Wednesday, July 2nd, 2008...8:14 am
9th Cir: ERISA Administrator Must Provide Investigative Notes to Participant
A 9th Circuit panel has held that an ERISA administrator must provide a participant with notes of its claims investigators, if the participant so requests:
[Plan participant] Sgro also claims that he asked defendants for a “complete copy of [his] claim file” and that defendants didn’t fully comply with the request. In particular, Sgro alleges that MetLife held back “claim activity records or investigation notes” kept by MetLife’s “claims personnel.” Sgro argues that MetLife’s failure to provide these documents violated ERISA regulations, which require that a claimant shall be provided, upon request and freeof charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits. 29 C.F.R. § 2560.503-1(h)(2)(iii).
The documents that MetLife is alleged to have held back are “relevant,” and thus covered by this regulation, because they were “generated in the course of making the benefit determination.” Id. § 2560.503-1(m)(8)(ii). ERISA’s remedies provision gives Sgro a cause of action to sue a plan “administrator” who doesn’t comply with a “request for . . . information.” 29 U.S.C. § 1132(c)(1).
Sgro v. Danone Waters, 2008 _______ (9th Cir. July 2, 2008)
2 Comments
July 4th, 2008 at 6:41 am
This was also an interesting case in that Sgro tried to prove the plan was not an ERISA plan.
Just because the employer pays part of the premium, and defeats the safe harbor of the DOL, does not mean than an ERISA plan still exists.
It means only that the safe harbor was not satisfied.
As you may know, the employer paying part or all of the premiums, does not, in and of itself, establish an ERISA plan.
Don Levit
July 7th, 2008 at 12:05 pm
Mr. Levit,
Your analysis sounds right to me (though I’m far from an ERISA expert). Sgro was trying to avoid ERISA pre-emption of his state law claims by showing that the Plan fit within the ERISA “safe harbor.” I think you’re right that showing that a Plan fits within the Section 2510.3-1(j) safe harbor isn’t the only way to avoid ERISA pre-emption.
Here’s the Court’s language on the safe harbor issue:
Sgro claims that Danone Waters’s disability benefits plan isn’t governed by ERISA because it falls within the “safe harbor” created by 29 C.F.R. § 2510.3-1(j). For Sgro to prevail on this point, he would have to prove that the plan meets four separate requirements of the regulation, including
that the employer make “[n]o contributions” to the plan. Id. § 2510.3-1(j)(1). [Footnote omitted.] Sgro does allege that Danone Waters pays none of the plan’s supplemental “buy-up” benefits, which employees may purchase to augment the “core” benefits. But, even if true, this wouldn’t bring the plan within the safe harbor. So long as Danone Waters pays for some benefits, ERISA applies to the whole plan, even if employees pay entirely for other benefits. See Glass v. United of Omaha Life Ins. Co., 33 F.3d 1341, 1345 (11th Cir. 1994); see also Crull v. GEM Ins. Co., 58 F.3d 1386, 1390 (9th Cir. 1995) (“[A]n employer’s payment of a portion of the insurance premium [is] a significant factor for determining the existence of an ERISA plan.”).
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