Court: SPD can be Benefit Plan Document

March 16, 2007 ( - A federal appellate court has ruled that the provisions of a benefit plan summary plan description (SPD) are legally controlling if the SPD was the only formal written benefits document an employer had.

The 8 th  U.S. Circuit Court of Appeals issued the decision in a case involving a Wal-Mart employee who challenged a move by the giant retailer’s health plan to recoup the $175,000 in benefits her husband had received from a car accident that had left him permanently disabled.

The plan relied on an SPD provision giving it the right to be paid back out of a legal judgment or settlement an employee or beneficiary might receive.Nancy Gamboa refused the repayment demand and the plan sued.


Gamboa’s key legal argument was that the SPD’s reimbursement provision was unenforceable because it was not part of the formal plan document. A federal judge in the U.S. District Court for the Western District of Arkansas agreed and ruled for Gamboa.

On appeal, Senior Circuit Judge David R. Hansen, writing for the 8 th  Circuit panel, threw out the lower court holding and said that not only was the SPD the only health plan document, but it informed participants that portions of it served as part of Wal-Mart’s official benefit plan document.

Where no other source of benefits information exists, the SPD can serve as the formal plan document regardless of its label, Hansen declared.

The 8 th  Circuit ruling is  here .