Very recently, in Durham v. Prudential Insurance Co. of America, 2012 WL 3893604 (S.D.N.Y. Aug. 28, 2012), the court rejected an argument by the insurer of an ERISA-regulated disability plan that, based upon a provision in the summary plan description (SPD) for the plan, it was entitled to exercise discretionary authority in determining benefits under the plan, and was therefore entitled to deferential review of its claim denial by the court. The court found that the SPD was not part of the plan and could not be the source of the insurer’s claimed discretionary authority, relying upon the Supreme Court’s 2011 decision in CIGNA Corp. v. Amara,131 S. Ct. 1866 (2011) where the Court held that a summary plan description (SPD) for an employee benefit plan is not an official plan document unless it is expressly incorporated or otherwise specifically made a part of a plan.
While the Durham court agreed that the SPD clearly conferred discretion in the consideration of claims, it found that under Amara “statutorily required plan summaries (or summaries of plan modifications)—like the SPD—may not be enforced as if they are the terms of the plan itself.” The court stated that while the SPD was contained in the same bound booklet as the Group Insurance Certificate that governed benefits, “an insurer is not entitled to deferential review merely because it claims the SPD is integrated into the Plan. Rather, the insurer must demonstrate that the SPD is part of the Plan, for example, by the SPD clearly stating on its face that it is part of the Plan.” For this proposition, the court cited a Tenth Circuit case, Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131 (10th Cir.2011), where the SPD was expressly made part of the plan. The Durham court distinguished Eugene S., noting that the SPD in the case before the court expressly provided that it was not part of the Group Insurance Certificate, and therefore it could not be part of the plan.
Durham highlights the importance of a careful review of all plan-related documents, and for plan sponsors and insurers to make deliberate decisions as to whether to incorporate the terms of SPDs into plans.