Eleventh Circuit Addresses Statutory Penalty Claims Under ERISA

The ERISA statute authorizes a court to award a penalty of up to $110 per day based on the failure of an Administrator to respond to a participant's or a beneficiary's request for plan documents. The term "Administrator" is defined under ERISA as "the person specifically so designated" under the plan or the plan sponsor if no one is named. 29 U.S.C. § 1002(16)(A). Claimants often argue that a plan insurer can be liable for penalties as the "de facto plan administrator" because it administers claims under the plan. This interpretation of the statute has been rejected by nearly every circuit, including most recently the First Circuit in Tetreault v. Reliance Standard Life Ins. Co., 769 F. 3d 49 (1st Cir. 2014).

In Allena Burge Smiley v. Hartford Life and Accident Insurance Company, et al., No. 15-10056 (11th Cir. 2015), the Eleventh Circuit took a step closer to joining ten other circuits that have refused to recognize ERISA penalty claims against de facto plan administrators. Dr. Smiley, a dentist, brought an ERISA penalty claim against Hartford in connection with her claim for disability benefits. Hartford was the third-party administrator only...