants and beneficiaries), might now be successful for claimants who can demonstrate breach of fiduciary duty and harm.