These articles have been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, October and November 2011 issues, @2011 by Steven J. Bruzonsky, Esq.
ERISA Plan Documents, Part 1
In order to determine the legal pros and cons of whether there is a valid ERISA healthplan lien (and sometimes a claimed ERISA short or long term disability lien), you should as a standard practice request plan documents. ERISA (Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq), at 29 U.S.C. § 1102(a)(1), requires that ”each employee benefit plan shall be established and maintained pursuant to a written instrument.” Mandatory features are set forth at 29 U.S.C. § 1102(b) and optional features are set forth at 29 U.S.C. § 1102(C). ERISA, at 29 U.S.C. § 1022, further requires that each employee benefit plan maintain a “Summary Plan Description”.
The following information regarding the “written plan”, the Summary of Material Modifications (SMM), the Summary Plan Description (SPD), the Form 5500 and attached Schedules, the Summary Annual Report (SAR), as well as information concerning plan administration, are from the U.S. Department of Labor, Employee Benefits Security Administration (EBSA), website at
(1) Each “written plan” has certain key elements, including awritten plan that describes the benefit structure and guides day-to-day operations; a trust fund to hold the plan's assets; a recordkeeping system to track the flow of monies going to and from the retirement plan; and documents to provide plan information to plan participants and the government. In some cases, ERISA plans may use a “wrap” document, by which the “written plan” incorporates by reference the applicable SPD, insurance policy or coverage certificate; or by which the “written plan” consolidates multiple employee welfare benefit plans into a single plan. (This “written instrument” is sometimes referred to as the “Plan Document”, “Master Plan”, or similar terms.)
(2) The Summary of Material Modifications (SMM) informs participants and beneficiaries of changes to the plan or to the information required to be in the SPD. The SMM or an updated SPD for a retirement plan must be furnished automatically to participants within 210 days after the end of the plan year in which the change was adopted.
(3) The Summary Plan Description (SPD) is the plan’s basic descriptive document. It is a plain language explanation of the plan and must be comprehensive enough to apprise participants of their rights and responsibilities under the plan. It also informs participants about the plan features and what to expect of the plan. Among other things, the SPD must include information about when and how employees become eligible to participate; the source of contributions and contribution levels; the vesting period, i.e., the length of time an employee must belong to a plan to receive benefits from it; how to file a claim for those benefits; and a participant’s basic rights and responsibilities under ERISA. This document is given to employees after they join the plan and to beneficiaries after they first receive benefits. SPDs must also be redistributed periodically.
(4) Plan Administrators generally are required to file a Form 5500 (which includes some attached Schedules) Annual Return/Report, which reports information about the plan and its operation to the U.S. Department of Labor, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). These disclosures are made available to participants and the public. Depending on the number and type of participants covered, the filing requirements vary. For more information on the forms, their instructions, and the filing requirements, see www.efast.dol.gov.
(5) The Summary Annual Report (SAR) outlines in narrative form the financial information in the plan’s Annual Report, the Form 5500, and is furnished annually to plan participants. Traditional defined benefit pension plans that are required to provide an annual plan funding notice are not required to furnish a SAR.
If you haven’t already, be sure to read my previous “Liens Corner” articles on ERISA liens, especially my article in the July-August 2011 issue concerning the U.S. Supreme Court decision in Cigna Corp. v. Amara, No. 09-804, 2011 U.S. Lexis 3540,563 U.S. ___ , 130 S. Ct. 1754 (5-16-2011), which holds that the “written instrument” required by ERISA (the Plan Document) is the controlling document and must include the subrogation/lien terms; that the plan’s sponsor executes and amends the plan, and that the SPD (see below) is merely a plan summary but not a binding document.
Part 2, in the next issue, is my latest ERISA plan document request.
ERISA Plan Documents, Part 2
My latest ERISA plan document request is set forth below, for your use:
(Date) CERTIFIED MAIL: Return Receipt Requested
(Name of Plan Administrator – should be set forth in SPD and/or Form 5500)
Plan Administrator for __________ Employee Benefit (Including Medical, Short and/or Long
Term Disability) Plan
City, State, Zip Code
Re: Our Client/Your Plan Participant or Beneficiary
(In Care of Our Law Firm):
Dear Plan Administrator for __________ Employee Benefit (Including Medical) Plan:
Pursuant to my right as a plan participant or beneficiary of the above employer’s employee benefits (including medical) plan, I respectfully request copies of the below listed plan documents.
Please address any questions or follow up regarding this document request to my attorney: (Name, address, phone, fax and email of attorney.) Enclosed is an Authorization, which I have signed, directing you to provide the below requested plan documents to me in care of my above referenced attorney.
ERISA (Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq), at
29 U.S.C. §1024(b)(4), provides that “the administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract or other instruments under which the plan is established or operated.” Failure to provide the requested documents within thirty days is subject to a $110.00 per day penalty for each day of noncompliance. 29 U.S.C. §1132(c)(1)(B); 29 C.F.R. § 2575.502c-1; See Final Rule Relating to Adjustment of Civil Monetary Penalties, 68 Fed.Reg. 2875-76 (Jan. 22, 2003).
I respectfully request that the above employer’s ERISA plan, including the above employer’s Medical Plan, provide to me, in care of my above referenced attorney, the below described documents issued effective for each plan year from January 1, ____ (insert plan year in which accident/incident occurred) to present:
1. The Summary Plan Descriptions (SPDs) for the plan’s various employee benefit plans, including but not limited to the medical, short and long terms disability plans and their subrogation and/or lien provisions.
2. The “Written Instrument” (sometimes referred to as “Plan Document”, “Master Plan”, or “General Plan”) under which this ERISA employee benefit plan is established, including but not limited to the medical, short and long term disability plans subrogation and/or lien provisions. If the “Written Instrument” includes “Wrap” provisions, which incorporate by reference other plan documents, including but not limited to the medical, short and long terms disability plans subrogation and/or lien provisions, then please be sure to provide both the “Wrap” document and the applicable documents which are “wrapped” or incorporated by reference into the “Written Instrument”. (Cigna Corp. v. Amara, No. 09-804, 563 U.S. _____ (5-16-2011) holds that the “Written Instrument” or “Plan Document” is the binding contract between the employer and its employees/insureds).
3. Amendments to the “Written Instrument” or “Plan Document”, including but not limited to the medical plan subrogation and/or lien provisions.
4. The Summary of Material Modifications (SMM) statements, including but not limited to the medical plan subrogation and/or lien provisions. (The SMM statements inform participants and beneficiaries of changes to the plan or to the information required to be in the SPD).
5. Copies of all of the above employer’s ERISA plan contracts including, but not limited to: Insurance contracts including but not limited to medical, short and long term disability; medical Stop Loss Contracts (including disclosure of at what point the medical Stop Loss Insurance started or would have started paying my medical benefits individual and aggregate); Health Insurance Contracts; Insurance Intermediary Services Contracts; and Administrative Services Contracts related to the above employer’s Medical Plan serving the state or region of myself as plan participant or beneficiary.
6. The Form 5500(s), including all attached schedules and attachments, filed with the U.S. Department of Labor.
7. If my health or disability benefits are provided by a multiple employer or union plan or trust: Please provide the determination by the U.S. Secretary of Labor that the above employer’s Medical Plan is established or maintained pursuant to a collective bargaining agreement. Also, please provide the Plan’s complete last filed Form M-1 with each and every attachment filed along with the Form M-1.
Again, please provide the above requested plan documents to me in care of my above-referenced attorney. It is preferred if you can email the requested plan documents to my above referenced attorney.
Thank you for your courtesy and assistance.
Very truly yours,
(Plan Participant or Beneficiary)