ERISA requires covered benefit plans to provide plan members with a “summary plan description” (SPD) that explains the terms of the benefit plan in a way that the “average plan participant” can understand. In CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), the U.S. Supreme Court reversed numerous lower courts by holding that terms in an SPD cannot trump conflicting terms in the underlying ERISA plan document. Before Amara, many lower courts held that statements in SPDs are binding and trump conflicting provisions in the underlying plan itself. Given that the plan and SPD at issue in Amaraactually conflicted, Amara did not resolve whether terms in an SPD ever can constitute the terms of the plan. The U.S. Court of Appeals for the Sixth Circuit—which sits over Ohio’s federal courts—just detailed its approach to resolving this ambiguity by holding that SPDs may still constitute binding plan terms in certain circumstances.
In Bd. of Trs. v. Moore, No. 14-4048, 2015 U.S. App. LEXIS 14945 (6th Cir. Aug. 25, 2015), the Sixth Circuit concluded that, due to a subrogation provision in a plan’s SPD, a plan participant must reimburse his health insurance plan for medical benefits it paid on his behalf following his settlement of a negligence action for injuries he suffered in a car accident.
The central issue in the case was whether the subrogation provision in the plan’s SPD was binding. The Sixth Circuit rejected the participant’s argument that the subrogation provision was not controlling because it was included only in the SPD, which ordinarily would not be the operative plan document. Two documents were related to the plan: the trust agreement and the SPD. The participant argued that the trust agreement was the operative plan document, and because it did not contain a subrogation provision, the subrogation provision in the SPD was not binding. The Sixth Circuit, however, found that the trust agreement did not contain the customary provisions of an ERISA health plan (such as a description of the available benefits and how to obtain them). Instead, it merely authorized the trustees to establish a written plan providing the “detailed basis on which” benefits would be paid. The Sixth Circuit acknowledged Amara’s holding, but nonetheless concluded that nothing in Amara prevents a document from functioning as both the plan document and the SPD. Here, the court observed, there were no conflicting documents; there was only one document. No separate plan document existed. The SPD was, therefore, “two documents in one”—the SPD and the plan. Accordingly, the court concluded that the subrogation provision in the SPD was enforceable.
The Sixth Circuit’s decision is consistent with recent decisions from other federal circuit courts of appeals. These decisions addressed situations in which there was no plan document, other than the SPD, containing the customary hallmarks of an ERISA plan. Therefore, they leave unresolved the issue of whether terms in an SPD are binding when there is, in fact, a separate plan document that does not include those terms. Amara makes clear that an SPD cannot control when it conflicts with the plan document. But what if the SPD contains a term addressing an issue not addressed in the main plan document? It is not clear from Moore how the Sixth Circuit would resolve that issue. Consequently, plan administrators should continue to review their plan documents and SPDs for consistency and, as a fail-safe, ensure that their plan documents contain a term expressly incorporating their SPDs.