Synergy Blog

Add the Administrative Services Agreement to your ERISA Document Request

By Dave Place, J.D. – Director of Lien Resolution

An Administrative Services Agreement between a Plan Administrator and a Claims Administrator may fall within the purview of a document request under ERISA 29 U.S.C. § 1024(b)(4), with non-compliance subject to the penalty assessment authorized under ERISA 29 U.S.C. § 1132(c).   As Synergy has long advocated, one of the keys to properly defending against an asserted subrogation or reimbursement claim from an ERISA plan is making requests to the plan administrator.  ERISA places certain responsibilities upon the Plan Administrator to assist with the proper management of ERISA qualified employee welfare-benefit plans and to promote communication with the plan beneficiaries.

One of the major responsibilities of the plan administrator, in so far as dealing with providing information to beneficiaries, is contained in 29 U.S.C. 1024(b)(4).  This section of the statute deals with requests for information made upon the plan administrator:

29 U.S.C. 1024(b)(4)– The administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated.


In Grant v. Eaton, S.D.Miss, Civil Action No. 3:10CV164TSL-FKB, decided 2/6/13, there was an allegation that the Administrative Services Agreement between the third party claims administrator and the plan administrator contained a provision that purports to grant discretion as well as authority from the plan administrator to the claims administrator.  Due to this allegation of the transfer of certain rights from the Plan to the Claims Administrator, the court found that the Administrative Services Agreement was not excluded from the 29 U.S.C. 1024(b)(4) requests and the failure to provide the contract would subject the plan to penalties under 29 U.S.C. § 1132(c)(1)(B).


The court further reasoned that the Administrative Services Agreement contained information on “who are the persons to whom the management … of his plan … have been entrusted.” Hughes Salaried Retirees Action Comm., 72 F.3d 686, 690 (9th Cir. 1995). As a result, the Court found that the Administrative Services Agreement was subject to the ERISA disclosure requirements as it is a document “that restrict[s] or govern[s] a plan’s operation.” Shaver v. Operating Eng’rs Local 428 Pension Trust Fund, 332 F.3d 1198, 1202 (9th Cir. 2003).


The Southern District of Mississippi relied upon the rationale of other courts who had evaluated whether or not a 29 U.S.C. 1024(b)(4) request included Administrative Services Agreements.  In Michael v. American International Group, Inc., No. 4:05CV02400 ERW, 2008 WL 4279582 (E.D. Mo. 2008), the court wrote at length on the issue, stating, in pertinent part,


“The proper inquiry for the Court to determine whether the contract at issue should have been disclosed is to consider whether the administrative services agreement “allow[s] ‘the individual participant [to] know … exactly where he stands with respect to the plan-what benefits he may be entitled to, what circumstances may preclude him from obtaining benefits, what procedures he must follow to obtain benefits, and who are the persons to whom the management and investment of his plan funds have been entrusted.”


(See also, Hughes Salaried Retirees Action Comm. v. Administrator of the Hughes Non-Bargaining Retirement Plan, 72 F.3d 686, 690 (9th Cir. 1995)).


The court also looked to the Eleventh Circuit and noted that the Eleventh Circuit has found that the Administrative Services Agreement may be subject to disclosure under ERISA not just as “other instruments under which the plan is established or operated” but as a “contract” pursuant to 29 U.S.C. § 1024(b)(4). Heffner v. Blue Cross and Blue Shield of Alabama, Inc., 443 F.3d 1330, 1343 (11th Cir. 2006). The Eleventh Circuit succinctly stated that “[a] contract between a group and an insurer such as Blue Cross is specifically listed as an ERISA document which may control a plan’s operation.”


The court also recognized Fisher v. Metropolitan Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) which noted that the Plan, by its own terms, contemplated delegation of the Plan Administrator’s responsibilities to a third party administrator “arguably incorporat[ed] the Administrative Services Agreement … as a further delineation of how the Plan would in fact operate”. Which meant disclosure of the Administrative Services Agreement was required under a 29 U.S.C. 1024(b)(4) request.


Though there is case law which stands for the opposite conclusion reached by the Southern District of Mississippi, the distinction seems to be one of degree.  If the Administrative Services Agreement transfers any authority or discretion, or there are allegations that it does, from the Plan Administrator to another party then under the rationale expressed by the courts above that agreement needs to be provided in response to the beneficiary’s 29 U.S.C. 1024(b)(4) request.  Similar to the requirement created by Cigna v. Amara, 131 S.Ct. 1866 which necessitates a comparison between the Summary Plan Description and the Master Plan Document, there is need to review the Administrative Services Agreement to determine if a transfer of authority or discretion has taken place.  Under the cases cited, above failure of the Plan Administrator to provide the Administrative Services Agreement so that this review can be conducted could subject the plan to penalties under 29U.S.C. § 1132(c)(1)(b) & 29 CFR § 2575.502c-1.


Forcing a Plan Administrator to fully comply with its obligations under 29 U.S.C. 1024(b)(4) is one of the few ways to exert pressure on a self-funded ERISA plan who is attempting to enforce purported recovery rights.  Understanding that neither the Plan Administrator, nor the Claims Administrator, wants to provide their Administrative Services Agreement can be used as a negotiation tool by the wise plaintiff’s attorney to reduce repayment. Get the documents your client is owed, or demand a discount from the Plan or recovery vendor.


Synergy can help with reduction or possibly elimination of ERISA liens.  Contact us today to see how we can help you.

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Adelman & Adelman, P.A.

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Formerly of Babbitt, Johnson, Osborne & Le Clainche

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