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ACA Facelift to Disability Claims Process Could Affect All Plans

December 20, 2016

Authors

Chris Rylands and Steven Schaffer

ACA Facelift to Disability Claims Process Could Affect All Plans

December 20, 2016

by: Chris Rylands and Steven Schaffer

claimIt might be tempting to conclude that the recent Department of Labor regulations on disability claims procedures is limited to disability plans.  However, as those familiar with the claims procedures know, it applies to all plans that provide benefits based on a disability determination, which can include vesting or payment under pension, 401(k), and other retirement plans as well. Beyond that, however, the DOL also went a little beyond a discussion of just disability-related claims.

The New Rules

The new rules are effective for claims submitted on or after January 1, 2018. Under the new rules, the disability claims process will look a lot like the group health plan claims process.  In short:

  • Disability claims procedures must be designed
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Exceptional Plan Governance: Beat Back the Coming Litigation Onslaught

June 6, 2016

Authors

benefitsbclp

Exceptional Plan Governance: Beat Back the Coming Litigation Onslaught

June 6, 2016

by: benefitsbclp

Gavel and ScalesIt was bound to happen. For several years, the plaintiffs’ bar has sued fiduciaries of large 401(k) plans asserting breach of their duties under ERISA by failing to exercise requisite prudence in permitting excessive administrative and investment fees.  It may be that the plaintiffs’ bar has come close to exhausting the low-hanging lineup of potential large plan defendants, and, if a recent case is any indication, the small and medium-sized plan fiduciaries are the next target.  See, Damberg v. LaMettry’s Collision Inc., et al. The allegations in this class action case parallel those that have been successful in the large plan fee dispute cases. Now that the lid is off, small and medium sized plan fiduciaries should be forewarned of the need to employ solid plan governance

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Hurry up and Spend the Money?

January 28, 2016

Authors

Jennifer Stokes

Hurry up and Spend the Money?

January 28, 2016

by: Jennifer Stokes

Money Money MoneyIt’s like a simple set of facts on a law school exam with an answer that defies logic. And, yet, Supreme Court precedent has brought us to this illogical conclusion. Facts: Participant agrees to reimburse the plan money it has spent on his medical care. Participant sets aside money to reimburse the plan, but then spends all of the money himself before reimbursing the plan. Question: If the money cannot be traced, can the plan recover the amount it is owed from the participant’s other assets? Answer: Last week, the Supreme Court ruled in Montanile v. Bd. of Trustees of the Nat’l Elevator Indus. Health Benefit Plan that a health plan cannot enforce an equitable lien against a participant’s general assets when the participant has already spent the fund

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Termination of a Nonqualified Retirement Plan with a Traditional Defined Benefit Formula

October 12, 2015

Authors

Richard Arenburg

Termination of a Nonqualified Retirement Plan with a Traditional Defined Benefit Formula

October 12, 2015

by: Richard Arenburg

A recent case from a federal court in the Northern District of Georgia provides an interesting perspective on the termination of a nonqualified retirement plan with a traditional defined benefit formula offering lifetime annuity payments. In Taylor v. NCR Corporation et. al., NCR elected to terminate such a nonqualified retirement plan. The termination decision not only precluded new entrants to the plan and the cessation of benefit accruals for active employees, but it also affected retirees in payout status receiving lifetime payments. Those retirees received lump sum payments discounted to present value in lieu of the lifetime payments then being paid to them.

At the time NCR terminated the plan, its provisions apparently provided that the plan could be terminated at any time provided that “no such action shall adversely affect any Participant’s, former Participant’s or Spouse’s accrued benefits prior to such action under the Plan. . . ” The

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The Yard-Man Inference is No Longer an Inference

February 3, 2015

Authors

benefitsbclp

The Yard-Man Inference is No Longer an Inference

February 3, 2015

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

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

January 27, 2015

Authors

Denise Erwin

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

January 27, 2015

by: Denise Erwin

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

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

December 30, 2014

Authors

Bard Brockman and Lisa Van Fleet

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

December 30, 2014

by: Bard Brockman and Lisa Van Fleet

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.

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Signature Authority Can Trigger ERISA Fiduciary Responsibility

September 8, 2014

Authors

benefitsbclp

Signature Authority Can Trigger ERISA Fiduciary Responsibility

September 8, 2014

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

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Would’ve, Could’ve, Should’ve

August 29, 2014

Authors

benefitsbclp

Would’ve, Could’ve, Should’ve

August 29, 2014

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.

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Hobby Lobby Fallout, Part 2 (With An Expanded Non-Profit Twist)

August 27, 2014

Authors

benefitsbclp

Hobby Lobby Fallout, Part 2 (With An Expanded Non-Profit Twist)

August 27, 2014

by: benefitsbclp

The so-called “contraceptive mandate” saga continues.  Since the passage of the ACA in Spring 2010, its preventive care requirement mandating coverage of all FDA-approved contraceptive drugs, devices, and related services – and at no cost to women – has been a point of controversy for non-profit religious organizations and closely held businesses, as we have discussed previously.

Although the government attempted to settle the matter for religious institutions by creating an  “accommodation” in final regulations issued in July of 2013, certain entities – both non-profit and for-profit – continued their challenges.  The final regulations provided non-profit group health plan sponsors that hold themselves out as religious organizations and that have religious objections to contraceptive coverage (called an “eligible organizations”) an alternative to offering the contraceptives to which it objects.

However, the alternative required completing and mailing a “self-certification” to the sponsor’s insurer that acts as a

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