Archive for the ‘4th’ Category

by Roy Harmon, III, www.healthplanlaw.com

A typical plan will contain an exclusion for accidents or injuries resulting from intoxication, unlawful conduct and so forth. How the plan states the exclusion can vary quite a bit, and the distinctions can make a significant difference in outcomes.

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In Thomas v. Reliance Standard Life Insurance Co., 487. F. Supp. 2d 697 (D.S.C. 2007), the court examined whether death by asphyxia from vomitus resulting from drug self-administration was an accident within the terms of an ERISA-governed policy. Reliance Standard denied benefits pursuant to the policy’s exception for losses caused by suicide or intentionally self-inflicted injuries because the insured had expressed a desire to commit suicide in the exact place he was later found dead. Reliance Standard further argued that the insured’s intentional use of prescription drugs contributed to his inability to maintain a clear airway. The court sided with the insurer, citing evidence that the insured “intended to commit suicide, ingested dangerous narcotic medication, and died as a result.” Accordingly, the court concluded that the insurer “reasonably found that [the insured] intended the ultimate result, although he may not have anticipated the exact means.”

In Eckelberry v. Reliastar Life Insurance Co., 469 F.3d 340, the Fourth Circuit affirmed the insurer’s determination that the decedent’s fatal automobile collision did not qualify as an “accident” as defined under the subject ERISA plan. The insured died after he lost control of his car and collided headlong into the rear of a tractor trailer parked on the side of the road. At the time of the collision, the insured was not wearing his seat belt, and his blood alcohol level was 50 percent higher than the state’s legal limit. For purposes of establishing coverage, the plan defined accident as an “unexpected and sudden event in which the insured does not foresee.” The court determined that absent evidence of an insured’s subjective intent, an “objective analysis” governs whether death was “unexpected” when that term is undefined in accidental death policy. The court found that the circumstances of the insured’s accident were “perfectly consistent with his inebriated state” and noted that “all drivers know, or should know, the dire consequences of drunk driving.” In reaching its decision in favor of the insurer, the court joined what it characterized as “near universal accord that alcohol-related injuries and deaths are not ‘accidental’ under insurance contracts governed by ERISA.”

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by Amanda Bronstad of The National Law Journal, www.law.com

An association representing the restaurant industry has filed a petition for writ of certiorari before the U.S. Supreme Court to overturn a ruling by the U.S. Court of Appeals for the 9th Circuit upholding a law requiring employers in San Francisco to provide health insurance to their employees. Read more

In Arnold v. Hartford Life Insurance Co.( 542 F. Supp. 2d 471 (W.D. Va. 2008), Hartford denied a beneficiary’s claim for accidental death benefits, concluding that the insured’s death was not due to an “injury” as defined in the policy. The insured died at the scene of a motorcycle crash. The immediate cause of death was a closed-head injury with cervical spine fracture. At the time of the crash, the insured was legally intoxicated. Read more

Since the Glenn decision, a number of circuits have had an opportunity to consider and apply the Glenn Court’s reassessment of ERISA’s standard of review.Roumeliote v. LTD Plan for Employees of Worthington Industries, 298 Fed. Appx. 472 (6th Cir. 9/11/2008).

This was the first circuit to apply Glenn since Glenn was a Sixth Circuit decision and the Sixth Circuit’s determination in that case was affirmed by the Supreme Court. The Sixth Circuit affirmed the district court’s decision that the claim administrator’s denial of benefits was not arbitrary. Read more

Champion v. Black & Decker Inc., 2008 WL 5377692 (4th Cir. 2008)

McCauley v. First Unum Life Ins. Co., 2008 WL 5377680 (2nd Cir. 2008) Read more

In Gagliano v. Reliance Standard Life Ins. Co., 2008 WL 4916330 (4th Cir. 2008), an employee’s claim for long-term disability benefits was denied on the ground that she was not disabled under the terms of the plan.  The court ordered an independent medical examination that stated the employee was disabled but the plan administrator (who was also the insurer) denied the claim on appeal based on the plan’s preexisting condition exclusion. Read more

By Ron E. Peck, Esq.

If you have read the postings below (addressing the ongoing Supreme Court case of MetLife v. Glenn) you will note that the matter of what standard of review a Court applies when reviewing an administrator’s decision, is a major topic of conversation.  The issue literally dominates how much power administrators will have to interpret the terms of their plan documents.  In general, having discretion to interpret terms, and enjoying the Court deference that comes with it, is extremely important to administrators.  Discretion and deference, however, do not always guarantee Court acceptance of an administrator’s interpretation of plan terms. Read more

This 4^th Circuit case is another addition to the growing list of cases holding that contractual disputes between plan sponsors and claims administrators are subject to state law.

The defendant in this case, Information Systems and Networks Corp. (”ISN”) established a self-funded health benefit plan governed by ERISA.  ISN purchased insurance from the plaintiff in this case, Great-West Life and Annuity Insurance Company (”Great-West”) to cover some benefits under the Plan.  ISN also contracted separately with Great-West to provide stop-loss coverage. Read more

The Supreme Court held in LaRue v. DeWolff, Boberg & Associates that ERISA §502(a)(2) authorizes recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account.

Stevens, J., delivered the opinion of the Court, in which Souter, Ginsburg, Breyer, and Alito joined. Roberts filed an opinion concurring in part and concurring in the judgment, in which Kennedy joined. Thomas filed an opinion concurring in the judgment, in which Scalia joined. Read more

On June 18, 2007, the United States Supreme Court granted a writ of certiorari to hear the appeal of this Fourth Circuit case.  Their ruling will once again affect the application of ERISA.  Plaintiff (employee LaRue) alleged that the administrator had failed to invest his funds as instructed, resulting in a loss.  He sought monetary rewards, and both the District Court and Court of Appeals determined that the remedy he sought fell outside the scope of “equitable relief” § 1132(a)(3) of ERISA authorized. Money damages were the classic form of legal relief, absent from the list of equitable remedies available under § 1132(a)(3). Plaintiff could not recover under an equitable restitution theory since he did not allege that funds owed to him were in defendants’ possession but instead that the funds never materialized. Read more

Recently, in the state of Washington, a law was passed that prohibits workplace discrimination based upon sexual orientation. When an employee protested the denial of health care coverage to her partner by her employer’s self funded ERISA plan, she brought the matter to court. The court in turn determined that the law could not be enforced against private employers with self funded plans, as it conflicted with ERISA. Read more