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No Penalty for Delay in Providing Documents Requested by Lawyer During Litigation



Hewko v. Coffman Engineers, Inc., 2021 WL 3832241 (D. Alaska 2021)

A participant in a self-insured ERISA health plan, in connection with a lawsuit over a benefits denial, asked the court to award him penalties for the plan administrator’s failure to furnish documents in response to a written request. (As background, a court may impose a penalty of up to $110 per day on an ERISA plan administrator that fails to furnish information within 30 days after a participant’s or beneficiary’s written request.) The participant’s claim for penalties was based on an email from his lawyer to the plan administrator’s lawyer. The requested documents were eventually made part of the administrative record for litigation purposes—but not within 30 days of the email.

For several reasons, the court declined to award penalties. First, the email from the participant’s lawyer could not form the basis for a claim for penalties because the legal complaint that included the penalty claim was filed before that email was sent. And even if the email had predated the complaint, the relevant ERISA provision did not apply to requests made between attorneys during litigation (see our Checkpoint article). The court drew a distinction between this type of litigation-related request and a document request sent by a participant’s attorney to a plan administrator (which may trigger failure-to-furnish penalties). Moreover, the court said that even if the email were “somehow actionable under ERISA,” it would exercise its discretion and not impose penalties in this situation because the delay in providing the documents could be partially attributed to the COVID-19 pandemic, and did not delay the legal proceedings or harm the participant’s ability to bring an ERISA claim. The participant offered several earlier communications as an alternative basis for penalties, but the court found no justification for awarding penalties based on these requests.

EBIA Comment: Benefit-related lawsuits often include requests for penalties for failure to furnish documents. To avoid the potential accumulation of penalties, plan administrators should respond promptly to written requests for documents that are covered by these disclosure rules. Keep in mind that these penalties are imposed on the ERISA plan administrator—for a single employer plan, this is typically the employer/plan sponsor. For more information, see EBIA’s ERISA Compliance manual at Sections XXV.A (“Participant and Beneficiary Right to Request and Examine Documents”) and XXV.B (“Consequence of Failing to Furnish Documents: Up to $110 Per Day Penalties”). See also EBIA’s Self-Insured Health Plans manual at Section XXVIII.E (“Participant-Requested Disclosures”). You may also be interested in our upcoming webinar “Claims and Appeals Rules for Group Health and Disability Plans: Translating Rules into Best Practices(live on 10/7/2021).

Contributing Editors: EBIA Staff.

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