ERISA directs the Secretary of Labor to establish and maintain rules which ensure that plan fiduciaries and insurance providers fully and fairly review claims for ERISA-governed benefits. The DOL’s rules regulating claims procedures are set forth at 29 C.F.R. § 2560.503-1, which contains detailed direction as to the claims handling process for both group health plans and disability plans. Historically, 29 C.F.R. § 2560.503-1 imposed similar obligations on group health plans and disability plans.

ERISA's implementing regulations require that the claims procedures of a plan will "provide that a claimant shall be provided, upon request . . . copies of, all documents, records, and other information relevant to the claimant's claim for benefits." 29 CFR 2560.503-1(h)(2)(iii).The regulations further state at 29 CFR 2560.503-1(m)(8) that a document, record, or other information is "relevant" if it "(i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administrative processes and safeguards required pursuant to [ERISA's regulations] . . ."In its Information Letter, the DOL cited subsection (ii), opining that the recording must be produced because it was "generated in the course of making the benefit determination," even though it may not have been relied upon for the ultimate decision. Regarding the plan administrator's "quality assurance" argument, the DOL noted that subsection (iii) addresses materials relating to compliance with ERISA's regulations and safeguards.

On June 14, 2021, the Department of Labor (DOL) issued “Information Letter 06-14-2021,” providing guidance to plan fiduciaries on their duty to disclose and produce recordings or transcripts of phone calls between benefit claimants and plan representatives regarding their benefit claims.ERISA’s claim regulations, 29 C.F.R. § 2560.503-1, require fiduciaries, on request, to provide claimants with “copies of all documents, records, and other information relevant to the claimant’s claim for benefits.” 29 C.F.R. § 2560.503-1(h)(2)(iii).

These regulations require that a claimant be provided with copies of all documents, records and other information “relevant” to the claim for benefits. The DOL was not persuaded by the claims administrator’s arguments that the phone recordings were not relevant, and it cited to two parts of 29 CFR 2560.503-1(m)(8) in its assertion that audio recordings are indeed relevant records that should be provided to claimants.First, in response to the plan administrator’s argument that the recordings were “not relied upon for claim administration purposes,” the DOL cites 29 CFR 2560.503-1(m)(8)(ii). This section notes that a record is considered relevant if it “was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination.”

You already know that ERISA regulations set specific timelines for the issuance of ERISA-governed long term disability decisions. See, e.g., 29 C.F.R. 2560.503-1(i)(1)(i) (45 days for disability claims and 60 days for others). In special circumstances, the administrator can extend the time by which benefit decisions are made.An administrator’s failure to issue benefit decisions can have consequences: in those situations a claimant shall be deemed to have exhausted administrative remedies (and can sue), and the benefit denial may be reviewed under the de novo standard even if the administrator had discretionary authority.But what happens when the administrator issues the benefit denial just “a little late?”

The district court agreed and granted summary judgment in favor of the defendants.Third Circuit Rationale The Third Circuit vacated and remanded based on its holding that failure to note the deadline to file suit in the denial letter constituted a substantial violation of 29 CFR 2560.503-1(g). The Court observed that 29 CFR 2560.503-1(g)(1)(iv) requires a denial letter to set forth a description of the plan’s review procedures and any applicable time limits, “including a statement of the claimant’s right to bring civil action” under ERISA.

Under the ERISA regulations, a person whose claim is denied is entitled to receive free of charge “copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.” 29 C.F.R. § 2560.503-1(h)(2)(iii). Therefore, while a plan insurer has no duty to respond to a request for plan documents, it is required to provide claim documents as outlined in the regulation.

Given Aetna's conflict of interest, it smacks of bad faith to invoke pre-authorization if that requirement is unknown to both doctors and patients in the HMO."The claim is thus remanded. The panel also noted that, with respect to the plan's exhaustion defense, the p[articipant might not have been required to exhaust internal procedures in this case:"[U]nder 29 C.F.R. § 2560.503-1(b), an ERISA benefit plan must 'establish and maintain reasonable procedures governing the filing of benefit claims, notification of benefit determinations, and appeal of adverse benefit determinations . . . .' Procedures cannot be considered reasonable unless they 'do not contain any provision, and are not administered in a way, that unduly inhibits or hampers the initiation or processing of claims for benefits.' 29 C.F.R. § 2560.503-1(b)(3).

In response to public criticism and Congressional intervention, the DOL announced it will re-propose the regulation originally published one year ago, citing the need for further public comment and economic analysis. We also present the insights of several of Proskauer's ERISA practice attorneys regarding the following hot topics: high deductible health plan/health savings account re-design and planning for open enrollment; the constitutionality of the individual mandate under the Affordable Care Act, an issue now ripe for Supreme Court review; the Supreme Court's Decision in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011); and reconciling obligations relating to the production of documents under ERISA § 104(b)(4) versus the claims regulation, 29 C.F.R. § 2560.503-1. As always, be sure to review the section on Rulings, Filings, and Settlements of Interest.

The plaintiff did not file an administrative appeal, and instead commenced a lawsuit against Liberty in August 2020.Liberty moved to dismiss the plaintiff’s complaint for, among other things, failing to exhaust administrative remedies. In opposition to Liberty’s motion, the Plaintiff challenged that Liberty failed to comply with the ERISA claims procedures regulation, 29 C.F.R. § 2560.503–1, because its September 11, 2018 letter was “an adverse benefit determination,” id. § 2560.503–1(m)(4)(i), and did not contain “a statement of the claimant’s right to bring a civil action.” Id. § 2560.503–1(g)(1).