Background
Mark Justman sued Accenture LLP and Prudential Insurance Company after Prudential denied life insurance benefits for his late wife, Karen Justman, who died of septic shock. The District Court dismissed the claims against Accenture, ruling that Accenture did not control claims administration and that Justman failed to state a claim regarding the failure to provide Summary Plan Descriptions. Justman sought leave to file a Second Amended Complaint, which the District Court denied before the case was dismissed with prejudice.
The court’s reasoning
The court explained that ERISA section five zero two a one B allows a beneficiary to sue a party with an obligation to pay benefits. Since Accenture delegated claims administration to Prudential, Prudential was the proper defendant. The court noted that Summary Plan Descriptions are for communication and do not define the plan terms for liability purposes. Regarding the fiduciary duty claim, the court found Justman failed to allege material misrepresentation or detrimental reliance.
What it means going forward
Employers who delegate claims administration to third-party insurers are generally shielded from direct liability for benefit denial claims under ERISA section five zero two a one B.