Adam V. Russo | September 1, 2010
SIIA, www.siia.org
By Thomas A. Croft, Esq.
I. The Supreme Court Clarifies ERISA Attorney Fee Provision
We have two reasons for reviewing Hardt v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149 (2010). First, it is the latest ERISA decision from the Supreme Court cases define ERISA jurisprudence, they cannot be ignored. Second, the case addresses an issue near and dear to our hearts – attorneys’ fees.
On its facts, Hardt is something of a plain vanilla disability case. Hardt was an executive assistant to the president of Dan River, Inc., a textile manufacturer. After being diagnosed with carpal tunnel syndrome, Hardt applied for long term disability (“LTD”) benefits. Her claim was denied by Reliance Standard Life Insurance Company (“Reliance”), Dan Rivers’ LTD insurer. On appeal, Reliance reversed itself in part and determined that Hardt was totally disabled from performing her current job, thus entitling her to 24 months of coverage. (more…)
Category: 8th, 9th, Attorneys' Fees, ERISA, Fiduciary, Summary Plan Description, Supreme Court |
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Adam V. Russo | August 27, 2010
Employer’s Guide to Self-Insuring Health Benefits, Thompson Publishing Group
Employers and other plan administrators are due greater deference in their benefits plan decisions than some lower courts have allowed, the U.S. Supreme Court ruled after admonishing two lower courts for failing to follow the High Court’s prior decisions establishing ERISA law on plan administration.
The High Court also admonished the current administration as well as courts for attempting to introduce more complex, inefficient and costly requirements in plan decision-making, and for encouraging court interference in those plan decisions. (more…)
Category: 2nd, ERISA, MetLife v. Glenn, PPACA, Summary Plan Description, Supreme Court |
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Adam V. Russo | August 25, 2010
Coordination of Benefits Handbook
Victims of accidents in subrogation/reimbursement cases have emotional appeal when they argue that tort settlements are reduced without some consideration of the fact that they were not “made whole” or had their recoveries diminished by not requiring a recovering plan to share the legal fees they incurred in making the settlement. There can be cases where the amount of the tort settlement seems to include significant amounts to reimburse losses beyond actual medical expenses incurred by the plan participant and paid by the ERISA plan. In this case, the 11th Circuit upheld an earlier ruling allowing the plan to recover the full amount it paid to a participant who received a much larger settlement. The decision was unusual in the clarity of its explanation of why the subrogation was in fact equitable. The plan gained an advantage by becoming involved in the tort settlement early enough to ensure a separate and identifiable portion of the settlement was set aside. (more…)
Category: 11th, ERISA, Made Whole Rule, Stop Loss, Subrogation, Summary Plan Description |
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Adam V. Russo | August 25, 2010
Coordination of Benefits Handbook
Although federal case law is well settled on the principle that an ERISA health plan is entitled to reimbursement of benefits paid from tort settlement proceeds that are clearly identified as such, it appears that attorneys for plan participants still come up with several arguments seeking to avoid such liability. Those arguments often rely on state statutes, but they often raise other issues. A recent decision by a U.S. District Court in Georgia in favor of the plan’s right to reimbursement indicates how modern federal courts dispose of those arguments. The case is Brown & Williamson Tobacco Corp. v. Collier, 2010 WL 1487772 (M.D. Ga., April 13, 2010). (more…)
Category: ERISA, Georgia, Made Whole Rule, Subrogation, Summary Plan Description |
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Adam V. Russo | August 5, 2010
Tuesday, August 3rd, I had the pleasure of speaking at the 2010 TriZetto Benefits Administration Client Conference held at the Sheraton Chicago Hotel & Towers in Chicago, IL.
Click here to see my entire PowerPoint presentation on “Innovative Plan Document Strategies”.
Category: Summary Plan Description |
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Adam V. Russo | July 9, 2010
This year, while the Sixth Circuit held that an illegal act exclusion could not be applied because of a lack of causation between the illegal act and the injuries for which benefits were sought, an Indiana district court found that an administrator’s decision to deny health benefits based on a plan exclusion was “not reasonable” even though it did not require the injury for which benefits are sought to be caused by the insured’s intoxicated state. In Shelby County Health Care Corp. v. Majestic Star Casino, LLC,184 plaintiff, acting pursuant to an assignment from its patient, challenged the ERISA plan administrator’s decision to deny the patient health insurance benefits. Plaintiff claimed that defendant improperly denied benefits for medical charges incurred by this patient, a plan insured, after he sustained injuries in a single-car accident while driving without a driver’s license or proof of insurance.185 Defendant denied benefits under the plan’s “illegal-act provision,” which excluded benefits for “any loss caused by, incurred for, or resulting from…[c]harges for or in connection with any injury or illness arising out of…the commission or attempted commission of an illegal or criminal act.”186 After rejecting the defendant’s attempt to assert a different basis for denial of benefits than that asserted by the claims administrator, the Sixth Circuit agreed with the district court that the term “illegal act” was ambiguous since it was undefined in the policy.187 It then found that a reasonable interpretation of “illegal act” might not include driving without insurance or driving without a license.188 Ultimately, since the record provided “no support for the assertion that driving without a license or driving without insurance ‘caused’ [the] accident and resulting injuries,” the Sixth Circuit upheld the finding that plaintiff erred in denying the claim for benefits.
Category: 6th, Exclusion, Summary Plan Description |
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Adam V. Russo | July 9, 2010
This year’s lone felony/intoxication case raises an interesting question: when is driving under the influence a felony? In Kay-Woods v. Minnesota Life Insurance Co.,13 the insured died in a single-vehicle accident while driving with a revoked license and under the influence of alcohol and cocaine. The policy provided that benefits would not be paid if the death resulted from or was caused directly by commission of a felony. Although the spouse argued the cause of the revoked license was a previous reckless driving conviction, the evidence showed this same reckless driving conviction extended an earlier DUI license revocation. Under Illinois Vehicle Code, driving under the influence of alcohol was a Class felony; therefore, the district court ruled that the felony exclusion applied.
Category: Exclusion, Illinois, Summary Plan Description |
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Adam V. Russo | July 9, 2010
Like Ross, the Ninth Circuit issued a similar ruling in Standard Insurance Co. v. Morrison. Montana requires its commissioner of insurance to disapprove any [insurance] form…if the form…contains…any inconsistent, ambiguous, or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract… (more…)
Category: 9th, Preemption, Summary Plan Description |
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Adam V. Russo | July 9, 2010
Defendant-appellee Ken Ross is the commissioner of the Michigan Office of Financial and Insurance Services (OFIS). OFIS is responsible for licensing, examining, and supervising insurers and nonprofit health care corporations doing business in Michigan. To this end, OFIS’s authority includes the power to disapprove insurance policy forms and documents associated with such forms that are filed by insurers and nonprofit health care corporations doing business in the state. Under OFIS’s authority to regulate insurance, it promulgated rules, Michigan Administrative Code Rules 500.2201-500.2202 and 550.111-550.112, prohibiting insurers from issuing, delivering, or advertising insurance contracts or policies that contain “discretionary clauses” and providing that any such clause is void and of no effect. The rules took effect June 1, 2007. Given that employee benefit plans established or maintained under ERISA commonly contain discretionary clauses, the rules would prohibit any entity covered by them from “issuing, advertising, or delivering to any person in the State of Michigan, including an employee benefit plan subject to ERISA, an under-written policy or certificate that includes a discretionary clause.” (more…)
Category: 6th, ERISA, Flexible Spending Accounts, Michigan, Preemption, Summary Plan Description |
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Adam V. Russo | July 9, 2010
This unanimous decision resolved a split in the lower courts over a fact pattern regularly faced by administrators of ERISA plans when an employee and spouse are divorced, but the employee dies before changing the beneficiary designation for benefits. In Kennedy, the Supreme Court held that, notwithstanding the contrary terms of a divorce decree, the former spouse was entitled to receive payment from the plan because the divorce decree could not overcome the express terms of a plan document. (more…)
Category: ERISA, Preemption, Summary Plan Description, Supreme Court |
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Adam V. Russo | June 28, 2010
www.healthplanlaw.com
Here, there are no terms in the plan which allow it to be amended by inserting into the SPD such critical provisions as the administrator’s discretionary authority to interpret the plan or to determine eligibility for benefits. Indeed, this particular plan wholly fails to comply with § 1102(b)(3)’s requirement to include a procedure governing amendment of the plan. (more…)
Category: Summary Plan Description |
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Adam V. Russo | June 21, 2010
www.plansponsor.com
June 8, 2010 (PLANSPONSOR.com) – The U.S. District Court for the Western District of Wisconsin has found that an employer did not breach its fiduciary duties by failing to inform a former employee and his wife about all of their benefit options. (more…)
Category: 7th, Federal Circuits, Summary Plan Description, Wisconsin |
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Adam V. Russo | March 23, 2010
From The Bench By John H. Eggertsen, Esq. and Michael Friedman, Esq.
As health care costs continue to rise, and employers become more vigilant about policing benefit costs, it is perhaps inevitable that lawsuits by employers against their plan’s TPA are likely to increase. A recent such case, W.E. Aubuchon Company, inc. v. BeneFirst, LLC, 2009 WL 3272491 (D. Mass.), illustrates this trend. (more…)
Category: ERISA, Summary Plan Description, Third Party Administrators |
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Adam V. Russo | March 16, 2010
Yesterday Monday, March 15th I had the opportunity to speak about The Phia Group’s Innovative Plan Document Design services at the ECI User Group Conference held at the Loews Ventana Resort in Tucson, AZ. click here to see the entire PowerPoint presentation.
Category: News, Summary Plan Description |
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Adam V. Russo | February 17, 2010
By Chris Aguiar of The Phia Group, LLC
Can anyone disagree with the notion of affordable healthcare? No matter where you sit on the political spectrum, I would imagine it would be difficult to vote against such an idea. Over the past few months, we have witnessed contentious debate on the most effective means to provide affordable healthcare for all. One of the main points of contention on that debate, as is always the case when dealing with political matters, is cost. (more…)
Category: Subrogation, Summary Plan Description |
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