www.myheat;hguide.com
MyHealthGuide Source: Thomas Croft, Esq., King & Croft LLP, 7/20/2011, www.StopLossLaw.com

Case: Woodruff & Sons, Inc. v. The Covenant Services Group, Inc., No. 8:11-cv-1096, in the United States District Court for the Middle District of Florida, July 12, 2011). Court’s Opinion

Mr. Croft’s Comment: This state law based case was filed against a TPA for allegedly failing to meet a stop loss policy deadline for the filing of an aggregate claim, with the result that the claim was denied. The defendant TPA moved to dismiss the Complaint against it, arguing that ERISA pre-empted the group’s state law claims. The Court’s analysis was straightforward.  From the Court’s Opinion: 

•  Plaintiff provided an employee benefit plan, pursuant to which Plaintiff served as the plan administrator. The parties entered into a Claims Administration Services Agreement (the “Agreement”) dated May 1, 2004, whereby Defendant was to perform certain ministerial, non-discretionary duties as a third-party claims administrator of Plaintiff’s employee benefit plan.
• Under the Agreement, Defendant was responsible for procuring and administering stop loss insurance coverage and timely submitting Plaintiff’s aggregate claim under the stop loss policy.
• Plaintiff alleges that Defendant failed to meet the stop loss policy’s deadline to submit the aggregate claim and, as a result, Plaintiff’s aggregate claim was denied.
• As an initial matter, the Court observes that the plan established by Plaintiff for the benefit of its employees and their dependents is an employee benefit plan governed by ERISA.
•  The parties do not dispute this fact. And ERISA comprehensively regulates such plans, and toward that end, includes a broad preemption provision.
• Specifically, under ERISA, “any and all state laws,” whether they be laws aimed at employee benefit plans or merely generally applicable laws, are preempted “insofar as they … relate to any employee benefit plan.”
• But while ERISA preemption is broad, it is not limitless. And it does not extend to state causes of action that affect employee benefit plans in “too tenuous, remote, or peripheral a manner.”

Finally, noting that, under the agreement between the group and the TPA, the latter was responsible for procuring and administering stop loss coverage, the Court added:

• “Plaintiff’s breach of contract claim relates to the recovery of monetary damages for Defendant’s alleged failure to timely file an aggregate claim relating to Plaintiff’s stop loss policy. There are no allegations in this case seeking any ERISA benefits, enforcement of any provision of the ERISA plan, or requesting any equitable relief arising under ERISA or the ERISA plan against any alleged ERISA entities. Accordingly, ERISA pre-emption does not apply to the facts of this case.”

The TPAs motion to dismiss was therefore denied, and it was ordered to file an Answer to the Complaint.

About Tom Croft, Esq. and King & Croft LLP

Tom Croft is an attorney with the firm of King & Croft LLP, Atlanta, Georgia. He has a national practice, consulting with and representing stop-loss carriers, MGUs, and other entities in matters arising in the self-funded employee benefit plan industry. Tom is a magna cum laude graduate of Duke University (1976) and an honors graduate of Duke University School of Law (Order of the Coif, 1979), where he served as Associate Dean and Senior Lecturer. He is a regular contributor to The Self-Insurer Magazine’s “From The Bench” column. Tom is licensed in Missouri (1979), Texas (1985) and Georgia (1992); he associates with local counsel in other jurisdictions when appropriate. Contact Tom at 404-577-8400, tac@king-croft.com  and visit www.StopLossLaw.com and www.king-croft.com.

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This entry was posted by cmonfils on Monday, July 25th, 2011 at 9:30 am and is filed under ERISA, Stop Loss, Third Party Administrators. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.