The Games Long Term Disability Insurers Play – Game #5: No Flag on the Play

Ask any team who just lost a close football game, and they will likely tell you that but for the penalties that should have been called on the other team, they would have won. The video review of plays has slowly crept into football, first professional and then college. But, there is a limit to what can be reviewed, and there are only certain calls that can result in a penalty being imposed when one wasn’t called on the field. ERISA is no different.

The 11th Circuit recently ruled that plan administrators will not suffer a penalty for refusing to provide plan documents to a claimant’s assignee. Forget the principle that an assignee should “stand in the shoes” of the claimant, or that ERISA requires the administrator to require a summary plan description to a plan participant or beneficiary. In this new case, an assignment by a plan participant to a doctor does not give the doctor standing to request a plan document or seek penalties when it isn’t provided.

Facts of the Case

  • In Griffin v. Aetna Health Inc., 2018 WL 4043465, (11th Cir. 2018), patients of a dermatologist assigned their rights to the dermatologist under an ERISA-governed health plan.
  • The dermatologist then sought payment for benefits, which were not paid in full. Believing that she “stood in the shoes” of each participant who made an assignment to her, she requested the plan document from the plan administrator and health insurer.
  • They refused to provide the dermatologist the plan documents. The dermatologist sued. The district court dismissed the claim finding that she was not assigned the right to sue for ERISA statutory penalties. She did not appeal that decision.
  • So, the dermatologist obtained a second assignment that retroactively assigned ALL participant rights including the right to sue for statutory penalties.
  • She then filed another suit. The statutory penalties had by then racked up to several million dollars. It was also dismissed. This appeal followed.

Though the focus of the arguments on appeal was the validity of a retroactive assignment, the 11th Circuit concluded “that framing of the issue misses the forest for the trees” and further that:

“The critical question is whether Coventry violated the statute by denying Dr. Griffin’s request for the summary plan description. The answer is no….In sum, because Coventry did not fail to provide a copy of the summary plan description in response to a request by a person who was entitled to a copy at the time of the request, Coventry did not violate the statute. Coventry is not liable for statutory penalties for violations it did not commit.”

In other words – no flag on the play!

Though Coventry would be subject to penalty for refusing to provide a plan participant with the plan documents requested, it was not subject to penalty for refusing the participant’s assignee.

It will be interesting to see whether this game will be played by the plan administrators and insurers in other situations. What if an attorney makes a request on behalf of a plan participant? What about a claimant with a subrogation right? Or, what if the requestor has a power of attorney from the plan participant? Is that enough? Does it depend on the language of the assignment? Or, perhaps the claim for penalties should have been made in the name of the assignors, though they weren’t the real parties in interest? Unfortunately, the facts of this opinion are thin.

While the court did not mention it, the claim procedure regulation permits representation of participants during the claim process. The plan administrator cannot preclude an authorized representative of a claimant from acting on behalf of a claimant in pursuing a benefit claim or appeal of an adverse benefit determination. 29 CFR §2560.503-1(b)(4). Obtaining documents, including plan documents, guidelines and protocols, is a part of that process.

Remember federal law controls in these contexts, and it takes experienced ERISA attorneys that know how to play the game to win it.

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