Old Document Governs for Dependent Who Missed Enrollment Deadline

EBIA reports that on several occasions before she retired, an IBM employee asked her employer’s health plan to tell her what she had to do to add her disabled dependent adult son to her retiree coverage under the plan. Initially she was told that she only had to list her son as a
“contact” in the plan’s records, which she did before she retired, the news report said.

However, shortly after the employee retired the plan refused to enroll her son because she had not filed a written application with the plan on behalf of her son at least 60 days before her son’s 23rd birthday, a deadline that had passed more than two years before the employee retired. The employee filed written requests for plan documents, including the version of the SPD that had
been in effect on the application deadline, but the plan furnished only the SPD (the SPD was also the plan document) that was in effect when it refused to enroll her son, according to EBIA.

The SPD that was in effect when it refused to enroll her son imposed the written application requirement, but the version in effect on the application deadline did not. After her administrative appeals were rejected, the employee sued the plan and the plan administrator, seeking health benefits for her son and statutory penalties for failure to furnish the requested plan documents.

The plan argued that the only relevant SPD was the one in effect at the time the son’s enrollment was denied, but the court determined that if the son’s enrollment was denied because the
employee failed to meet an application deadline, the relevant version of the SPD was the one in effect on that deadline. The court ruled the plan acted arbitrarily and capriciously in refusing the son’s enrollment.

The court ordered that the son be enrolled in the plan immediately and held the defendants liable for statutory penalties for failure to furnish the earlier version of the SPD.