Businesses and plan administrators overseeing employee benefits in Washington, D.C., have legal responsibilities to uphold to the workers enrolled in a health, retirement or disability plan. Under the Employee Retirement Income Security Act of 1974, plan administrators must respond to participants' and beneficiaries' requests for certain documents, including basic plan descriptions and summaries of coverage. They have 30 days to respond without penalty, but they could be fined up to $110 each day afterwards.
One federal court case illustrates that these fines are not simply an attempt at deterrence that are rarely assessed in reality. In this case, an employer set up a group health insurance plan for its employees but later failed to pay the premiums. As a result, the coverage was cancelled due to the employer's failure to pay, but several plan participants were left with unpaid medical claims. In an attempt to deal with the claims, these participants requested certain plan documents from the administrator in accordance with ERISA. However, the administrator never replied to their requests for the documents, and the participants sued over a wrongful denial of benefits. They later added a claim specifically for the ERISA violations in the case.
Four months after the plaintiffs added an ERISA claim to their lawsuit, they received the requested documents. As a result, the documents came to them 748 days after the expiration of the 30-day limit. The court ruled in favor of the plaintiffs and awarded them $55 for each day that the documents were late, for a total of $41,140.
Employees depend on their benefits for their health coverage, retirement plans, and security in case of a disability. When an employer or plan administrator refuses to manage the plan properly or turn over key documents, an ERISA benefits claims attorney may be able to help employees seek accountability.