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After Obergefell, Is it “Get Married Or Else”?

After Obergefell, Is it “Get Married Or Else”?

July 1, 2015

Authored by: Chris Rylands and Denise Erwin

Gavel and RingsAs has now been widely reported, the Supreme Court ruled on June 26 (the second anniversary of the Windsor decision) that same-sex couples have a right to marry in any part of the United States. Despite being hailed as a victory for marriage equality, as this New York Times article points out, it may not be such happy news for currently unwed domestic partners. Specifically, there is a concern, as the article points out, that employers who previously extended coverage to domestic partners out of a sense of equity may now decide not to since both opposite-sex and same-sex couples can now marry.

As the article mentions, there was a concern at one time that domestic partnership rules would be used by some employees to cover individuals with whom they

Tibble: Much Ado About Nothing?

OMG HeadlineEveryone seems to be talking about last month’s Supreme Court decision in Tibble v. Edison International, even though its holding wasn’t all that momentous. But I’m not complaining. As an ERISA lawyer, I love when ERISA developments hit mainstream news because, for at least one brief fleeting moment, there is a connection between the ERISA world in which I dwell and the rest of the world.

That said, some question whether Tibble warrants the level of attention it is generating. Some say Tibble merely affirms a well-known principle of ERISA law—that is that an ERISA fiduciary has an ongoing duty to monitor plan investments. Others see Tibble as a reflection of enhanced scrutiny of the duty to monitor plan investments, as well as recognition of a statute of limitations that facilitates enforcement of that

Fiduciary Cannot Use ERISA 502(a)(3) To Seek Equitable Relief for Participant

In Duda v. Standard Insurance Company, a recent case decided by the Federal District Court in the Eastern District of Pennsylvania, we are reminded of the limits on the type of relief an employer may obtain for participants in its insured ERISA plans.  In this case, the employer filed suit against the insurer of its long-term disability plan under Section 502(a)(3) of ERISA, which provides the following:

“A civil action may be brought…(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan.”

A suit brought by a fiduciary under 502(a)(3) is preferable since the de novo standard of review, which is less

How to Avoid the “Kitchen Sink” Appeal and Other Nuances for A Self-Insured Health Plan

For many years, medical plan drafting was viewed as a commodity. Insurance companies, third-party administrators and brokers often prepared summary plan descriptions and plan documents for self-insured medical plans using form documents. With the passage of the Affordable Care Act and other health-care related laws, however, medical claims, appeals and litigation have increased exponentially. In many instances, the terms of the plan documents have been outcome-determinative with respect to these disputes. There never has been a better time for an employer to step back and take a comprehensive review of the terms of the employer’s self-insured medical plan document and summary plan description, not only for compliance reasons but also to put the employer in the best position in the event of any dispute. The following are three drafting tips which might be considered during such a review.

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The Yard-Man Inference is No Longer an Inference

The Yard-Man Inference is No Longer an Inference

February 3, 2015

Authored by: benefitsbclp

SCOTUS

The death knell for the so-called “Yard-Man Inference” has sounded. If you think we’re being a little dramatic – OK, maybe you’re right – we have a tendency to get a little too worked up about employee benefits cases that make it to the Supreme Court. But, in any event, last week the Supreme Court resolved a circuit split and overturned the Yard-Man Inference with its decision in M&G Polymers USA, LLC v. Tackett.

 

The Yard-Man Inference is named for the important retiree benefits decision handed down in 1983 in International Union et. al. v. Yard-Man, Inc., 716 F.2d 1476. In that case, the Sixth Circuit applied a presumption of vesting of retiree medical benefits in the absence of a termination provision in a collective bargaining agreement. You can read more about the

Second Circuit Affirms that Health Plan’s Same-Sex Spouse Exclusion Does not Violate ERISA

On December 23, 2014, the U.S. Court of Appeals for the Second Circuit upheld the District Court’s dismissal of plaintiffs’ claims alleging that the same-sex spouse exclusion in the employer’s self-insured medical plan violated Section 510 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and also dismissed plaintiffs’ breach of fiduciary duty claim under Section 404 of ERISA.

As you may recall, the underlying case, Roe v Empire Blue Cross Blue Shield, decided by the District Court of the Southern District of New York, involved an employee of St. Joseph’s Medical Center who tried to add her same-sex spouse as a covered dependent under the employer’s self-insured health plan administered by Empire Blue Cross Blue Shield. The plan at issue did not define “spouse” but it did expressly exclude same-sex spouses and domestic partners. The District Court granted defendants’ motion to dismiss the ERISA

Fourth Circuit: Plan Administrator Must Obtain “Readily Available Information” in Claims Determination

What is a plan administrator’s obligation under ERISA to seek and obtain information potentially relevant to a participant claim where the participant has not provided it? The Fourth Circuit recently provided guidance on that issue in the case of Harrison v. Wells Fargo Bank, N.A. A copy of that opinion is available here.

Nancy Harrison was an online customer service representative for Wells Fargo Bank. In 2011, she underwent a thyroidectomy to remove a large mass that had extended into her chest and which caused chest pain and tracheal compression. She was unable to work and received short-term disability benefits under the Wells Fargo plan. While she was recovering and waiting for a second, more invasive surgery, her husband died unexpectedly, triggering a recurrence of depression and post-traumatic stress disorder (PTSD) related to the death of her children in a house fire a few years before.

Signature Authority Can Trigger ERISA Fiduciary Responsibility

Signature Authority Can Trigger ERISA Fiduciary Responsibility

September 8, 2014

Authored by: benefitsbclp

When is a signature more than just a signature?

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In Perez v. Geopharma, decided on July 25, 2014, Geopharma’s CEO, Mihir Taneja, brought a motion to dismiss an ERISA breach of fiduciary duty claim under the company’s health and welfare plan brought against him by the DOL. In its suit, the DOL alleged that because Taneja had signature authority on Geopharma’s bank accounts – which included the plan’s participant contributions – he was a plan fiduciary. The claim arose from findings that the company: (1) withheld employee premium contributions over a two-month and ten-month period in 2009 and 2010 respectively; (2) failed to segregate the contributions from company assets as soon reasonably possible; and (3) failed to use the funds to pay claims. The DOL alleged that the company also

Would’ve, Could’ve, Should’ve

Would’ve, Could’ve, Should’ve

August 29, 2014

Authored by: benefitsbclp

Tatum v. RJR Nabisco Investment Committee, decided by the Fourth Circuit on August 4, involved the divestiture of the Nabisco stock funds following spin off of Nabisco.  Some 14 years after Nabisco and RJ Reynolds merged to form RJR Nabisco, the merged company decided to separate the food and tobacco businesses by spinning off the tobacco  business.  Following the spinoff, the RJR 401(k) plan, which was formed after the spinoff, provided for the Nabisco stock funds as frozen funds, which permitted participants to sell, but not purchase, Nabisco stock.

Although the Plan document provided for the Nabisco stock funds, RJR decided to eliminate the funds approximately 6 months following the spinoff.  The decision was made by a “working group” of several corporate employees and not by either of the fiduciary committees appointed to administer the Plan and review its investments.

The Moench Presumption is Dead – Long Live the Dudenhoeffer Presumption

On June 25, 2014, a unanimous United States Supreme Court weighed in on the legal standards applicable in stock drop cases in Fifth Third Bancorp v. Dudenhoeffer.

Facts. Beginning in 2007, Fifth Third Bank began experiencing a large number of mishaps, most of them associated with borrowers not repaying their loans when due. As a result, Fifth Third’s stock price suffered the same phenomenon as that of virtually every other publicly traded financial institution in the world during the great recession: it dropped precipitously, falling 74% from July 2007 to September 2009. With the benefit of hindsight, plaintiffs brought a class action lawsuit against the fiduciaries of the Fifth Third 401(k) Plan, alleging that all of this should have been patently obvious based on public and nonpublic information allegedly possessed by the fiduciaries. The plaintiffs asserted that the fiduciaries should have taken one or more of

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