In Cyr v. Reliance Standard Life Insurance Company, 642 F. 3d 1202 (9th Cir. 2011), the Ninth Circuit Court of Appeals (the “Court”) faced the question of whether an insurer could be sued in an action for benefits brought under Section 502(a)(1)(B) of ERISA. Some of the Court’s earlier decisions indicated that only a benefit plan or its plan administrator could be sued under that provision.
In this case, the plaintiff Laura Cyr (“Cyr”) was covered by a long-term disability plan at work (the “Plan”). The Plan was insured by defendant Reliance Standard Life Insurance Company (“Reliance”). In effect, Reliance controlled the decision whether to honor or to deny a claim for benefits under the Plan. However, Reliance was not identified as the plan administrator. Cyr filed a claim for long- term disability benefits under the Plan based on a back condition. Reliance approved the claim, based on Cyr’s salary of $85,000, and paid those benefits thereafter. Cyr later sued her employer for gender discrimination based on unequal pay. Cyr and the employer settled the matter, raising Cyr’s salary to $155,000. Cyr asked Reliance to increase her long-term disability benefits accordingly. When Reliance refused, this suit ensued under ERISA section 502(a)(1)(B) (the ERISA provision allowing a participant to sue for plan benefits). But could Cyr maintain this suit against Reliance, who was not the Plan itself or a plan administrator?
In deciding this question, the Court noted that there are no limits stated anywhere in section 502(a) about who can be sued, however. The Supreme Court has not found any limit as to who can be sued under that section. Thus, the Court concluded that the insurer (or any one responsible for paying plan benefits) can be sued under section 502(a)(1)(B).