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Text of Sixth Circuit Opinion: Concealment of Administrative Fees by Blue Cross Blue Shield Was Breach of Fiduciary Duty to Plan Sponsor (PDF)
U.S. Court of Appeals for the Sixth Circuit Link to more items from this source
May 15, 2014
"[W]hile a formal trust was never created in this case, common law supports the conclusion that [Blue Cross Blue Shield of Michigan (BCBSM)] was holding the funds wired by Hi-Lex 'in trust' for the purpose of paying plan beneficiaries' health claims and administrative costs.... BCBSM committed fraud by knowingly misrepresenting and omitting information about the Disputed Fees in contract documents. Specifically, the [administrative services agreement], the Schedule As, the monthly claims reports, and the quarterly and annual settlements all misled Hi-Lex into believing that the disclosed administrative fees and charges were the only form of compensation that BCBSM retained for itself ... Hi-Lex can validly invoke the extended six-year period permitted by the fraud or concealment exception." [Hi-Lex Controls v. Blue Cross and Blue Shield of Michigan, Nos. 13-1773/1859 (6th Cir. May 14, 2014)]

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