If you represent a client who is a participant or beneficiary of a health and welfare plan administered under the Employee Retirement Income Security Act of 1974 (ERISA), you should first issue an ERISA request for plan documents, or the 29 USC 1024(b)(4) Document Request to the Plan Administrator.
By correctly issuing a 29 USC 1024(b)(4) request for documents, you will ensure you have all the information needed to negotiate and resolve the ERISA lien on your client’s personal injury settlement. In particular, you will learn the two most essential factors in negotiating the ERISA lien: the terms of the plan document and the plan’s funding status. Further, if the administrator fails to respond to the request for documents in time, they may be subject to penalties, which provides leverage in a lien negotiation.
Purpose of ERISA 104(b)(4), 29 USC 1024(b)(4)
Under ERISA, all benefit plans must operate according to a written instrument. ERISA 402(a)(1), 29 USC 1102(a)(1). People commonly refer to this written instrument as the Plan Document. It sets forth all the rights and responsibilities of plan participants. In addition to the plan document, benefit plans must keep other records for plan administration.
An essential function of ERISA 104, 29 USC 1024, is to ensure that plan administrators disclose this information to regulators, plan participants, and other stakeholders. Pertinent here, plan administrators must provide certain documents to new plan participants, to all plan participants every year, and upon written request from a plan participant.
Key ERISA Documents to Request
Under 29 USC 1024(b)(4), an ERISA plan administrator must disclose the following documents upon written request from the participant:
- the latest updated summary plan description (SPD),
- the latest annual report,
- any terminal report,
- bargaining agreement,
- trust agreement, contract, or other instruments under which the plan is established or operated.
ERISA 104(b)(4), 29 USC 1024(b)(4)
The summary plan description (SPD), as its name implies, is a summary of the plan document. Under ERISA, the SPD must “…be written in a manner calculated to be understood by the average plan participant…” 29 USC § 1022(a).
The plan files the latest annual report, the IRS Form 5500, each year to set forth its financial status. Analysis of this document is essential to determine the funding status of the plan, which will determine the extent of ERISA preemption.
The bargaining agreement and trust agreement generally refer to Taft-Hartley Trust Funds, ERISA benefit plans established pursuant to an agreement between a union and an employer association.
In your request, you must leverage the clause “or other instruments under which the plan is established or operated” and request a copy of the Master Plan Document.
Summary Plan Description vs. Master Plan Document
In your letter, explicitly request a copy of the Master Plan Document (MPD). State that the MPD falls within the “other instruments under which the plan is established or operated. ” ERISA 104(b)(4), 29 USC 1024(b)(4). Under 502(a)(3), the ERISA plan can enforce the terms of the “plan,” not the Summary Plan Description.
The Summary Plan Description is just that, a summary of the plan document required to “…be written in a manner calculated to be understood by the average plan participant…” 29 USC § 1022(a). The Plan Document, or Master Plan Document (MPD), is the legally operative document.
The plan may contend that the Summary Plan Description (SPD) contains the plan terms. But, the Supreme Court has stated: “… that the summary documents, [], provide communication with beneficiaries about the plan, but [] their statements do not themselves constitute the terms of the plan…” Cigna v. Amara, 131 S. Ct. 1866, 1878 (2011). The MPD is the legally binding document that contains the plan terms, so you must obtain a copy.
Direct the Document Request to the Plan Administrator
It is imperative to direct the document request to the Plan Administrator. 29 USC 1024(b)(4) explicitly puts the burden of producing these documents on the plan administrator.
The SPD will provide the name and contact information of the plan administrator. If the SPD does not name this person, then for purposes of 29 USC 1024, the plan sponsor, usually the employer, acts as the plan administrator.
Most ERISA plans will outsource functions to outside vendors, like third-party administrators, law firms, or subrogation collection agents. None of these agents count as the plan administrator.
If you issue the document request to these outside vendors, they have no duty to respond or provide the documents. And if they send the documents, they have no obligation to provide the correct documents.
Further, issuing the request to these other parties does not trigger any penalties for non-compliance, negating your leverage in a negotiation.
ERISA Penalty for Failure to Provide Plan Documents
If the Plan Administrator does not provide the requested documents within 30 days, a court may impose penalties of up to $110 per day for non-compliance. ERISA 502(c)(1)(B), 29 USC 1132(c)(1)(B) & 29 CFR § 2575. 502c-1.
These penalties are not automatic and are subject to the discretion of a federal judge. In determining whether to award penalties, the judge will look at several factors, including harm and bad faith.
Essential Tips for Issuing a 29 USC 1024(b)(4) Document Request
- Ensure you send the 29 USC 1024(b)(4) Document Request directly to the Plan Administrator.
- Explicitly request a copy of the Master Plan Document (MPD), explaining that this document is one of the “other instruments under which the plan is established or operated.”
- Have your client sign the letter. The statute gives the right to request the documents to “any participant or beneficiary, ” not the participant or beneficiary’s lawyer.
- Send the document request via certified mail or private carrier. Doing so ensures that you have proof that the Plan Administrator received the request.
- Consider requesting the documents in electronic format to avoid additional fees. These documents may be several hundred pages long, and the statute allows the ERISA plan to assess a fee for paper copies. ERISA 104(b)(4), 29 USC 1024(b)(4).
29 USC 1024(b)(3) Request Model Language
[Plan Administrator Name]
Administrator, [ERISA Plan Name]
[Address]
RE: Participant Name, Date of Injury, Participant Info (e. g. , DOB, SS#, ID#)
Dear Plan Administrator:
Pursuant to my right as a plan participant under 29 USC § 1024(b)(4), I respectfully request copies of the following materials:
– The Summary Plan Descriptions (SPD) and amendments from the year preceding the date of injury until the present;
– The Master Plan Documents (MPD) and amendments from the year preceding the date of injury until the present;
– The Form 5500 Annual Report for the plan, including all attached schedules, from the year preceding the date of loss until present;
– the latest annual report, any terminal report, bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.
Please be advised that you are required to produce the Master Plan Document (MPD) as an “instrument[] under which the plan is established or operated. ” 29 USC § 1024(b)(4).
As noted above, a plan participant is making this request pursuant to 29 USC § 1024(b)(4). Please note that failure to provide these materials within thirty days may result in a fine of $110.00 per day. 29 USC § 1132(c)(1)(b) & 29 CFR § 2575. 502c1.
Please forward these materials to [Address]
Sincerely,
[Plan Participant]