The 5th Circuit in a statutory penalty case Murphy v. Verizon Communications, determined that for purposes of disclosure of “other instruments under which the plan is established or operated”, the statute was not intended to include documents that are not formal legal documents binding upon plan. Formal documents include only those that that establish or govern the plan. This opinion joins the 1st, 2nd, 4th, 7th, and 8th Circuits and rejects the views of the 6th and 9th Circuits on this issue.
The impact of this decision is that individuals residing within the 5th Circuit, which includes Texas, Louisiana, and Mississippi, will have a more difficult time obtaining guidelines or protocols that are actually used by the plan to adjudicate claims or operate the plan. Such information is vital to understanding how a claim was decided, since form letters are often employed with claim denials. The refusal of a plan administrator to produce those documents will not be grounds for a statutory penalty claim to be asserted, however. The decision in essence takes a lot of the teeth out of the ERISA statute for those in the 5th Circuit since at a minimum ERISA intended to require full disclosure to plan participants. Congress indicated that the ERISA statute was intended to protect beneficiaries. The 5th Circuit here has provided a narrow reading of the broad term “other instruments under which the plan has operated” and the decision actually erodes that protection. When there is a threat of a statutory penalty, it actually compels plan administrators to be forth coming with documents that are produced to plan participants and of course assist those participants in obtaining the benefits sought. Clearly plan administrators will not be inclined to be as forthcoming in the affected states. Nonetheless, this will be the law of the land unless the 5th Circuit determines to reverse itself or unless the Supreme Court weighs in on this issue given the Circuit splits.