ERISA Preempts State Law Requiring That Insurer Reimburse Claimant for Copying Costs

A participant in an ERISA plan sued his employer (as plan administrator) and MetLife seeking unpaid disability benefits, reimbursement of copying costs and statutory penalties for failure to respond to a document request. The claim for copying costs was based on California state law, which requires that an insurer reimburse claimants for costs associated with duplicating medical records. While ERISA preempts most state laws, some laws that “regulate insurance” are saved from preemption. Here, the Ninth Circuit ruled that, although the regulation requiring reimbursement by insurers is undoubtedly aimed at insurance companies, it does not “significantly affect the risk-pooling arrangement between the insurer and insured,” and therefore cannot be said to regulate insurance. Accordingly, the state law was preempted by ERISA. Sgro also claimed that MetLife’s requirement that he provide copies of medical documents to support his claim (and, specifically, the costs associated with obtaining such documents) imposed a fee or cost as a condition to making a claim, in violation of ERISA. However, the court determined that, under the ERISA framework, copy expenses do not qualify as a “condition” to making a claim, noting that if a participant possessed the necessary documents or convinced his doctors to make the copies for free, than he would not have to pay anything for his medical records. Since these options exist, copying costs are not a disallowed “condition” to making a claim. Finally, with regard to MetLife’s alleged failure to provide documents, the Ninth Circuit dismissed the claim for statutory penalties. In part, the court declared that 29 U.S.C. section 1132(c)(1) only provides a remedy against the plan administrator. Here, the employer was the plan administrator, not MetLife. Therefore, even if MetLife did not provide the requested records, it could not be liable under 29 U.S.C. section 1132(c)(1).