Justia ERISA Opinion Summaries

The US Airways health benefits plan paid $66,866 in medical expenses for injuries suffered by McCutchen, its employee, in a car accident caused by a third party. The plan entitled US Airways to reimbursement if McCutchen recovered money from the third party. McCutchen’s attorneys secured $110,000 in payments, and McCutchen received $66,000 after deducting the contingency fee. US Air¬ways demanded reimbursement of the full $66,866 and filed suit under section 502(a)(3) of the Employee Retirement Income Security Act, which authorizes health-plan administrators to bring a civil action “to obtain ... appropriate equitable relief ... to enforce .. the plan.” The district court granted US Airways summary judgment. The Third Circuit vacated, reasoning that equitable doctrines and defenses overrode the reimbursement clause, which would leave McCutchen with less than full payment for his medical bills and give US Airways a windfall. The Supreme Court vacated and remanded, holding that the plan’s terms govern. An administrator can use section 502(a)(3) to obtain funds that its beneficiaries promised to turn over. ERISA focuses on what a plan provides; section 502(a)(3) does not authorize “appropriate equitable relief” at large,” but only relief necessary to enforce “the terms of the plan” or the statute. While equitable rules cannot trump a reimbursement provision, they may aid in construing it. The plan is silent on allocation of attorney’s fees, and the common¬fund doctrine provides the appropriate default rule. View "US Airways, Inc. v. McCutchen" on Justia Law

Respondents, on behalf of beneficiaries of the CIGNA Corporation's ("CIGNA") Pension Plan, challenged the new plan's adoption, claiming that CIGNA's notice of the changes was improper, particularly because the new plan in certain respects provided them with less generous benefits. At issue was whether the district court applied the correct legal standard, namely, a "likely harm" standard, in determining that CIGNA's notice violations caused its employees sufficient injury to warrant legal relief. The Court held that although section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1022(a), 1024(b), 1054(h), did not give the district court authority to reform CIGNA's plan, relief was authorized by section 502(a)(3), which allowed a participant, beneficiary, or fiduciary "to obtain other appropriate relief" to redress violations of ERISA "or the [plan's] terms." The Court also held that, because section 502(a)(3) authorized "appropriate equitable relief" for violations of ERISA, the relevant standard of harm would depend on the equitable theory by which the district court provided relief. Therefore, the Court vacated and remanded for further proceedings. View "CIGNA Corp. v. Amara et al." on Justia Law

Hartford is the administrator of Wal-Mart’s Group Disability Plan, which is covered by the Employee Retirement Income Security Act. The policy requires any suit to recover benefits pursuant to ERISA, 29 U. S. C. 1132(a)(1)(B), to be filed within three years after “proof of loss” is due. Heimeshoff filed a claim for long-term disability benefits. Following mandatory administrative review process, Hartford issued a final denial. Almost three years after the final denial but more than three years after proof of loss was due, Heimeshoff sought judicial review under ERISA. The district court dismissed, reasoning that while ERISA does not provide a statute of limitations, the contractual limitations period was enforceable under state law and Circuit precedent. The Second Circuit affirmed. The Supreme Court affirmed, finding the limitations provision enforceable. A participant’s ERISA cause of action does not accrue until the plan issues a final denial, but it does not follow that a plan and its participants cannot agree to commence the limitations period before that time. The Court noted that contractual limitations provisions should ordinarily be enforced as written. The period at issue is not unreasonably short and does not undermine ERISA’s two-tiered remedial scheme by causing participants to shortchange the internal review process. If administrators attempt to prevent judicial review by delaying the resolution of claims in bad faith, the penalty for failure to meet regulatory deadlines is immediate access to judicial review for the participant and courts can apply waiver or estoppel. Plans offering appeals beyond what is contemplated in the internal review regulations must agree to toll the limitations provision during that time, 29 CFR 2560.503–1(c)(3)(ii). View "Heimeshoff v. Hartford Life & Accident Ins. Co." on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Retirees, dependents of retirees, and the union filed a class action suit against the retirees’ former employer, M&G, after M&G announced that they would be required to make health care contributions. The district court found M&G liable for violating a labor agreement and an employee welfare benefit plan and ordered reinstatement of the plaintiffs to the current versions of the benefits plans they were enrolled in until 2007, to receive health care for life without contributions. The Sixth Circuit affirmed. The district court properly concluded that the retirees’ right to lifetime healthcare vested upon retirement after concluding that documents, indicating agreement between the union and the employers to “cap” health benefits and several “side” letters were not a part of the applicable labor agreements. View "Tackett v. M&G Polymers USA, LLC," on Justia Law

Edmonson’s husband was insured under a Lincoln group life insurance policy, established under an Employee Retirement Income Security Act employee benefit plan. When her husband died, Edmonson was entitled to a $10,000 benefit. The policy states that benefits, “will be paid immediately after the Company receives complete proof of claim.” It does not state that Lincoln will pay benefits using a retained asset account. Edmonson submitted a Lincoln claim form that stated that Lincoln’s usual method of payment is to open a SecureLine Account in the beneficiary’s name. Lincoln set up an interest-bearing SecureLine Account in Edmonson’s name in the amount of $10,000, and sent her a checkbook. In using retained asset accounts, an insurance company does not deposit funds, but merely credits the account; when a beneficiary writes a check on the account, the insurer transfers funds to cover the check. Three months after Lincoln set up the account, Edmonson withdrew the full amount. Lincoln paid $52.33 in interest. Edmonson contends that the profit Lincoln earned from investing the retained assets was greater than that amount and that Lincoln made $5 million in profit in 2009 by investing retained assets. Edmonson brought an ERISA claim claiming violation of fiduciary duties, 29 U.S.C. 1002(21)(A). The district court granted Lincoln summary judgment, concluding Lincoln was not acting in a fiduciary capacity when it took the challenged actions. The Third Circuit affirmed. View "Edmonson v. Lincoln Nat'l Life Ins. Co." on Justia Law

Frazier, a sorter for Publishers Printing, was covered by Publishers’ employee benefit plan, which provided disability insurance. In 2009, at age 42, she left her job due to back pain that radiated down her legs, which she thought was caused by arthritis and a bulging disc, though she could not remember any fall or injury that initiated the pain. An MRI revealed mild disc dislocation. Her family physician diagnosed her with lower back pain and radiculopathy and in 2010 opined that Frazier was unable to return to work at regular capacity. Frazier participated in limited physical therapy. Another physician prescribed lumbar epidural injections and eventually permitted her to return to work. The plan denied Frazier’s claim for long-term disability benefits after reviewing medical evidence and job descriptions from Publishers and the U.S. Department of Labor. A Functional Capacity Evaluation indicated that Frazier “is currently functionally capable of meeting the lower demands for the Medium Physical Demand level on a 8 hour per day.” Frazier sued under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The district court granted judgment for the plan, reasoning that the administrator had discretion to deny Frazier’s claim, and that denial of benefits was not arbitrary. The Sixth Circuit affirmed. View "Frazier v. Life Ins. Co. of N. Am." on Justia Law

Plaintiffs, insured under employer health plans, filed a proposed class action alleging that health-insurance companies violated Wisconsin law by requiring copayments for chiropractic care. The insurance code prohibits insurers from excluding coverage for chiropractic services if their policies cover the diagnosis and treatment of the same condition by a physician or osteopath. The policies at issue provide chiropractic coverage, although, like other services, it is subject to copayment requirements. The complaint cited provisions of the Employee Retirement Income Security Act for recovery of benefits due, 29 U.S.C. 1132(a)(1)(B) & 502(a)(3), and for breach of fiduciary duty, sections 1132(a)(3), 1104. The district court dismissed. The Seventh Circuit affirmed. Nothing in ERISA categorically precludes a benefits claim against an insurance company. The complaint alleges that the insurers decide all claims questions and owe the benefits; on these allegations the insurers are proper defendants on the 1132(a)(1)(B) claim. The complaint nonetheless fails to state a claim for breach of fiduciary duty; setting policy terms, including copayments, determines the content of the policy, and decisions about the content of a plan are not themselves fiduciary acts. View "Larson v. United Healthcare Ins. Co." on Justia Law

The plant’s union and TRW negotiated collective bargaining agreements, which included provisions for healthcare benefits for retirees. The last CBA became effective in 1993 and was scheduled to expire in 1996. The plant closed in 1997. TRW and the union entered into a termination agreement that provided that any beneficiary, who is receiving or entitled to receive any payment and/or benefit under the CBA, “shall continue to receive or be entitled to receive such payment and/or benefit as though the CBA and Pension Plan had remained in effect.” In 2011, TRW terminated prescription drug coverage for Medicare-eligible retirees, replacing it with an annual contribution to a health reimbursement account. Plaintiffs claimed that this change modified their benefits in violation of TRW’s contractual obligation and filed a purported class action under the Labor Management Relations Act, 29 U.S.C. 185(a), and a claim for benefits under the Employment Retirement Income Security Act, 29 U.S.C. 1132(a)(1)(B). The district court granted TRW’s motion to compel arbitration. The Sixth Circuit affirmed as to the two named Plaintiffs, declining to address the rights of hypothetical plaintiffs. View "VanPamel v. TRW Vehicle Safety Sys., Inc." on Justia Law

The Fund is a multi-employer trust fund under the Taft-Hartley Act, 29 U.S.C. 186, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. Blue Cross is a Michigan non-profit corporation; its enabling statute authorizes the State Insurance Commissioner to require it to pay a cost transfer of one percent of its “earned subscription income” to the state for use to pay costs beyond what Medicare covers. In 2002 the Fund converted to a self-funded plan, and entered into an Administrative Services Contract with Blue Cross, which states that Blue Cross is not the Plan Administrator, Plan Sponsor, or fiduciary under ERISA; its obligations are limited to processing and paying claims. In 2004 the Fund sued, claiming that Blue Cross breached ERISA fiduciary duties by imposing and failing to disclose a cost transfer subsidy fee to subsidize coverage for non-group clients. The fee was regularly collected from group clients. Self-insured clients were not always required to pay it. Following a first remand, the district court granted class certification and granted the Fund summary judgment. On a second remand, the court again granted judgment on the fee imposition claim and awarded damages of $284,970.84 plus $106,960.78 in prejudgment interest. The Sixth Circuit affirmed. View "Pipefitters Local 636 Ins. Fund v. Blue Cross & Blue Shield of MI" on Justia Law