In every long-term disability claim, it is important to have the plan document on hand so you know the rules. In fact, if the plan document is not given to you upon a written request, a penalty claim may arise in your favor. That is a fine that can be imposed for this failure, up to $110 per day!
If you are unfamiliar with ERISA, you may believe that the entity deciding a claim is responsible for giving you that document and for providing information on all matters pertaining to your long term disability claim. However, often the plan document (which you are trying to get) may only delegate certain functions such as claims decisions to the insurer or claims administrator (which is likely an insurance company or claim processing company). This delegation may not include the responsibility to provide a plan document. In fact, even if the claims administrator is the insurance company is paying the benefit out of its own pocket, it may not have the obligation to provide the plan document! It may be that only the plan administrator or employer has the duty to provide plan documents to you. Confusing? It is to many people.
Accordingly, if you make a request for plan documents on the insurer or claims administrator and it refuses to pass that request on to the plan administrator, then you may never receive the plan document you need. Even worse there may be no liability for penalties under ERISA for this refusal or failure.
In Brooks v. Ryder System, Inc., 2015 WL 5734704 (S.D. Texas 2015) the Plaintiff made a demand for all documents on the claims administrator, Partner Source. However, Partner Source never forwarded the request to the plan administrator. Plan Administrator, Ryder System, Inc., said it never received such a request. The court thus found there was no liability for penalties under 29 U.S.C. §1132(c)(1).
One would think that Partner Source was acting as the agent of Ryder System, Inc. Nonetheless, in this instance, a bad acting agent did not cause any liability for the principal. Compare Center v. Humana, 2015 WL 5822656.
Circumvent these “games” and be aware of the fact that several entities may be involved in any claim. A request for plan documents should go to everyone – the employer, the insurer, and companies you may be dealing with! At the first hint of trouble obtain a disability lawyer who knows ERISA!