In a June 14, 2021 information letter, the US Department of Labor (DOL) opined that a claimant appealing an adverse benefit determination under a plan covered by the Employee Retirement Income Security Act of 1974, as amended (ERISA), has the right under the statute to request audio recordings of customer service calls made during the claims process.

In the ordinary course, third parties involved in an ERISA benefit claims process – insurance companies and third party administrators – as well as ERISA plan administrators have regarded customer service calls with claimants as an accommodation to facilitate the claims process that cannot replicate or substitute for a careful consideration of both the process for and substance of the claim. Routinely, these calls are recorded for quality assurance and training purposes, but the recordings themselves are neither made a part of the administrative record for the claim nor considered in the claims determination process. As such, in the event of an appeal of an adverse benefit determination, copies of the audio recordings regularly have not been provided to claimants making a request under the ERISA section 503 claims procedure regulation for “reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits”, on the basis that the recordings were in fact not relevant to the claim. Claimants have persisted in requesting the recordings, as part of careful diligence and in the hope that the recorded conversation might support the appeal, even though the customer service representative had neither the background nor the opportunity in a telephone call nor the authority to make a definitive determination on any aspect of the claim

In response to a request from counsel to a disappointed claimant, DOL broadly took the position that claimants were entitled to copies of audio recordings on request during an appeal of an adverse benefit determination. That position was expressed in the form of an ERISA information letter, which DOL issues (rather than an advisory opinion) when it is “call[ing] attention to well established principles and interpretations” applicable beyond any specific set of facts. In taking this position, DOL argued that:

• The recording was “submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination” (emphasis added) and “demonstrates compliance with the administrative processes and safeguards required pursuant to” the section 503 claims procedure regulation, and thus was “relevant” as defined in that regulation; and
• The reference in the regulation to “documents, records, and other information” was not limited to paper or written materials.

ESsentials

In light of the reasonable difference of views in the regulated community, DOL’s issuance of an information letter on this issue seems a dubious use of that mechanism given its subtext, but claimants will no doubt welcome it as retrospective ratification of their position. Moreover, the information letter process is of course ex parte and it is not clear that a court, with the benefit of advocacy from the benefits claim fiduciary as well as the claimant, would agree with DOL. In particular, DOL’s arguments in the information letter on relevancy are by no means indisputable.

DOL’s position may in the short term advance the interests of specific claimants, but it likely will have the opposite effect on the efficacy of the claims process for plan participants generally. It seems predictable that:

• Particularly in light of the ERISA section 502(c) statutory penalty for failure to provide on request documents described in certain provisions of ERISA and continuing arguments by claimants that it applies to violations of the ERISA claims procedure (which appellate courts have generally rejected), plan sponsors and administrators may reconsider with their insurance provider or third party administrator any policy or practice on providing audio recordings (and any other materials within the broad reach of DOL’s position) to claimants on request;
• To the extent audio recordings are made available to disappointed claimants, courts will be asked in the near term to assess the import of statements made by customer service representatives that were not contemporaneously part of the administrative record for the claim and that proved to be inconsistent with the considered review of the claim;
• Over time, benefits claim fiduciaries in turn may reconsider whether to record these calls and, if they do, whether the recordings should be part of the administrative record for the claim; and
• More generally, the customer service facility provided by plan administrators, insurance companies and third party administrators may become less responsive to claimants, perhaps limited only to confirmation of empirical matters (e.g., the receipt of claims forms or status of the claims process) without any further assistance, or replaced by a web-based interaction without access to any human assistance.

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