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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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SCOTUS Meant What It Said & Said What It Meant: Dudenhoeffer Imposes Higher Pleading Standards

January 27, 2016

Authors

Jeffrey Russell and Katharine Finley

SCOTUS Meant What It Said & Said What It Meant: Dudenhoeffer Imposes Higher Pleading Standards

January 27, 2016

by: Jeffrey Russell and Katharine Finley

Stock DropIn a rebuke to the Ninth Circuit, the Supreme Court granted the Amgen defendants’ petition for certiorari, reversed the Ninth Circuit’s judgment and remanded the case for further proceedings consistent with its opinion in the district court. The unanimous per curiam opinion was issued without further briefing and oral argument, an unusual step in civil cases. The substance of the opinion and its handling by summary disposition sends a clear message: the Court meant what it said in Dudenhoeffer when it stressed the role of motions to dismiss in “divid[ing] the plausible sheep from the meritless goats” and crafted new liability requirements that plaintiffs must plausibly allege are met in order to state a claim. Admittedly, we steal liberally from Judge Kozinski’s dissent in Amgen in characterizing the

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“King” of the Road

July 6, 2015

Authors

Chris Rylands and Lisa Van Fleet

“King” of the Road

July 6, 2015

by: Chris Rylands and Lisa Van Fleet

ACAIn Roger Miller’s 1964 hit by the above name, he tells the tale of “a man of means by no means,” a man just scraping to get by. While he may not have a phone, a pool, pets, or cigarettes (and really, what does he need that last item for anyway?), after the Supreme Court’s 6-3 decision on June 25, however, such a man might be able to secure a premium tax credit to help pay for health insurance (yes, we realize he’d probably be Medicaid eligible, but just work with us here).

But what does the ruling mean for employers? At first, it might appear that it doesn’t mean very much; life under the Affordable Care Act will continue to move along much as it has for the last few

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Tibble: Much Ado About Nothing?

June 16, 2015

Authors

Lisa Van Fleet and Hal Morgan

Tibble: Much Ado About Nothing?

June 16, 2015

by: Lisa Van Fleet and Hal Morgan

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

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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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The Moench Presumption is Dead – Long Live the Dudenhoeffer Presumption

July 17, 2014

Authors

Brian Berglund and Jeffrey Russell

The Moench Presumption is Dead – Long Live the Dudenhoeffer Presumption

July 17, 2014

by: Brian Berglund and Jeffrey Russell

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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Hobby Lobby & the Religious Freedom Restoration Act of 1993

July 7, 2014

Authors

benefitsbclp

Hobby Lobby & the Religious Freedom Restoration Act of 1993

July 7, 2014

by: benefitsbclp

SCOTUSYou’ve seen all the headlines…  Supreme Court issued its decision in the Hobby Lobby case on the last day of its 2013-2014 term.  Sure, maybe it wasn’t as closely watched and groundbreaking as the Court’s -2012 decision upholding key provisions of the Patient Protection and Affordable Care Act (“ACA”), but it is a very big deal for certain employers.  Which ones?

Well, as discussed in our post following the Hobby Lobby oral arguments, the owners of certain closely-held for-profit organizations (namely Conestoga, Hobby Lobby, and Mardel) challenged the ACA’s preventive care requirement mandating coverage of all FDA-approved contraceptive drugs, devices, and related services.

While these companies do not object to most contraceptives now required to be provided by ACA’s market reforms, they oppose certain forms of emergency contraception (which they

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Do you know the Yard-Man (inference, that is)?

June 27, 2014

Authors

Chris Rylands

Do you know the Yard-Man (inference, that is)?

June 27, 2014

by: Chris Rylands

As a child, you may have sung “do you know the Muffin Man?,” but as an employer you should make sure you know the Yard-Man inference.

Read the Small PrintThe “Yard-Man inference” comes from the Sixth Circuit’s decision in Auto Workers v. Yard-Man, Inc.  In that opinion, the Sixth Circuit created a presumption that retiree welfare benefits vest on retirement, unless a collective bargaining agreement clearly states otherwise.

However, the inference that these types of benefits vest has not been well received in all courts. For example, the Third Circuit has held the exact opposite: that retiree welfare benefits granted under a CBA expire with the CBA unless the agreement explicitly states otherwise.  Auto Workers v. Skinner Engine Co..

The split between the Circuits has likely contributed to the

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U.S. Supreme Court: Inherited IRAs Are Not Exempt from Bankruptcy Estate

June 24, 2014

Authors

benefitsbclp

U.S. Supreme Court: Inherited IRAs Are Not Exempt from Bankruptcy Estate

June 24, 2014

by: benefitsbclp

Retirement Fund JarThe Bankruptcy Code allows debtors to exempt from their bankruptcy estate certain “retirement funds”, including amounts held in an individual retirement account (IRA) or Roth IRA.  The Code is silent, however, on whether amounts held in an inherited IRA are subject to creditors’ claims in bankruptcy.  The U.S. Supreme Court resolved that issue recently in Clarke v. Rameker, holding that funds held in inherited IRA accounts are not exempt from creditors’ claims.

The debtor in this case inherited her mother’s IRA and was receiving periodic distributions from the account.  At the time of the debtor’s bankruptcy filing, the inherited IRA had just over $300,000 left in it.  The debtor claimed that the exemption under the Bankruptcy Code for “retirement funds” covered her inherited IRA.  Her creditors challenged this

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The Sound of Silence: SCOTUS To Review Rules Governing Vesting of Retiree Health Benefits under CBAs

May 20, 2014

Authors

benefitsbclp

The Sound of Silence: SCOTUS To Review Rules Governing Vesting of Retiree Health Benefits under CBAs

May 20, 2014

by: benefitsbclp

Old Woman ShhhhThe Supreme Court has granted review in a case that will resolve a long-standing circuit split concerning the vesting of retiree health care benefits.  On May 5th, the Supreme Court granted certiorari in the case of M&G Polymers USA, LLC v. Tackett. In reviewing Tackett, the Supreme Court will have the opportunity to decide whether silence concerning the duration of retiree health-care benefits in collective bargaining agreements means the parties intended those benefit to vest and therefore continue indefinitely or whether such benefits are vested only where there is a clear statement that health care benefit are intended to survive the expiration of the collective bargaining agreement.

There has long been a split among the circuit courts regarding the requirement for vesting of retiree health care benefits providing

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