In a recent en banc decision, Cyr v. Reliance Standard Life Insurance Company, the Ninth Circuit Court of Appeals overruled its own precedent by holding that an insurer, which was not a plan administrator, may be sued for plan benefits under ERISA § 502(a)(1)(B). Reliance provided long term disability insurance to participants of an employee welfare benefit plan, but was not the plan administrator. Reliance did, however, control plan benefit distribution by deciding who qualified for LTD benefits. Plaintiff Cyr sued Reliance because it declined to pay increased LTD benefits she alleged were owed.
The district court held that even though Reliance was neither the plan itself nor plan administrator, it could be sued under ERISA § 502(a)(1)(B). Eventually, plaintiff was successful in obtaining the disputed benefits, attorney’s fees and costs, and Reliance appealed to the Ninth Circuit. In response to the limited issue of whether Reliance could be sued for benefits, the Ninth Circuit held that ERISA § 502(a)(1)(B) claims need not be limited to claims against benefit plans or their plan administrators. Instead, the court relied on the Supreme Court’s Harris Trust & Savings Bank v. Salomon Smith Barney, Inc. decision, which included discussion about who could be sued for a breach of fiduciary duty under § 502(a)(3). As the Supreme Court found in Harris Trust, while § 502(a) includes the universe of the parties who may sue for relief under ERISA, it does not identify the universe of parties who may be sued. Thus, the court concluded that insurance provid