
The U.S. District Court for the District of Montana recently awarded over $32,000 in penalties against an employer’s self-insured health plan and its third-party administrator (TPA) for failing to provide information to a plan participant upon request. Employees should be aware of their benefits-related rights and understand how to obtain the information they need.
What Are ERISA Requirements?
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for employee benefit plans maintained by private-sector employers, requiring employers to automatically provide employees with certain benefits-related documents, such as a summary plan description (SPD).
ERISA also requires employers to provide certain documents upon written request by a participant or a beneficiary. These documents include the latest SPD, Form 5500, bargaining agreement, trust agreement, and any contract or other instrument under which the plan is established or operated.
What Happened in Court?
In this most recent case, a plan participant and his daughter sued their self-insured health plan and its TPA after the plan denied coverage for the daughter’s mental health treatments. In part, the plaintiffs alleged that the plan violated the federal Mental Health Parity and Addiction Equity Act (MHPAEA) by applying a more restrictive limitation on mental health treatment than on treatment for medical and surgical issues. The plaintiffs requested a copy of documents related to the plan’s compliance with MHPAEA, including information regarding the plan’s application of nonquantitative treatment limitations.
The court concluded that the requested MHPAEA-related documents fell under ERISA’s disclosure requirement, which means that the defendant’s failure to respond triggered penalties. The court awarded penalties of $110 per day for 294 days, from 30 days after the plaintiffs’ written request through the date the lawsuit was filed, totaling $32,340.
What Does This Mean?
ERISA is meant to help employee benefits plan participants understand how their plan works and their eligibility for benefits. As such, employees are entitled to certain benefit-related documents, and upon request, they must be provided in a timely manner.
Talk to your manager or HR representative if you have any questions or concerns about employee benefits.
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