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Can an SPD contain requirements not found in the plan documents?


Guest Trammer
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Guest Trammer

In the 8th Circuit, if there is a conflict between the SPD and the plan documents, the SPD trumps the plan documents. What is the case where the SPD contains an "active work" requirement, but the plan documents do not? I would assume a summary cannot contain requirements not found in the plan documents, but does anyone know of authority for that proposition?

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TRAMMER:

"active work" or "actively at work" are more typically an insurance company's requirements for coverage to be effective. A plan document need not contain, and most commonly does not contain, these kinds of insurance company provisions.

A plan document, i.e. a "Wrap Document" will typically reference the SPDs, and insurance contracts as providing the details of the plan or plans covered by the Wrap Document, and are named in an Appendix to the document.

In addition, most SPDs should refer back to the plan document with regard to any descrepencies between the SPD and plan document, and that the plan document will govern in such cases.

The document should also reference any insurance contracts with regard to having the authority to govern the operation of the specific plan benefits, unless the plan document has specific authority to govern, i.e eligibility to participate. It would be impracticable to include every provision of an insurance contract or self-insurance document in a plan document.

I have dealt with various ERISA attornies over the years who have taken this position. Unfortunately, I have no other authority to site. However, I would think that some ERISA section would verify this position.

Hope this is some help.

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We ran into a problem just recently with our certificates of insurance which had an "actively at work" clause. We were told by the Ohio dept. of insurance that these clauses violate HIPAA unless the actively at work clause specifically does not apply if the enrollee is absent from work because of a health-status related factor. I would think that a self-funded plan could also not require this without running afoul of HIPAA. Without specific cites I believe that many federal circuit decisions (6th included) have held that SPD language trumps the Plan Document whenever an enrollee relies on any information provided through the SPD as it is their only means of finding out about the plan, absent a request to the plan administrator for a copy of the official plan document. Also, you have a bit a paternalism at work here with courts not expecting an enrollee to understand the more difficult language of a plan document.

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The logic you usually find in decisions where the SPD is held to trump the plan, is that the participant reasonably relied on the SPD, took some action based on that reliance, and then had the rug pulled out from under him because of some plan provision. You don't have this situation here. Basically, you just have an inaccurate SPD.

I remember reading a number of years ago that one of the circuits had ruled explicitly that stricter provisions in an SPD do not trump the plan document. In any event, your plan probably has a formal amendment procedure of some type. Distribution of an incorrect SPD probably does constitute a proper amendment of the plan's terms. Lawsuits are filed every day about amendment that were not properly adopted.

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