When an ERISA plan provides the plan administrator with discretion to interpret the terms of the plan, the administrator’s claims and appeals decisions are generally reviewed by courts under a lenient standard of review such as “abuse of discretion.” In such cases, courts generally will not upset the plan administrator’s decision absent a clear error.
Articles Discussing ERISA.
Nexsen Pruet tax and employee benefits attorney Sue Odom says retirement plan fees and expenses have been the “hot topic” for the past several years. We’ve seen increased regulation through disclosure requirements and increased litigation.
In her new video, Sue looks at litigation lessons that have come to light as a result of an increase in ERISA-related lawsuits over the past few years.
Many employers would agree that reporting is a core function of employee benefit plan administration. On top of the numerous reporting requirements for group health plans imposed by the Internal Revenue Service and other federal agencies, states laws, including Vermont’s, add a layer of state reporting obligations for plans, including self-funded group health plans.
ERISA provisions are like fruity rum drinks. A little inattention and they can sneak up on you with most unpleasant consequences.
In Montanile v. National Elevator Industry Health Benefit Plan (January 20, 2016), the U.S. Supreme Court dealt a blow to ERISA plans that seek to recover health benefits paid to participants who sustain injuries caused by third parties.
The U.S. Supreme Court has narrowed, ever so slightly, the ever-changing definition of “appropriate equitable relief” under ERISA Section 502(a)(3). In Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan , the high court addressed the issue of whether a plan fiduciary can recover medical payments made on behalf of a participant when the plan fiduciary has not identified the precise funds in the participant’s possession at the time of the claim.
In a previous ASAP article, we discussed the Ninth Circuit’s June 6, 2014 decision in Gabriel v. Alaska Elec. Pension Fund, 755 F.3d 647 (9th Cir. 2014). In the initial opinion issued by the court, the panel split 2-1 in affirming a district court’s ruling that the appellant was not entitled to ongoing retirement benefits, even though the relevant pension fund had provided those benefits for three years prior to the parties becoming involved in litigation. The court initially held that the remedy sought by the appellant—called equitable surcharge—was unavailable to him under ERISA. See 11 U.S.C. § 1132(a)(3); ERISA § 502(a)(3). Pursuing that relief, the initial opinion stated, was contrary to the limited equitable relief regime set forth in the remedial provisions in the statute. In a strenuous partial dissent, Judge Marsha Berzon wrote that the panel had misconstrued the Supreme Court’s decision in CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), misread the Ninth Circuit’s earlier cases, and in fact had triggered a circuit split on the issue of equitable surcharge.
In an opinion with mixed implications for both insurers and health care providers, the U.S. Court of Appeals for the Ninth Circuit recently ruled that when plan beneficiaries assign their claims for payment of benefits to their health care provider, the provider has standing to sue the health plan under ERISA. Importantly, however, the court also held in Spinedex Physical Therapy v. United Healthcare of Arizona, Inc. No. 12-17604, 2014 U.S. App. LEXIS 21132 (9th Cir. Nov. 5, 2014) that anti-assignment provisions in health plans are enforceable. Additionally, the court held that, as written, the assignments only encompassed claims for benefits, not for breach of fiduciary duty.
In Anderson v. DHL Retirement Pension Plan,1 the Ninth Circuit followed the First Circuit in finding that the elimination of the right to transfer an account balance from a defined contribution plan to a defined benefit plan does not violate the Employee Retirement Income Security Act of 1974’s (ERISA) “anti-cutback” rule. However, the Ninth Circuit reached its conclusion on a different basis than did the First Circuit.
On July 23, 2014, the Senate Committee on Health, Education, Labor and Pensions unanimously approved S. 2511, a measure that aims to clarify the definition of “substantial cessation of operations” under Section 4062(e) of ERISA. According to a statement issued by the committee, “this legislation will bring clarity to the pension downsizing liability rules and will ensure that there is a workable mechanism to protect pension benefits when employers show symptoms of financial distress.”
In 2011, the U.S. Supreme Court recognized, for the first time, that some forms of equitable relief could lead to an award of a monetary payment for breach of fiduciary duty under section 502(a)(3) of ERISA, 29 U.S.C. section 1132(a)(3).1 Although the Supreme Court did not define the elements of each form of relief in detail, it listed three types of equitable relief: surcharge, estoppel and reformation.2 Since then, courts have struggled with the showing necessary to obtain them.
Life, Health, Disability, and ERISA provides a summary of decisions from across the country concerning life, health, and disability policies, including those governed by ERISA. Following your review of Life, Health, Disability, and ERISA kindly feel free to contact attorneys and co-editors with any comments you may have, or with any topics you would like to see in upcoming newsletters.
On January 10, 2014, the U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s determination that an employer properly denied a former employee’s request for benefits because he violated the noncompete portion of his Employee Retirement Income Security Act (ERISA) plan.
The U.S. Supreme Court in Heimeshoff v. Hartford Life & Accident Insurance Co. et al. resolved a split among the circuits when it held that a contractual limitations clause in an ERISA-governed long-term disability benefits plan is enforceable even where it causes the limitations period on a claim for benefits to commence before the participant’s cause of action accrues. In this case, the plan-based limitations period in which to file a disability claim lawsuit under ERISA Section 502(a)(1)(B) started to run when “proof of loss” was due under the plan, even though the participant’s cause of action did not accrue, and a lawsuit could not be filed, until the plan’s internal claim review process had been exhausted. Citing ERISA’s important policy of enforcing plan terms as written, the Court held that the clause was enforceable.