MBI Energy Servs. v. Hoch, 2019 WL 2814855 (8th Cir. 2019)
Available at: https://ecf.ca8.uscourts.gov/opndir/19/07/181539P.pdf
A federal appellate court has held that a single document can serve as both the formal plan document and the summary plan description (SPD) for an ERISA welfare benefit plan. The plan administrator of a self-insured medical plan provided benefits to a participant for injuries sustained in an accident. After the participant recovered (from a third party) an amount sufficient to cover the medical expenses paid by the plan, the plan administrator sought reimbursement. While there was no written document clearly identified as the plan, there was an administrative services agreement (ASA) that indicated that plan benefits and terms and conditions were set forth in an attached exhibit—the SPD. Along with benefit provisions and ERISA-mandated language, the SPD contained a provision addressing the rights of subrogation, reimbursement, and assignment.
The participant argued that the SPD was distinct from and could not constitute the plan, and therefore the reimbursement provision was unenforceable. The plan administrator argued that, despite its SPD label, the document was, in fact, the plan. The participant’s argument was rooted in the Supreme Court’s reasoning, in its Amara ruling, that statements in the SPD do not themselves constitute the terms of the plan (see our Checkpoint article). But the Eighth Circuit disagreed with his contention that the SPD was unenforceable because it conflicted with the ASA, pointing out that the ASA was silent as to reimbursement and expressly incorporated the terms and conditions of the SPD. The court joined other circuits (see, for example, our Checkpoint article) in distinguishing Amara and concluding that, absent a formal plan document, the SPD could constitute the plan. The court also pointed out that it would be inequitable to allow the participant to receive benefits according to the SPD but not hold him to the responsibilities set forth in that same document. It concluded that, since the SPD was the plan’s written instrument, the participant was bound by its terms and obligated to reimburse the plan.
EBIA Comment: Arguably, a combined plan document/SPD is unacceptable because it is not possible for a document to summarize itself. Nevertheless, many plans, particularly welfare plans, use a combined document and will appreciate the confirmation that this approach is acceptable—so long as the document meets ERISA’s stated criteria for both written instruments and SPDs. For more information, see EBIA’s Self-Insured Health Plans manual at Section IX.C.3 (“Can a Single Document Serve as Both Plan Document and SPD?). See also EBIA’s ERISA Compliance manual at Sections VIII.B (“The Written Plan Document Requirement”) and XXIV.L (“Conflicts Between SPD/SMM and Plan Document or Insurance Contract”).
Contributing Editors: EBIA Staff.