Adam V. Russo | August 19, 2009

The number of cases that apply the Supreme Court’s opinion in Metropolitan Life Insurance Company v. Glenn, 128 S. Ct. 2343 (2008) , when reviewing a decision to deny employee benefits by an administrator with a conflict of interest, continue to grow. The most recent example is Raybourne v. Cigna Life Insurance Company of New York, No. 08-2754 (7th Cir. 2009), where the plaintiff was a participant in his employer’s long-term disability benefits plan. (more…)

Category: 7th, Conflict of Interest, ERISA, MetLife v. Glenn | No Comments »
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Adam V. Russo | July 28, 2009

In Administrative Committee of the Wal-Mart Stores, Inc. v. Gamboa, 479 F.3d 538 (8th Cir. 2007), an ERISA plan administrator brought suit seeking equitable reimbursement from a plan participant who had received a settlement from a tortfeasor. Although the reimbursement provision was contained in an SPD for a health plan, the employer had no formal written health plan. Reversing summary judgment for the participant, the Eighth Circuit held that the plan administrator reasonably construed the SPD to be on the plan document for purposes of a group health plan in the absence of any formal plan and that the reimbursement provision in the SPD was therefore enforceable. (more…)

Category: 10th, 7th, 8th, Fiduciary Liability, Plan Language, Summary Plan Description | No Comments »
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Adam V. Russo | July 28, 2009

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.”

(more…)

Category: 4th, 7th, Exclusion, Plan Language | No Comments »
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Adam V. Russo | June 26, 2009

Anderson v. Dergance, 2009 U.S. Dist. LEXIS 51593 (N.D. Ill. June 18, 2009)

This ERISA plan reimbursement case applies the Sereboff holding to find in favor of an ERISA plan’s claims to specifically identifiable funds held in an attorney’s trust account following a personal injury settlement. (more…)

Category: 7th, ERISA | No Comments »
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Adam V. Russo | May 28, 2009

by Fred Schneyer of PLANSPONSOR, www.plansponsor.com

An Indiana manufacturer has received a mixed ruling from a federal judge in a lawsuit alleging its misdeeds in the handling of its benefits program constituted a fiduciary breach. (more…)

Category: 7th, ERISA, Fiduciary Liability | No Comments »
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Adam V. Russo | April 23, 2009

Sharon Mondry worked for American Family and sought payment for speech therapy for her son from her self-funded health plan sponsored by American Family and administrated by the CIGNA the TPA. CIGNA denied payment fro Zev Mondry’s speech therapy on the basis that it was educational training and not restorative pursuant to the terms of the Plan Document. After months of trying, Mondry finally obtained all the relevant Plan documents and eventually got CIGNA to reverse its denial and pay the claims. Mondry filed suit alleging that American Family and CIGNA had violated a statutory obligation to produce plan documents and breached their fiduciary duties by misrepresenting the terms of the Plan. (more…)

Category: 7th, Summary Plan Description | No Comments »
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Adam V. Russo | November 11, 2008

Most lawsuits to recover damages in car accidents are resolved in state courts.  State courts will order that at least a portion of the judgment be deposited into court when it appears that a health plan may have the right to reimbursement.  But can a state court override the right of the health plan to recovery? This issue was addressed in Iowa Health System, Inc. v. Graham, 2008 WL 2959796 (C.D. Ill., July 30, 2008). (more…)

Category: 5th, 7th, Subrogation | 3 Comments »
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Adam V. Russo | November 6, 2008

TPAs rely heavily on ERISA’s requirements that claimants must exhaust their administrative remedies before going to court, and when they do sue, assuming that the Plan documents grant the claim administrator the appropriate discretionary authority, they must show that the claim administrator abused its discretion when denying their claim, before any court will get to the merits of their allegations.

Few plaintiffs are able to meet these burdens, and so either don’t sue or often get their lawsuits quickly dismissed.  Until recently most courts were not very sympathetic to plaintiffs’ arguments of procedural violations, but things are changing, the most significant development being the Supreme Court’s decision this summer in MetLife v. Glenn. (more…)

Category: 7th, 9th, Claims Procedures, Claims Review | 1 Comment »
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Adam V. Russo | August 15, 2008

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. (more…)

Category: 7th, ERISA, Illinois, Preemption | 1 Comment »
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Adam V. Russo | August 4, 2008

In the case of Franciscan Skemp Healthcare, Inc. v. Central States Joint Board Health & Welfare Trust Fund No. 07-3456 (7th Cir.)(July 31, 2008), the Seventh Circuit Court of Appeals determined that when a party files a pure state law claim against an ERISA plan, preemption to Federal Court is improper. (more…)

Category: 7th | No Comments »
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Adam V. Russo | July 29, 2008

The 7th Circuit Court of Appeals has just held in Pakovich v. Broadspire Services, Inc., that when a plan administrator fails to issue a benefits determination, and there is no administrative decision regarding a claim on record, the Court is not to make a decision in lieu of the administrator.  Instead, the case is remanded to the administrator, who must make a clear benefits determination decision.  Only after all administrative options are exhausted may either party to said decision appeal the decision to the Federal Courts under ERISA.

http://wislawjournal.com/article.cfm/2008/07/28/071520-Pakovich-v-Broadspire-Services-Inc (more…)

Category: 7th | No Comments »
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Adam V. Russo | June 9, 2008

A Federal Court of Appeals verdict reversed the decision of both Wisconsin arbitrators and the Federal District Court in Edstrom Industries Inc. v. Companion Life Insurance Co., No. 07-2165, where the arbitrator and trial court failed to apply Wisconsin law holding that stop-loss insurance is not considered to be “reinsurance”.

Wisconsin Federal District Court sustained an arbitrator’s decision in a stop loss case between the group Edstrom Industries and its stop loss carrier.  The arbitrator had ruled in favor Of Companion Life, holding that Edstrom failed to disclose information to its stop-loss carrier, Companion Life, concerning a seriously ill dependent child. (more…)

Category: 7th, Stop Loss, Wisconsin | No Comments »
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Adam V. Russo | June 4, 2008

In the case of Graphic Communications National Health and Welfare Fund v. Tackett, 2008 WL 2020504 (S.D.Ill.) (May 09, 2008), the District Court held that workers’ compensation awards are subject to ERISA plan reimbursement rights, to protect the Plan and the plan participants and prevent undue cost shifting.

Roy F Harmon III tells us the story of an employee injured at work, who files with the workers’ compensation carrier, and whose claim is denied by the carrier.  The employee files with the health plan, advising them of the carrier’s denial, and the Plan dutifully pays the claims.  Only then does the employee retain and attorney, appeal the carrier’s denial, and obtain settlement funds from the workers’ compensation carrier. http://healthplanlaw.com/?p=627#more-627 (more…)

Category: 7th | No Comments »
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Adam V. Russo | July 18, 2007

The Southern District Court of Indiana held on February 8, 2007 in South Central Indiana School Trust v. Virginia Poyner, 2007 U.S. Dist. LEXIS 9368, that “in Sereboff, the Supreme Court held that Great-West did not apply to a situation where the third-party proceeds were segregated and hence “specifically identifiable.” Sereboff, 126 S.Ct. at 1874. Rather, such a claim for recovery was for enforcement of an equitable lien. Id. at 1874-75. And, going a step further, the Court said that where, as here, there is an equitable lien by agreement, there is no necessity that the funds even be specifically traced. Id. at 1875. According to the Court, the effort to recover such an agreed preexisting lien is equitable in nature.” (more…)

Category: 7th, Claims Procedures, Standings | No Comments »
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Adam V. Russo | July 18, 2007

In Cheryl Street v. Ingalls Memorial Hospital, (2007 U.S. Dist. Lexis 18643), the Northern District Court of Illinois held on March 15, 2007 that just as a Plan must identify funds prior to seeking equitable relief in Federal Court, so too must relief sought by participants be specifically identifiable. In one case, decided by the Third Circuit Court of Appeals, a group of employee Plan Participants brought their Plan Administrator to court for handling their assets in an irresponsible manner. In Eichorn, et al. v. AT&T Corp., et al., 484 F.3d 644, (May 2, 2007), the Court held that while ERISA makes it illegal for a Plan Administrator to prevent the attainment of rights provided by the Plan, actions that lessen the value of the rights are not so prohibited. As such, in a case like this one, the only relief available was in the form of monetary awards and back pay, which is not “equitable relief” for purposes of Federal jurisdiction. (more…)

Category: 3rd, 6th, 7th, Claims Procedures, Claims Review, Coordination of Benefits, ERISA, Provider Reimbursement, Third Party Administrators | No Comments »
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