On August 20, 2019, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit issued an opinion in Dorman v. Charles Schwab Corp.,1 overturning its 1984 position in Amaro v. Continental Can Co.2 that lawsuits filed under the Employee Retirement Income Security Act (ERISA) are not arbitrable. The court found that subsequent U.S. Supreme Court decisions mean that Amaro “is no longer good law.”
Articles Discussing ERISA.
Third Circuit Joins Majority in Rejecting “De Facto Administrator” ERISA Theory
The U.S. Court of Appeals for the Third Circuit joins the Second, Seventh, Eighth, Ninth, and Tenth Circuits in declining to impose liability on alleged de facto plan administrators. Under Section 502(c) of ERISA, a plan administrator may be liable and subject to penalties for failing to comply with a participant’s request for information which the administrator must provide within 30-days from the request. The Third Circuit addressed whether a participant could sue a “de facto plan administrator” for failing to provide information timely.
Full and Fair Review Requirement under ERISA Gets a Full and Fair Review
On July 15, 2019, the U.S. Court of Appeals for the Tenth Circuit touched on the new regulations governing what constitutes a “full and fair review” of a claim for benefits under the Employee Retirement Income Security Act.1 The important question at the root of the case was whether one can lose discretionary authority in administering a claim by engaging in “procedural irregularities.” To be sure, the new regulations answer that question in the affirmative.2 Unfortunately, however, the Tenth Circuit was not called upon to determine whether the regulations are binding and enforceable. The court did, however, determine that what the plaintiff claimed were procedural irregularities decidedly were not.
EASTERN DISTRICT OF NEW YORK REFUSES TO ENFORCE AN ERISA ANTI-ASSIGNMENT PROVISION
The list of the federal courts of appeals enforcing unambiguous anti-assignment provisions in ERISA health benefit plans continues to grow: almost exactly one year ago, the Third Circuit joined its sister circuits in holding “that anti-assignment clauses in ERISA-governed health insurance plans as a general matter are enforceable.” As the Third Circuit opinion noted, every circuit court to address the issue – seven to date (the First, Second, Third, Fifth, Ninth, Tenth, and Eleventh) – has reached this same conclusion of law.
Insurance Agents Properly Classified as Independent Contractors, Circuit Court Rules
The Sixth Circuit ruled that agents were properly classified as independent contractors in an Employee Retirement Income Security Act (ERISA) class action brought on behalf of thousands of current and former insurance agents in Jammal v. American Family Insurance Co., No. 17-4125 (6th Cir. Jan. 29, 2019).
Fifth Circuit Opines on when Claims may be Properly Maintained under ERISA § 502(a)(1)(B) Versus § 502(a)(3)
The U.S. Court of Appeals for the Fifth Circuit recently addressed “the labyrinthine complexities of ERISA law and practice.” Manuel v. Turner Industries Group, LLC, et al., No. 17-30835 (5th Cir. Oct. 1, 2018). In this wide-ranging opinion, the Fifth Circuit highlighted the importance of identifying the underlying purported injury to understand whether an ERISA § 502(a)(3) claim (a claim for equitable relief) is duplicative of a claim that could have been brought under ERISA § 502(a)(1)(B) (a claim to recover benefits or enforce a right under the terms of a plan), in which case it should be dismissed.
Are You “Doing Enough” to Avoid ERISA Statutory Penalties?
Clients often are surprised to learn they are liable for ERISA statutory penalties associated with participant document requests even though they have retained an independent third party to administer their ERISA welfare benefits plans (such as disability, life, and health plans). It is fairly well established in most of the federal circuits that only the plan administrator, as defined by ERISA, can be penalized for failure to respond to document requests.
A Uniform Standard of Review in ERISA Benefit Denial Cases: The Fifth Circuit Overrules Itself to Fall in Line with Other Courts
With its en banc decision in Ariana v. Humana Health Plan of Texas,1 the Fifth Circuit reconsidered the standard of review in an ERISA denial of benefits case.
Changes to ERISA’s Disability Claims Regulations Coming April 1
New handling regulations for ERISA disability claims will go into effect on April 1, 2018, the Department of Labor (DOL) has announced. The agency confirmed that the regulations are final, without changes.
Court Rules that Company Discretionary Offer of Voluntary Separation Agreements Does Not Create an ERISA-Covered Severance Plan
It always has been difficult to give a consistent answer as to whether informal severance arrangements have created an ERISA-covered severance plan. In Mance v. Quest Diagnostics Inc., 2017 WL 684711 (DC NJ 2017), the U.S. District Court held that Quest’s decision to provide some departing employees with severance benefits under a voluntary separation agreement (“VSA”) process was provided on such a discretionary basis that it did not establish a plan under ERISA.
Supreme Court Confirms Retirement Plans of Church-Affiliated Organizations Can be Exempt from ERISA
In a much-anticipated ruling, the U.S. Supreme Court ruled on June 5 that retirement plans maintained by church-affiliated organizations can be exempt from the Employee Retirement Income Security Act (ERISA), regardless of which organization establishing the plan. While the ruling may provide some temporary relief to church-affiliated organizations, it also reveals what is likely to be the next wave of challenges in this area of the law.
Supreme Court Decision Offers Some Relief to Church-Affiliated Nonprofits Using ERISA Church Plan Exemption
Executive Summary: The U.S. Supreme Court’s decision in Advocate Health Care Network v. Stapleton serves as a reminder to church-affiliated hospitals and other organizations using the ERISA church plan exemption to review the basis for their plans’ exemptions and their plan governance structures.
Supreme Court Rules Pension Plans of Religiously Affiliated Organizations Exempt from ERISA By René E. Thorne an
ERISA’s “church plan” exemption applies to pension plans maintained by church-affiliated organizations such as healthcare facilities, even if the plans were not established by a church, the U.S. Supreme Court has ruled unanimously, 8-0. Advocate Health Care Network et al. v. Stapleton et al., Nos. 16-74; 16-86; 16-258 (June 5, 2017). (Justice Neil Gorsuch did not participate in the decision because the case was argued before he joined the Court.)
UNANIMOUS SUPREME COURT DECISION IN FAVOR OF “CHURCH PLAN” DEFENDANTS
Today, the Supreme Court handed a long-awaited victory to religiously affiliated organizations operating pension plans under ERISA’s “church plan” exemption.
SUPREME COURT HEARS “CHURCH PLAN” ERISA CLASS ACTION CASES
On Monday, the Supreme Court heard oral argument in the consolidated “church plan” cases, Advocate Health Care Network v. Stapleton, St. Peter’s Healthcare System v. Kaplan, and Dignity Health v. Rollins.