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Plan Penalized $41,140 for Failing to Furnish Documents


ERISA requires that, in response to a request from a participant or beneficiary, a plan must furnish certain documents within 30 days. These documents include a copy of the latest updated summary plan description, the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or any other instrument under which the plan is established or operated. Recently, a federal district court in North Carolina hit an employer with a $41,140 civil penalty for failing to do so.

In this case, after a welfare plan failed to pay certain medical claims, participants requested specific documents such as the plan, summary plan description, and contracts with medical providers. The administrator of the plan did not respond to the request. Eventually the participants sued for payment of the unpaid claims, and the administrator finally provided the requested documents during discovery, 748 days after the deadline to furnish.

Under ERISA, plan administrators can face a penalty of up to $110 per day for failing to furnish the required documents. In this case, the court penalized the plan administrator $55 per day, noting that the failure was particularly egregious because it resulted in the participants having no information about how to appeal the denial of their medical claims.

This case serves as a reminder of the stiff penalties plans can face if they fail to furnish documents when required. Because of the strict deadline, administrators should pay close attention to any requests for documents and act on them quickly.


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