Benefits Denials ERISA Section 1133 Requirements

Section 1133 of ERISA (29 U.S.C. § 1133) requires that a notice of a denial of benefits sent to a plan participant or that participant's beneficiary provide adequate notice of the denial containing the specific reasons for the denial that are written in a manner calculated to be understood by the recipient of the notice.

Section 1133 also requires that the employee benefit plan provide such plan participant or beneficiary a reasonable opportunity for a full and fair review of the decision to deny the claim by the appropriately named fiduciary.

It is recommended that the benefit denial should provide notice of the plan participant's opportunity to appeal the denial, submit additional information, and what type of information is needed for the appeal.


Court Finds that Plan's Denial of Benefits Was Arbitrary and Capricious

If a plan provision regarding benefits is unambiguous, a court will review the plan administrator's decision regarding benefits as a matter of law.  In Brown v. Workforce Stabilization Plan, No. 06-4133 (10th Cir. July 3, 2007), the court held that the plan administrator's denial of benefits was arbitrary and capricious because it conflicted with the unambiguous plan provisions regarding benefits.

The plan administrator had determined that certain union employees were not eligible for benefits guaranteed under an employee benefit plan governing employees who are laid off as the result of a company merger.  The plan administrator's articulated rationale for denying the benefits was that the list of benefits available to those employees under their collective bargaining agreement did not specifically include the plan at issue.  The court found that the plan administrator's decision conflicted with the plain language of the collective bargaining agreement in that the list of available benefits was not exhaustive and had language including the benefit plan at issue.