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Judge Vanessa L. Bryant of the United States District Court for the District of Connecticut issued her Memorandum of Decision in which she held civil penalties may be awarded against ERISA plan administrators who fail to substantially comply with the claims procedures set forth in the federal regulations promulgated under ERISA statutes. See Halo v. Yale Health Plan (D. Conn. Civil Action No. 3:10-cv-1949). Plaintiff Halo had alleged that the Defendant Yale Health Plan had violated the provisions of 29 C.F.R. § 2560.503-1 which governs the timing of notification of benefit determinations. Many courts have held that civil penalties provided under ERISA (29 U.S.C. § 1132(c)) apply only to violations of a duty imposed by the ERISA statute and not those imposed by the regulations promulgated thereunder. Interestingly enough, although Judge Bryant found that there may be instances where a plan administrator’s failure to adhere to claims procedures set forth in 29 C.F.R. § 2560.503-1 renders those plan administrators liable for civil penalties under § 1132(c), she did not find civil penalties to be appropriate in the Halo case because the plan administrator had substantially complied with the claims procedures and “comported itself in a good faith and non-dilatory manner.”

In the event that this is the beginning of a trend by the courts to look to impose civil penalties for violations of the regulations, it will be more important than ever for plan administrators to familiarize themselves with those regulations and adhere to the claims procedures set forth in them.

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