United States Court of Appeals For the Seventh Circuit ____________________ No. 22-2210 MEGAN DANIELS, et al., Plaintiffs-Appellants, v. UNITED HEALTHCARE SERVICES, INC. and UNITED BEHAVIORAL HEALTH, Defendants-Appellees. ____________________

Appeal from the United States District Court for the Western District of Wisconsin. No. 3:19-cv-01038 — William M. Conley, Judge. ____________________

ARGUED FEBRUARY 22, 2023 — DECIDED JULY 17, 2023 ____________________

Before HAMILTON, BRENNAN, and JACKSON-AKIWUMI, Cir- cuit Judges. BRENNAN, Circuit Judge. Plaintiffs Megan, Chris, and Betsy Daniels allege United HealthCare 1 wrongly denied insurance

1 The Daniels sued both United HealthCare and United Behavioral Health. United HealthCare is the named entity on the Summary Plan De- scription, but correspondence regarding Megan’s mental health coverage 2 No. 22-2210 coverage for mental health services. The district court dis- missed each of plaintiffs’ claims, including for breach of con- tract, bad faith, punitive damages, and statutory interest for late payments. Because Wisconsin law does not permit the Daniels to bring these claims against United HealthCare, we affirm the judgment of the district court. I. Background Plaintiffs Chris and Betsy Daniels work for South Milwau- kee School District. Through the School District, the Daniels contracted for a health insurance plan entitled “School Dis- trict of South Milwaukee Choice Plus Plan 1” (“the Plan”).2 The School District, per the Summary Plan Description, “self- funds” the Plan. This means the School District, not an outside insurer, bears sole financial responsibility for payment of Plan benefits. The School District is also the Plan administrator and named fiduciary. For help with day-to-day Plan operation, the School District contracted with United HealthCare to serve as the Plan’s third-party claims administrator. In that role, United HealthCare has responsibility and authority to deny or approve claims but is not financially liable for paying benefits—that obligation remains with the School District. United HealthCare thus has no contractual relationship with Plan participants. We understand this arrangement to be com- mon in the industry.

came from United Behavioral Health. Because any distinction between the two entities is immaterial to our analysis, we refer to the defendants col- lectively as United HealthCare. 2The Daniels’s plan is a governmental plan, so the Employee Retire- ment Income Security Act does not control. 29 U.S.C. § 1003(b)(1). No. 22-2210 3

The contours of the Daniels’s health insurance coverage took on new importance in 2017, when Megan Daniels—Chris and Betsy’s daughter covered under her parents’ policy—suf- fered a mental health emergency. Chris and Betsy sought in- patient mental health treatment for Megan and enrolled her in the Nashotah Program at Rogers Memorial Hospital. As claims administrator, United HealthCare approved Megan for a total of 24 days of inpatient treatment. It then informed the Daniels that it would not approve additional days. Both the Daniels and Megan’s doctors disagreed with this coverage decision, so they appealed internally within United HealthCare. In the meantime, the Daniels elected to continue Megan’s inpatient treatment. The appeals proved fruitless, and the Daniels received a final denial of coverage notice in May 2017. All in, United HealthCare approved payment for $30,755.33 of Megan’s treatment which, according to the Dan- iels, left most of Megan’s treatment expenses uncovered. The Da