Latest Entries

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

Captive insurance companies have steadily increased their share of the growing Alternative Risk Transfer (ART) market in the United States. To meet an increasing need for commercial coverage in short supply, a variety of captive insurance companies, including risk retention groups, have been formed as an alternative to traditional insurance carriers.

As popular “self-insurance” mechanisms for retaining risk, captives continued to strengthen their capital base, according to a July 2007 study based on 175 captives filing annual statements with A.M. Best.  Policyholder surplus for the group grew 10.3% in 2006, following 9.6% growth the previous year. Read more

The Minnesota Senate and House both agree that it is essential for victims of the Interstate 35W bridge collapse to be compensated for their losses, however, the amount of proposed settlement funds are in opposition.  The Senate bill would establish a $25 million fund while the House bill would establish a $40 million fund. The Senate bill would set a limit on how big the victim’s settlement would be.  The Senate bill voids settlement negotiations based on the severity of injuries, loss of income, or pain and suffering for family members, whereas, the House bill proposes no such limitations on individual victim settlements. Read more

Roy F. Harmon III has posted recent U.S. Department of Labor legal endeavors regarding employee benefit plans on his Health Plan Law blog (http://healthplanlaw.com/).  In recent months, most legal controversies regarding ERISA plans have related to plan administration and violations of fiduciary duty.  Whether it is an individual plan member suing to enforce plan terms (see LaRue v. DeWolff, Boberg & Associates below) or the U.S. Department of Labor investigating irresponsible management of plan funds (the sale, for example, of a $28 million dollar plan investment for $4.5 million), fiduciary duties to plan members is at the forefront of recent ERISA law.

The Supreme Court has held that if a self-funded plan administrator reserves the discretionary right to interpret plan terms, in the plan document itself, courts will apply an arbitrary and capricious standard, questioning the administrator’s interpretation only if it has no reasonable basis.  Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S. Ct. 948 (1989).  Since that decision was handed down, the courts have been more strict in their analysis of plan terms, and have been quick to find fault with plans’ discretionary provisions. Read more

In North Dakota, the State’s workers’ compensation carrier was accused of faulty claims handling and administration.  Workforce Safety and Insurance was therefore examined by a third party, Marsh USA, Inc., at the behest of Gov. John Hoeven.  Marsh determined that the carrier was not unfairly denying injured workers’ claims. Read more

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.

Minnesota lawmakers are in the process of discussing possible compensation to victims of the Interstate 35W bridge collapse to make up for damages including lost wages and medical expenses. If the fund is established, insurance companies that already paid victims’ medical bills might have a right to take some of the money, through subrogation.Insurance companies including HealthPartners, Medica, Blue Cross Blue Shield, who cover “fully insured” businesses (usually private businesses that buy insurance coverage, and when there’s a claim, the insurance company pays), said they won’t fight to seek a portion of the compensation. However subrogation could still cause a threat to victims covered under of “self- insured” businesses. Read more

Supreme Court Justice Anthony M. Kennedy declined an application for a continuance of the San Francisco ordinance that sets minimum levels of spending by employers on health care. SEE COURT ORDER

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

The Supreme Court will be granting certiorari to MetLife, et al., v. Wanda Glenn.  While MetLife v. Glenn reinforces a third party administrator’s (”TPA”) right to make administrative decisions and interpret the terms of benefit plans when it is not the party funding the plan, this case asks whether a Plan Administrator faces a conflict of interest if it not only determines whether a claim is payable, but also pays the claim with its own funds. Read more

New York Attorney General Andrew Cuomo has announced an industry-wide investigation of health care claims consultant Ingenix, a UnitedHealth Group subsidiary, for manipulating reimbursement rates provided to their clients, such as BlueCross BlueShield. The investigation has exposed Ingenix’s intent to under reimburse their clients and members, and collect funds unrelated to relevant medical expenses for private gain.  Cuomo issued 16 subpoenas to insurers and benefit plans that have been affected by the conduct.  He also plans to file suit against Ingenix and its parent company, UnitedHealth Group. Read more

The Golden Gate Restaurant Association asked the Supreme Court to vacate the 9^th Circuit panel’s stay of a district court decision invalidating the ordinance.  The requested stay would prevent enforcement of the ordinance during the period leading up to a decision by the Ninth Circuit on the matter. Read more

February 7, 2008

Las Vegas, Nevada

Adam V. Russo, Esq. and Ron Peck, Esq. presented at the HCAA 2008 Executive Forum held at the Venetian Resort & Casino, with their seminar on health care reform and the upcoming presidential election. See the entire presentation.

Recently, in the wake of last August’s horrific bridge collapse on I-35 in Minnesota over the Mississippi River, state lawmakers in Minnesota are attempting to establish a recovery fund to ensure that victims in the disaster receive compensation for their losses. The problem is that a great majority of the victims had their medical coverage provided by ERISA governed welfare benefit plans. The politicians do not want any compensation to reach the hands of the insurance companies, who seek reimbursement through their subrogation provisions.State lawmakers are thus working on legislation to ensure that survivors’ insurers won’t be able to claim any of the money that insureds may receive in settlement.  Due to rising health care costs, many of the health plans involved are increasingly laying claim to the money patients have won in settlement through subrogation action. Read more