Archive for the ‘5th’ Category

On September 22, 2008 the Fifth Circuit issued its decision in Young v. Wal-Mart Stores, Inc., et. al.

The case involved an ERISA claim for accidental death and dismemberment (AD&D) benefits in the amount of $25,000. The decedent suffered from a history of severe hypertension. He stopped taking his medication, became very ill and began vomiting profusely and choked to death. The policy provided an exclusion for losses related “in whole or in part from…sickness.” Read more

You may have heard some grumbling about the recent case of Amschwand v. Spherion Corp., 2007 U.S. App. LEXIS 24435 (5th Cir. 2007).  The facts of the case are as follows:

Thomas Amschwand was a participant in his employer’s ERISA benefits plan, which included life insurance benefits.  The employer switched insurers after Thomas Amschwand was diagnosed with cancer. The new policy would not cover an employee unless and until that employee had worked one full day (post plan swap).  According to the Amschwand’s attorney, they were never advised of the requirement.  Unfortunately, Mr. Amschwand died without ever having worked a day after the employer had changed insurers. Read more

ERISA did not preempt a Louisiana Department of Insurance directive that limits insurer’s subrogation and reimbursement rights to cases where covered individuals have been “made whole”, the 5^th U.S. Circuit court of Appeals ruled in Benefit Recovery Inc. v. Donelon, 2008 WL 642972 (5^th Cir. March 11,2008). Read more

If the summary plan description (SPD) omits important provisions, such as subrogation and reimbursement, that are included in another document, the plan may not be able to compel beneficiaries to follow those provisions. In one such case, a federal judge shot down a plan’s denial after a participant refused to sign a subrogation agreement. The plan tried to impel him to sign the agreement before he had been treated for his injuries, but the SPD was silent on the issue of executing the agreement before submitting a claim. The plan document had the requirement that members must “execute and deliver such instruments and take such actions as the Plan may require to protect the Plan’s rights.” The court rejected plan arguments that inclusion of such language in the plan document complied with ERISA. Read more

Benefit Recovery, Inc. sued Louisiana Commisioner of Insurance and lost its case.  See entire 5th Circuit Court of appeals decision.

A Louisiana State Law requiring that insureds be made whole before an insurance carrier could seek reimbursement was upheld by the 5th Circuit, Benefit Recovery, Inc. v. Donelon, 2008 WL 642972 (March 11, 2008).  Note that the decision only applies to plans that are not self-funded, but will apply to plans that are fully insured, and governmental plans, even if ERISA otherwise applies.

The United States District Court for the Eastern District of Texas recently presided over a case involving a plan’s denial of claims due to a lack of signed subrogation agreement. Don Burgett, Et. Al. v. MEBA Medical and Benefits Plan, 2007 U.S. Dist. LEXIS 70934, (September 25, 2007). The Plan in this case lost, and the court determined the Plan’s conditioning payment of claims on the signing of a subrogation agreement was not supported by the summary plan document (”SPD”). The court held that the language of the SPD controls and additional agreements cannot create new rights for the Plan. Read more