Publications

February 15, 2010

Author: Tod D. Yeslow

Being that the delegation of the discretionary function of claims processing is a fiduciary act, plan fiduciaries are responsible to routinely monitor their third party claims administrator’s processes and performances and make the affirmative determination that the delegated duties are performed in accordance with the controlling law under ERISA and its written administrative policies.

A recent lower-court case in California raises an interesting question: Is it appropriate for the delegating fiduciary to require a representation from the claims administrator that its processors’ compensation or performance evaluations are not conditioned upon a purely quantitative measure of the processed claims (i.e. the number of claims dismissed) but upon a qualitative measure (i.e. the number of claims processed under the controlling requirements of Title I of ERISA).

Download this Mitchell Williams E-Brief for more detailed information.

For further questions, please contact Tod Yeslow at 479.464.5667 or tyeslow@mwlaw.com.

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