Service providers beware! A recent ruling in the Ninth Circuit Court of Appeals seems to suggest that anyone who participates in the administration of a benefit plan is a potential defendant under ERISA.
Generally, we look at claims brought by participants under ERISA Section 502 as limiting of who may bring a suit, and ERISA clearly provides that fiduciaries (including plan administrators) are certainly potential defendants in actions brought under that section. However, in the recent case of Cyr v. Reliance Standard Life Insurance (9th Cir. 6/22/11), the Court found that Section 502 does not appear to limit which parties may be defendants in a civil action brought under that provision.
Cyr sued the plan administrator, but also sued Reliance as the actual insurer of the benefits in question. Reliance was not the administrator but did control approval or denial of the insured disability benefits. The court reasoned that, based on the holding in Harris Trust v, Smith Barney, there is really not set restriction in Section 502 about who can be sued, so there is no reason to read in such a limitation. Reliance was a "logical defendant" because it was the ultimate payer and effectively controlled the plan, even though it was not the designated plan administrator.
So where does this leave us? Well, companies that participate in the process of providing plan benefits, though not specifically designated as fiduciaries or administrators, are viable defendants if they have authority to accept or reject claims. The extent of that authority may be subject to debate, but those would be issues raised against any potential defendant. So be wary that just because you are not "named" as a fiduciary, if you exercise decision making power over claims, you could be a defendant in an ERISA litigation.