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Deep Dive: Association Health Plans, Part 6: Forming an AHP: Legal and Governance Structure

July 20, 2018

Authors

Brian Berglund

Deep Dive: Association Health Plans, Part 6: Forming an AHP: Legal and Governance Structure

July 20, 2018

by: Brian Berglund

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”  One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”).  In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The Department of Labor issued its proposed rule on January 5, 2018 and its final rule on June 19, 2018.

In Part 1 of this “Deep Dive” series, we

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Seventh Circuit Holds that ERISA does not Preempt State “Slayer Statute”

February 9, 2018

Authors

Meredith Jacobowitz, Jennifer Stokes and Jeffrey Russell

Seventh Circuit Holds that ERISA does not Preempt State “Slayer Statute”

February 9, 2018

by: Meredith Jacobowitz, Jennifer Stokes and Jeffrey Russell

We turn once again to the sad and difficult task that plan administrators face when distributing the benefits of a participant who has been murdered by his or her designated beneficiary. Sad for obvious reasons.  Difficult because ERISA and state law may provide different answers.  ERISA directs a plan to honor a participant’s beneficiary designation—meaning that the murderer would receive the benefit. “Slayer statutes” prohibit the murderer from receiving a financial benefit from his or her victim, requiring the plan to disregard the beneficiary designation.

Our prior blog post suggested three strategies that a plan administrator might employ in the face of uncertainty: interpleader, receipt and refunding agreement, and affidavit of status.  Under the interpleader approach, the plan administrator would pay the benefit into the registry of the court and join each potential claimant as a party defendant. Each claimant would then argue for receipt of the

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

June 5, 2015

Authors

Serena Yee

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

June 5, 2015

by: Serena Yee

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

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Documentation Hardship for Hardships (and Participant Loans, Too)

May 22, 2015

Authors

benefitsbclp

Documentation Hardship for Hardships (and Participant Loans, Too)

May 22, 2015

by: benefitsbclp

What is the IRS thinking about when it announces that plan sponsors, even those using a qualified TPA/recordkeeper, should maintain the records for hardship distributions and participant loans?

401(k) plans particularly (although this applies to other types of qualified plans that permit participant loans) have been marketed and promoted to would-be participants as flexible retirement saving arrangements – so flexible that you can take your money back out without a problem either by borrowing it or by taking a hardship distribution. Depending on your perspective, this flexibility may be anathema to the notion of retirement savings, i.e., long-term savings and investing.   America’s 401(k) saving structure is, in this respect, more “flexible” than arrangements in most other countries that have similar plan structures. The unfortunate result of this sort of flexibility is “leakage” – about which officials at Treasury and Labor seem concerned.

So, to beg the obvious question, did

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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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