District Court Focuses on ERISA Plan Document Requests

On January 31, 2024, the US District Court for the Northern District of California (the court) filed a ruling on motions for summary judgement in Zavislak v. Netflix, Inc. , determining, among other issues, that an ERISA health plan beneficiary is not entitled to receive copies of all plan documents under ERISA Section 104.

In this case, Zavislak (the plaintiff), as a covered beneficiary (the spouse of an employee/participant) of the self-funded ERISA health plan sponsored by Netflix, Inc. (the defendant), requested copies of various health plan documents, including the Plan Document (capitalized here to indicate that it is a reference to the Plan Document required by ERISA, as opposed to other documents, generically referred to as plan documents, that could refer to various other documents relating to the plan and its operation), a TPA agreement, and any other documents related to making benefit determinations under the plan. The plaintiff received no response to their January 2021 request and sent another request in February 2022. At that point, the defendant began to provide responsive documents, and the plaintiff asked for more documents, including certain administrative services agreements between the plan’s TPA and claims administrators. The defendant refused to provide the additional documents. The plaintiff eventually filed suit against the defendant and requested the maximum penalties under ERISA Section 502(c)(1) of $110 per day for the failure to provide requested plan documents.

The court noted that the Ninth Circuit Court of Appeals (Ninth Circuit), which includes California, narrowly interprets the disclosure requirements of Section 104. Specifically, the court quoted the Ninth Circuit in that “the documents contemplated by § 104(b)(4) [those that must be disclosed] are those that allow the individual participant [to] know exactly where he stands with respect to the plan—what benefits he may be entitled to, what circumstances may preclude him from obtaining benefits, what procedures he must follow to obtain benefits, and who are the persons to whom the management and investment of his plan funds have been entrusted.” And, although the statute specifically mentions “contracts” as being subject to production, it does not necessarily encompass all contracts between a plan and TPAs that render services to the plan. According to the Ninth Circuit, “[d]ocuments which ‘relate only to the manner in which the plan is operated’” need not be disclosed under the statute.

Thus, the court ruled that the administrative services agreements (contracts) between the plan and its TPAs “relate only to the manner in which the plan is operated” and need not be disclosed under the statute. The court ruled that several other documents requested by the plaintiff were not required to be produced because they were included in documents that were produced by the defendant.

As to the issue of statutory penalties for failure to produce documents requested by a participant or beneficiary, the court declined to award the full $110 per day, as requested by the plaintiff, due to the suspension of deadlines by the DOL because of the COVID-19 pandemic. The court did, however, award penalties in the amount of $15 per day from the date of the first request in January 2021 to the date documents were produced in March 2022 for a total of $6,465.

In addition to the notable ruling that contracts with TPAs are not included in the documents that ERISA requires to be produced at the request of a participant or beneficiary (specifically, those contracts that “relate only to the manner in which the plan is operated”), this case is a reminder that the issue of which documents must be produced to participants and beneficiaries under ERISA may depend on where (which jurisdiction) the plan sponsor is. It also illustrates the need for plan administrators to have procedures in place for receiving and responding to requests for documents within the 30 days that ERISA allows. It would be prudent for a plan sponsor to include consultation with counsel as part of those procedures when a request for documents is received. This case went on for over three years, and the awarded statutory penalties were probably the least expensive part of the process for the defendant.

Zavislak v. Netflix, Inc. »