In a decision issued a couple of years ago, the United States Supreme Court held that a summary plan description that differed from the plan document could not be enforced as the plan document. The Court said that the summary plan description was supposed to describe the plan and it was the plan that should be enforced. If there was a difference between the summary plan description and the plan document, participants may be able to claim that the discrepancy constituted a breach of fiduciary duty by the plan administrator who wrote an incorrect summary plan description. The summary plan description itself could not be directly enforced.
While separate plan documents and summary plan descriptions are common with retirement plans, such as 401(k) plans, they are less common in welfare plans. Particularly with self-funded medical plans, the summary plan description and the plan document are often combined into a single document. Employers are concerned that differences in wording between the summary plan description and the plan document could lead to unintended coverage of medical costs and so wish to provide only a single document that describes the plan’s benefits.
Some commentators have suggested that this practice is not acceptable in light of the Supreme Court decision. However, in a recent Sixth Circuit decision, the court allowed the practice. The court distinguished the Supreme Court decision by saying that in that case there had been both a plan document and a summary plan description. Where both documents exist, only the plan document should be enforced. Where a single document operates as both the plan document and the summary plan description, that is the document that should be enforced. Thus, while the Supreme Court has not upheld the practice, there is still legal support for employers to combine plan documents and SPDs into a single document.