Archive for the ‘ERISA’ Category

In a decision that could set the stage for a test of the supremacy of a longstanding federal labor law, a panel of federal judges found Tuesday that San Francisco had the right to charge employers to help pay for its universal health care plan, the first in the nation.

The ruling, by a three-judge panel of the United States Court of Appeals for the Ninth Circuit, affirms a January decision by the same panel that required all but the smallest businesses in the city to contribute to employees’ health care costs or pay a fee to help the city provide care.  San Francisco officials hailed the decision as a major victory for its plan, called Healthy San Francisco, to provide health care for some 73,000 uninsured residents. Read more

The parents of a minor child sued their health plan insurer when it denied their daughter’s claims for benefits.  The parents argued that the insurer failed to comply with a state external review law for insurers, which required an independent review process for denied claims. The insurer asked the court to dismiss the claim, arguing that the state external review law was preempted by ERISA. Read more

On Monday September 15, 2008, Adam V. Russo, Esq. will be presenting his seminar on how the election affects upcoming legislation at the iWorks Summit 2008 Conference at the Coronado Island Marriot Resort in San Diego, CA.

See entire presentation before the conference

The Supreme Court held in MetLife vs. Glenn that conflicted interests require a higher standard of review whenever the claims adjudicator and the claims financier were the same.  Thus, any claim contested in court will confer a significant advantage to the arrangement where the claims are adjudicated by an independent third party and paid by an independent employer.  This means a disadvantage where the claims are both adjudicated and paid by the same two parties, such as employer’s self-administered and self-funded plan or fully insured plans. Read more

ERISA preempted an Illinois state law outlawing any claim on a workers’ compensation award, because the law related to benefits plans regulated by ERISA, a federal trial court decided. As a result, an employer may seek reimbursement of group health plan funds from workers’ compensation awards. The health plan paid the expenses before a determination was made that the claims were work related. The court determined that the settlements included reimbursement for health expenses that were paid by the plan. At least one of the awards was worded to assert that it was not a payment for health benefits, but the judge said that was an effort to stop a recovery attempt. Read more

On Monday September 8, 2008, Adam V. Russo, Esq. will be presenting his seminar on self-funding benefits and the new legal battles under ERISA at the Texas Association of Benefit Administrators (TABA) 2008 Fall Conference & Exhibition held at the Marriott Dallas Solana Hotel in Westlake, Texas.

See the entire presentation before the conference

The Providence Journal features a review by Mandy Twaddell, analyzing the new book by Peter Gosselin.  The book’s title is High Wire: The Precarious Financial Lives of American Families.  The book describes various pitfalls many American families experience today, and tells the tale of at least one encounter with ERISA. Read more

The United States District Court for the District of New Jersey, following a hearing on July 24, 2008, has approved a $250 million settlement in the matter of plan members versus Health Net, Inc.  Read more

by Ron E. Peck, Esq.

The matter of administrative discretionary authority, when administering a health benefits plan within the purview of ERISA, and the deference federal courts must show to such discretion, has been the new hot topic in ERISA ever since subrogation rights were affirmed by the Sereboff case.  The Supreme Court first stated that health plan administrators, who assert discretionary authority to administer a plan within the plan’s document, are due deference in Firestone Tire and Rubber Co. v. Bruch.  Afterward, federal courts could overturn administrator benefit determinations only if they find that the administrator has abused its discretion (an arbitrary and capricious standard of review). Read more

Roy F. Harmon III has posted recent U.S. Department of Labor legal endeavors regarding employee benefit plans on his Health Plan Law blog (http://healthplanlaw.com/).  In recent months, most legal controversies regarding ERISA plans have related to plan administration and violations of fiduciary duty.  Whether it is an individual plan member suing to enforce plan terms (see LaRue v. DeWolff, Boberg & Associates below) or the U.S. Department of Labor investigating irresponsible management of plan funds (the sale, for example, of a $28 million dollar plan investment for $4.5 million), fiduciary duties to plan members is at the forefront of recent ERISA law.

February 7, 2008

Las Vegas, Nevada

Adam V. Russo, Esq. and Ron Peck, Esq. presented at the HCAA 2008 Executive Forum held at the Venetian Resort & Casino, with their seminar on health care reform and the upcoming presidential election. See the entire presentation.

There is a recent newsworthy item that I wish to discuss, as it is pertinent to our industry.  The November 20, 2007 Wall Street Journal featured an extremely negative cover story, relating to the self-insured industry’s subrogation activities under ERISA.  These types of prominent news stories do nothing for the self-insured industry except motivate the public to change current ERISA legislation.  For those of you who do not know about this case, the story covers a woman’s collision with a semi-trailer truck seven years ago, leaving the 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, received a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust to be used for Mrs. Shank’s care.  Read more

On September 25, 2007, a Federal District Court in New Jersey held in Mulholland v. UFCW Local 1776 Participating Employers Health and Welfare Fund, 2007 WL 2814648 (DNJ) that the purchase of stop loss insurance does not preclude self-funded ERISA status. The court went on to say that because self-funded plans can come close to becoming a fully insured plan, the question is not whether a self-funded plan has reinsurance, but rather, how high is their specific deductible. In other words, does the self-funded plan retain considerable risk of loss, or, does the Plan purchase an excessive amount of stop-loss insurance? Read more

The Texas Made-Whole Rule, adopted in Ortiz v. Great Southern Fire & Casualty Insurance Co., no longer applies to cases where the Plan disclaims the rule and requires full reimbursement in the plan document. 597 S.W.2d 342, (Tex. 1980). In the Ortiz case the insurance carrier relied upon arguments made in equity. The court held that health plans do not have an equitable right to recovery until the plan beneficiary is fully compensated. Id. Read more

In the case of Bauhaus USA, Inc. v. Lillie Regina Holmes Copeland, et. al., 2007 Miss. LEXIS 545 (September 27, 2007), a self-funded Plan coming under the purview of ERISA sought reimbursement of claims it had paid on behalf of a minor child. The court took possession of funds in order to create a trust and use the funds to protect the minor. Read more