De facto plan administrators

One interesting question in ERISA is the extent to which any particular party who manages or provides services to a plan is required to disclose information to plan participants who contact it concerning the plan, plan benefits or a claim for benefits submitted under the plan. Section 1132(c) of ERISA http://www4.law.cornell.edu/uscode/html/uscode29/usc_sec_29_00001132----000-.htmlimposes certain obligations of disclosure and allows courts to impose penalties on plan administrators who fail to comply with those obligations.

Courts recognize that not every entity that plays a role in the administration or operation of the plan should be deemed a plan administrator subject to the obligations of that part of ERISA. Courts in a number of jurisdictions have applied what could be called the de facto plan administrator rule to this question, finding that, regardless of whether a party is actually declared the plan administrator in the plan documents, if the party is effectively operating the plan and would have been in a position to resolve such a request, that party should be deemed subject to the obligations of disclosure imposed by this statute. In February, the Eleventh Circuit Court of Appeals affirmed without comment a decision by the Middle District of Georgia, Hamall-Desai v. Fortis Benefits Ins. Co., 370 F.Supp.2d 1283 (N.D.Ga. Dec 17, 2004) (NO. CIV.A. 103CV1529BBM), in which the court applied the de facto plan administrator test; the district court issued a detailed ruling addressing both that issue and a range of benefit issues.

Here in the First Circuit, however, the courts have not accepted the de facto plan administrator approach, and the district courts have consistently limited the obligations of this statutory provision to plan administrators only, regularly distinguishing the only First Circuit decision that suggests a different approach. The most recent to do so was the federal district court for Maine, in 2004, in an unpublished decision, Davis v. Verizon New England Inc., http://www.med.uscourts.gov/opinions/cohen/2004/dmc_05052004_2-04cv07_davis_v_verizon.pdf