The Supreme Court Speaks on the Remedies for Benefits Description Mistakes

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In vacating and remanding a district court and U.S. Court of Appeals decision in favor of a plaintiff class of beneficiaries of the CIGNA Pension Plan, the Supreme Court of the United States reached three conclusions that have significant repercussions for benefit plan sponsors and benefit plan litigation.

In vacating and remanding a district court and U.S. Court of Appeals decision in favor of a plaintiff class of beneficiaries of the CIGNA Pension Plan, see Amara v. Cigna, Corp., 559 F. Supp. 2d 192, (D. Conn. 2008), aff’d 348 Fed. Appx. 627 (2d Cir. 2009), the Supreme Court of the United States reached three conclusions that have significant repercussions for benefit plan sponsors and benefit plan litigation. First, the Supreme Court held that plan summaries do not constitute plan terms, and as such, an Employee Retirement Income Security Act (ERISA) § 502(a)(1)(B) claim for benefits cannot be the basis for a court to rewrite plan terms and order relief based upon the summary plan description. Second, the Supreme Court held that ERISA § 502(a)(3) may provide a remedy for mistakes in a summary plan description (SPD), but only when plaintiffs can show actual harm by a preponderance of the evidence. Third, the Supreme Court rejected a bright-line requirement that plaintiffs must show detrimental reliance in order to recover for mistakes made in SPDs.

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