Understanding Your Rights in a Long Term Disability Plan and Its Summary

Many employees in Chicago and around Illinois with long term disability insurance coverage through their employers look at their employee benefits booklets on at most two occasions, and sometimes only once or never. They may look at the information first when being enrolled in the benefit plan, and possibly once more when needing to make a claim for benefits. If this describes you, don’t feel bad. Even ERISA attorneys have done this with respect to their own benefits. When an employee is seeking disability benefits, the actual plan document can be complicated and confusing. Therefore, ERISA requires plan administrators to provide a summary of the important terms and features of the plan, written in a manner that the average plan participant can understand, in a document called a Summary Plan Description (referred to as the SPD). The SPD is often a separate writing from your formal Plan document, though there has been an increasing trend to make the SPD and the Plan document one and the same—which is permissible so long as the document satisfies the rules on SPDs.  29 U.S.C. § 1022(a).

Sometimes, there are mistakes in these SPDs. A mistake might be a typo, a benefit that does not appear in the formal Plan document, or perhaps missing information. The Supreme Court has held that the terms of a summary plan description cannot be enforced as substitutes for the terms of the plan itself. The Court concluded that the summary documents, including summary plan descriptions, provide communication with participants and beneficiaries about the plan, but the summary does not contain enforceable terms of the plan for purposes of benefit claims under ERISA § 502(a).  Cigna Corp. v. Amara, 131 S. Ct. 1866, 1878 (2011). However, the Court noted employees could be harmed in other ways if given summaries that are not accurate. Id. at 1881.

In a recent case, the United States Court of Appeals for the Sixth Circuit found that by giving plaintiff an SPD that was misleading as to the benefits it intended to provide, regardless of whether the statements were made intentionally or negligently, the plan fiduciaries breached their fiduciary duties. Stiso v. Int’l Steel Grp., No. 13-3503, 2015 U.S. App. LEXIS 9809, at *11 (6th Cir. June 9, 2015). In Stiso, the court held that the employer breached its fiduciary duty under 29 U.S.C. § 1104(a)(1) to an ERISA long term disability plan participant by issuing a summary plan description that did not accurately reflect the terms of the plan. The SPD indicated the participant would receive a 7% annual cost-of-living increase (also called COLA), but the insurer denied the plan included any such term or that the plan intended to include such a term. In addition, the court found the insurer, Met Life, also breached its fiduciary duty to the participant by using a “self-serving interpretation” of the language in the summary plan description to deny the participant’s claim. Ultimately, the participant recovered appropriate equitable relief under ERISA           § 502(a)(3), including make-whole monetary relief.

If your employer communicated to you that your are entitled to certain benefits to which you have not received or to which you are now seeking—reach out to an experienced disability attorney today to determine if your rights have been violated. Sometimes receiving your benefit approval is only half the battle; the other half is keeping your benefits and ensuring that you continually receive the right amount of benefits that you deserve.