Supreme Court Rules Summary Plan Descriptions Are Not "Terms" Under ERISA

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On May 16, the U.S. Supreme Court issued its long-awaited opinion in the case of Cigna Corp. v. Amara. This decision will have a substantial impact on plan sponsors, both with respect to how a sponsor is to design its plan and disclose terms in its summary plan description, as well as what relief may be available for plan participants and beneficiaries for plan violations.

The Supreme Court determined that summary plan descriptions (SPDs), although important, are not plan "terms" under the Employee Retirement Income Security Act (ERISA). Citing a concern over whether SPDs could become overly complex, the Court decided that SPDs "provide communication with beneficiaries about the plan, but that their statements do not themselves constitute the terms of the plan for purposes of Section 502(a)(1)(B) [of ERISA]."

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