In part two of our judicial development 2008/2009 series, we will be focusing on the Gertjejansen v. Kemper Ins. Co. court case. A ruling by the 9th U.S. Circuit Court of Appeals emphasizes the importance of complying with the U.S. Department of Labor’s regulations on delivering plan documents electronically.
Gertjejansen v. Kemper Insurance Companies, Inc.
Background:
In Gertjejansen v. Kemper Insurance Companies, Inc., Linda Gertjejansen had applied for permanent disability benefits through her health insurance plan. She was denied her benefits by Kemper Insurance because “she did not cooperate with the Plan Administrator’s request for a scheduled appointment for case management”. This requirement was stipulated in the disability plan Summary Plan Description (SPD). The employer had posted the SPD on the company’s intranet site with no follow up to verify delivery or access.
Under ERISA, plans sponsors must deliver SPDs to participants within a certain time frame. The Department of Labor (DOL) permits electronic delivery of required disclosure documents, however, it requires measures intended to ensure actual receipt. Simply posting an SPD on the company’s intranet site is adequate. For many employers, providing “hard copy” SPDs to every participant is still the standard method to ensure receipt.
Result:
The 9th U.S. Circuit Court of Appeals determined that delivering the SPD over the intranet did not meet the DOL’s requirements for electronic delivery. For this reason, the court reviewed the denial using the de novo (evaluated whether the plan administrator correctly or incorrectly denied benefits) standard of review but ruled against Gertjejansen anyway because she failed to cooperate with the plan administrator’s request to schedule an appointment with case management.
Impact:
Plan sponsors should confirm that required documents are properly distributed and received by participants in accordance with DOL approved delivery methods.
For more information, please read: http://www.watsonwyatt.com/us/pubs/insider/showarticle.asp?ArticleID=19916 (source)
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