Court Finds Employer Failed in Helping Employee Obtain Plan Documents

U.S. District Judge Barbara B. Crabb of the U.S. District Court for the Western District of Wisconsin charged American Family Mutual Insurance Company $30 a day for the 309-day delay (a total of $9,270) in the production of resource tools used by CIGNA to deny benefits covering speech therapy for Sharon Mondry’s son. In addition, Mondry was found to be entitled to $603.25 for the lost time value of the money she paid out of her own pocket for her son’s speech therapy before she was finally reimbursed.  

According to the court opinion, a benefits specialist at American Family had attempted to obtain a copy of the resource tools used to initially deny and then deny on appeal Mondry’s claim, but was told the tool was proprietary and could not be sent to her, so she turned it over to American Family’s legal counsel. Crabb found that although its legal counsel made a separate call to CIGNA, she made no further effort after her first one was rebuffed.   

Crabb said it is not clear whether legal counsel explained to CIGNA exactly why defendant believed that the documents should be turned over, that is, because CIGNA had relied upon them in denying plaintiff’s claim. In any event, defendant’s counsel did not take any additional steps to get copies of the resource tools from CIGNA. American Family offered no evidence that legal counsel asked to speak to a higher level employee, that she wrote any follow up letter to CIGNA, or that she consulted the general service agreement to determine whether defendant had any contractual rights to require CIGNA to turn over the tools.   

Mondry asked for an award of $110 a day for each day that CIGNA did not respond to each of plaintiff’s 12 written requests for plan documents, for a total amount of $1,053,690, but Crabb ruled that such a request was not appropriate in this case. Crabb admitted that Mondry was treated shabbily by CIGNA, but said CIGNA is not liable for its withholding of the resource tools and general service agreement because it has no obligation under the Employee Retirement Income Security Act (ERISA) to provide documents relating to the operation of a benefits plan.  Mondry had initially only contacted CIGNA to request the documents, and she did not make clear in her inital correspondence with American Family’s benefits specialist what exact documents she wanted.

Crabb said only American Family can be held liable under ERISA for delays in providing plan documents, although its actions came “nowhere near the degree of recalcitrance or negligence that CIGNA displayed.”  

The case is Mondry v. American Family Mutual Insurance Co., W.D. Wis., No. 06-cv-320-bbc.