Justia ERISA Opinion Summaries

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Davis, insured under a Hartford long-term disability policy, began missing work due to chronic back pain, neuropathy, and fatigue caused by multiple myeloma. Relying on the opinion of Davis’s oncologist, Dr. Reddy, Hartford approved Davis’s claim for short-term disability benefits through April 17, 2012. In June, Hartford approved Davis for long-term disability benefits, retroactive to April, for 24 months. Davis could continue to receive benefits beyond that time if he was unable to perform one or more of the essential duties of “Any Occupation” for which he was qualified by education, training, or experience and that has comparable “earnings potential.” Reddy's subsequent reports were inconsistent. An investigator found “discrepancies" based on surveillance. Davis’s primary care physician and neurologist both concluded that Davis could work full-time under described conditions. Reddy disagreed, but would not answer follow-up questions. An orthopedic surgeon conducted an independent review and performed an examination, and reported that Davis was physically capable of “light duty or sedentary work” within certain restrictions. Other doctors agreed. Hartford notified Davis that he would be ineligible for benefits after April 17, 2014.Davis filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). The Sixth Circuit affirmed summary judgment in favor of Hartford. Hartford reasonably concluded that Davis could work full-time, under certain limitations; the decision was not arbitrary. View "Davis v. Hartford Life & Accident Insurance Co." on Justia Law

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Donna’s former husband, Carl, retired from Ford in 1998 and participated in Ford’s retirement plan. “In the event of an error” in calculating a pension, the plan requires a beneficiary to return the overpayment “without limitation.” A committee runs the plan, with “discretionary authority" to reduce the repayment. Carl and Donna divorced in 2009. Donna received half of the marital portion of Carl’s pension. Donna agreed to postpone drawing the pension. In 2013, Ford offered a lump sum payment in place of future monthly benefits and a $351,690 retroactive payment for the postponed monthly benefits. After paying taxes, Donna invested some of the money and gave some to her children. Ford audited Donna’s benefits. It discovered that the retroactive pension payment mistakenly included benefits from 1998, when Carl retired, instead of 2009. The payment should have been $108,500. Ford requested repayment; the committee invited Donna to apply for a hardship reduction. The application required disclosure of her finances, including her other substantial retirement funds and an inheritance. Donna did not apply; she sued.The Sixth Circuit affirmed summary judgment for Ford. The committee’s actions were neither wrong nor arbitrary. Donna did not establish that Ford’s inclusion of an incorrect retroactive-payment amount constituted constructive fraud. She knew that the retroactive payment was too high when she got it, the plan put her on notice that Ford could demand repayment, and she has the capacity to return the money. View "Zirbel v. Ford Motor Co." on Justia Law

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The Ninth Circuit affirmed the district court's grant of summary judgment for defendants in an action brought by plaintiff under the Employee Retirement Income Security Act (ERISA), challenging the denial of health care coverage for out-of-state residential treatment for anorexia nervosa.The panel held that defendants' denial of coverage did not violate the Mental Health Parity and Addiction Equity Act or the California Mental Health Parity Act where the denial of coverage was based solely on the Plan's exclusion of coverage for out-of-state treatment, which applies equally to mental and physical illnesses. In this case, plaintiff, aware of this exclusion, sent her daughter to an out-of-state residential treatment program for anorexia nervosa. The panel concluded that plaintiff has not shown that the Plan's requirement of in-state treatment is applied to mental health conditions, but not to other medical conditions. View "Stone v. UnitedHealthcare Insurance, Co." on Justia Law

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Beginning in‌ ‌‌2017,‌ ‌DaVita‌ ‌provided‌ ‌dialysis‌ ‌treatment‌ ‌to‌ ‌Patient‌ ‌A,‌ ‌who was ‌diagnosed‌ ‌ with‌ ‌end-stage‌ ‌renal‌ ‌disease‌ ‌(ESRD).‌ ‌‌Patient‌ ‌A‌ assigned his‌ ‌insurance‌ ‌rights‌ ‌to‌ ‌DaVita.‌ ‌Through‌ August‌ ‌2018,‌ ‌the‌ ‌costs‌ ‌of‌ ‌Patient‌ ‌A’s‌ ‌dialysis‌ ‌were‌ ‌reimbursed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Health‌ ‌Benefit‌ ‌Plan,‌ ‌governed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Retirement‌ ‌Income‌ ‌Security‌ ‌Act‌ ‌(ERISA), ‌at‌ ‌its‌ ‌bottom‌ ‌tier,‌ ‌which‌ ‌applied‌ ‌to‌ ‌providers‌ ‌who‌ ‌are‌ ‌“out-of-network.”‌ ‌All‌ ‌dialysis‌ ‌providers‌ were‌ ‌out-of-network.‌ ‌While‌ ‌most‌ ‌out-of-network‌ ‌providers‌ ‌are‌ ‌reimbursed‌ ‌in‌ ‌the‌ ‌bottom‌ ‌tier‌ ‌based‌ ‌on‌ ‌a‌ ‌“reasonable‌ ‌and‌ ‌customary”‌ ‌fee‌ ‌as‌ ‌understood‌ ‌in‌ ‌the‌ ‌healthcare‌ ‌industry,‌ ‌dialysis‌ ‌providers‌ ‌are‌ ‌subject‌ ‌to‌ ‌an‌ ‌“alternative‌ ‌basis‌ ‌for‌ ‌payment”;‌‌‌ ‌the‌ ‌Plan‌ ‌reimburses‌ ‌at‌ 87.5%‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌rate.‌ ‌Patient‌ ‌A‌ ‌was exposed‌ ‌to‌ ‌higher‌ ‌copayments,‌ ‌coinsurance‌ ‌amounts,‌ ‌and‌ ‌deductibles and ‌was‌ ‌allegedly‌ ‌at‌ ‌risk‌ ‌of‌ ‌liability‌ ‌for‌ ‌the‌ ‌balance‌ ‌of‌ ‌what‌ ‌was‌ ‌not‌ ‌reimbursed‌ .‌ ‌The‌ ‌Plan‌ ‌identified‌ ‌dialysis‌ ‌as‌ ‌subject‌ ‌to‌ ‌heightened‌ ‌scrutiny,‌ ‌ ‌which‌ ‌allegedly‌ ‌incentivizes‌ ‌dialysis‌ ‌patients‌ ‌to‌ ‌switch‌ ‌to‌ ‌Medicare. Patient‌ ‌A‌ ‌switched‌ ‌to‌ ‌Medicare.‌ ‌DaVita‌ ‌and‌ ‌Patient‌ ‌A‌ ‌sued,‌ ‌alleging‌ ‌that‌ ‌the‌ ‌Plan‌ ‌treats‌ ‌dialysis‌ ‌providers‌ ‌differently‌ ‌from‌ ‌other‌ ‌medical‌ ‌providers‌ ‌in‌ ‌violation‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌Secondary‌ ‌Payer‌ ‌Act‌ ‌(MSPA)‌ ‌and‌ ‌ERISA.‌ ‌ ‌ ‌ The‌ ‌Sixth‌ ‌Circuit‌ ‌reversed,‌ ‌in‌ ‌part,‌ ‌the‌ ‌dismissal‌ ‌of‌ ‌the‌ ‌claims.‌ ‌A‌ ‌conditional‌ ‌payment‌ ‌by‌ ‌Medicare‌ ‌is‌ ‌required‌ ‌as‌ ‌a‌ ‌precondition‌ ‌to‌ ‌suing‌ ‌under‌ ‌the‌ ‌MSPA’s‌ ‌private‌ ‌cause‌ ‌of‌ ‌action;‌ ‌the‌ ‌complaint‌ ‌sufficiently alleges ‌such‌ ‌a‌ ‌payment‌.‌ ‌DaVita‌ ‌plausibly‌ ‌alleged‌ ‌that‌ ‌the‌ ‌Plan‌ ‌violates‌ ‌the‌ ‌nondifferentiation‌ ‌provision‌ ‌of‌ ‌the‌ ‌MSPA,‌ ‌resulting‌ ‌in‌‌ ‌denials‌ ‌of‌ ‌benefits‌ ‌and‌ ‌unlawful‌ ‌discrimination‌ ‌under‌ ‌ERISA.‌ ‌ View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law

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The plaintiffs are participants in the Allergan Savings and Investment Plan, which provides various investment options, including an employee stock ownership feature for buying Allergan stock. According to the plaintiffs, the defendants were Plan fiduciaries and owed them commensurate duties under the Employee Retirement Income Security Act (ERISA). They claim that, although the public was unaware, the defendants knew or should have known that, before the divestiture of its generic-drug business, Allergan had conspired with other generic-drug manufacturers to fix prices, thereby artificially boosting its financial performance and its stock price. The plaintiffs cited inquiries from members of Congress and the Antitrust Division of the Department of Justice, seeking information about large price increases in certain generic drugs. The plaintiffs do not allege that Allergan was ever charged in connection with the investigation but claim that the defendants’ failure to remove Allergan stock as a Plan investment option or otherwise take action to protect Plan participants, violated ERISA.The Third Circuit affirmed the dismissal of the complaint. Even viewed in the light most favorable to the plaintiffs, the well-pled factual allegations fail to support a plausible inference that Allergan conspired with competitors to fix prices. Because all of the plaintiffs’ causes of action ultimately rest on the premise that the defendants knew or should have known about that supposed illegal conduct, the absence of allegations sufficient to support the existence of it is fatal to each of their claims. View "In re: Allergan ERISA Litigation" on Justia Law

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Kathleen Hendrix ("Hendrix"), as administratrix of the estate of Kenneth Morris Hendrix, deceased, appeals a circuit court judgment dismissing Hendrix's medical-malpractice wrongful-death claim against United Healthcare Insurance Company of the River Valley ("United"). Kenneth, who was covered by a health-insurance policy issued by United, died after United refused to pay for a course of medical treatment recommended by Kenneth's treating physician. The trial court determined that Hendrix's claim was preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), because the claim "relate[s] to" the ERISA-governed employee-benefit plan pursuant to which United had issued Kenneth's health-insurance policy. In October 2015, Kenneth was injured in an automobile accident. His physician recommended Kenneth be admitted to an inpatient-rehabilitation facility. Hendrix claimed United "imposed itself as [Kenneth's] health care provider, took control of [Kenneth's] medical care, and made a medical treatment decision that [Kenneth] should not receive further treatment, rehabilitation, and care at an inpatient facility." Instead, Hendrix contended United made the decision Kenneth should have been discharged to his home to receive a lower quality of care than had been ordered by his physicians. Kenneth died on October 25, 2015, due to a pulmonary thromboembolism, which, the complaint asserts, would not have occurred had United approved inpatient rehabilitation. The Alabama Supreme Court concurred with the circuit court that Hendrix's claim related to an ERISA-governed benefit plan, and thus preempted by the ERISA statute. View "Hendrix v. United Healthcare Insurance Company of the River Valley" on Justia Law

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In this ERISA action, the First Circuit affirmed the rulings of the district court entering judgment for Defendants on remand and refusing to award Plaintiff attorneys' fees for her success on a prior appeal, holding that there was no clear error on the part of the district court.Plaintiff spent several months at a residential mental health treatment center. Defendants covered certain costs of Plaintiff's treatment but denied coverage for a four-month period on the grounds that Plaintiff could have stepped down to a lower level of treatment during that period. Plaintiff brought suit seeking de novo review of her claim for coverage of the four-month period under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001-1461. The district court entered summary judgment for Defendants. The First Circuit vacated the judgment and remanded so the district court could consider additional evidence. On remand, the district court again granted summary judgment for Defendants. The First Circuit affirmed, holding (1) it was not clear error for the district court to conclude that, at the beginning of the four-month period, Plaintiff's continued stay at the residential facility was not medically necessary; and (2) there was no clear error in the district court's decision not to award attorney's fees. View "Doe v. Harvard Pilgrim Health Care, Inc." on Justia Law

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The Fund brought this action to collect $1.1 million in withdrawal liability under the Employee Retirement Income Security Act (ERISA). At issue was whether arbitration was properly initiated by Neshoma in response to the suit and whether Neshoma's third-party claim against its union was preempted by the National Labor Relations Act (NLRA).The Second Circuit held that the parties were bound by the Fund rules, which required Neshoma to initiate arbitration with the AAA by filing a formal request before the statutory deadline, and Neshoma failed to do so. The court also held that the district court did not err in dismissing Neshoma's third-party complaint against the Union on the pleadings as preempted by the NLRA. Accordingly, the court affirmed the judgment. View "American Federation of Musicians and Employers' Pension Fund v. Neshoma Orchestra and Singers, Inc." on Justia Law

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Title IV of the Employee Retirement Income Security Act of 1974 (ERISA) creates an insurance program to protect employees’ pension benefits. The Pension Benefit Guaranty Corporation (PBGC)—a wholly-owned corporation of the U.S. government—is charged with administering the pension-insurance program. PBGC terminated the “Salaried Plan,” a defined-benefit plan sponsored by Delphi by an agreement between PBGC and Delphi pursuant to 29 U.S.C. 1342(c). Delphi had filed a voluntary Chapter 11 bankruptcy petition and had stopped making contributions to the plan. The district court rejected challenges by retirees affected by the termination.The Sixth Circuit affirmed. Subsection 1342(c) permits termination of distressed pension plans by agreement between PBGC and the plan administrator without court adjudication. Rejecting a due process argument, the court stated that the retirees have not demonstrated that they have a property interest in the full amount of their vested, but unfunded, pension benefits. PBGC’s decision to terminate the Salaried Plan was not arbitrary and capricious. View "Black v. Pension Benefit Guaranty Corp." on Justia Law

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The Eighth Circuit reversed the district court's order requiring the Meadowvale Dairy Employee Benefit Plan to pay benefits and attorney's fees to Avera under the Employee Retirement Income Security Act of 1974 (ERISA). Avera alleged that the benefits at issue were due to a former employee of Meadowvale who received care at a hospital operated by Avera.The court held that, although the beneficiary assigned any and all causes of action to Avera, he never had a cause of action against the Plan. Therefore, Avera may not proceed against the Plan under ERISA as an assignee of a beneficiary or otherwise. In this case, after Meadowvale rescinded the beneficiary's coverage under the Plan, neither the employee nor an authorized representative of his exhausted internal remedies to challenge the decision. View "McKennan v. Meadowvale Dairy Employee Benefit Plan" on Justia Law