Claim Remanded To Claims Administrator Initially Terminated Before Providing Participant With Requested Plan Documents

An employee submitted a claim for benefits through his employer’s ERISA governed disability plan. After approving the payment of both short-term and long-term disability benefits, MetLife requested that the participant apply for Social Security benefits. Through her attorney, the participant requested that MetLife provide all information relating to plaintiff’s claim, including a copy of the Plan, policy, summary plan description and copies of all internal notes concerning MetLife’s consideration of plaintiff’s claim. Travelers Insurance, the plaintiff’s employers and plan administrator, took the position that the plan documents were not to be disclosed absent a subpoena and directed MetLife to not comply. Upon instructions by Travelers, MetLife subsequently terminated benefits for failure to apply for Social Security benefits and for failure to provide proof of continuing disability. While criticizing the conduct of all parties during the claim review process, the District Court stated that it was an abuse of discretion for MetLife to terminate benefits prior to providing the participant with a copy of the plan documents, especially when plaintiff’s non-compliance was based in part on ignorance of the plan’s terms. Moreover, Travelers policy of disclosing the plan documents only after receipt of a subpoena was contrary to the Congressional intent behind the passage of ERISA, namely to provide plan beneficiaries with a framework to enforce their rights outside the court system. While remanding consideration of the claim to MetLife for review, the Court also awarded of statutory penalties against the plan administrator. Travelers argued that statutory penalties could not be imposed against the plan administrator because the request for documents was submitted to the claims administrator, MetLife. The court acknowledged that under ERISA, only the plan administrator can be liable for statutory penalties. However, the court also pointed out that Travelers directed MetLife not to comply with the participant’s request, and, therefore, since Travelers had actual notice of the request, statutory penalties were appropriate.