Headlines about "Disability plans"
Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Florida Retirement System Classification As 'Special Risk' Not Necessary to Invoke Heart/Lung Presumption, According to District Court
Excerpt: "On October 8, 2009 the Florida First District Court of Appeal issued an opinion holding that Florida Retirement System classification as 'special risk' is not necessary to invoke the heart/lung presumption in Section 112.18(1), Florida Statutes. However, almost immediately thereafter the Court ordered the opinion withdrawn (see C&C Newsletter for October 15, 2009, Item 2). Now, the Court has released its opinion, correcting some apparent factual inaccuracies, but coming to the same conclusion. An analysis of the more recent opinion follows. Crystal sought review of an order from the State Retirement Commission, which oversees the Florida Retirement System, denying his claim for disability retirement. He claimed that his total and permanent disability due to hypertension was presumed to be by accident suffered in-line-of-duty under Section 112.18(1), Florida Statutes." (Cypen & Cypen)
Disability, Earnings, and Divorce
Excerpt: "This study examines the effect of work-limiting disabilities on the likelihood of divorce. Theoretically, the effect depends on the disability hazard at the time of onset and the impact of disability on marital value. The theory therefore implies, based on a set of empirically supported premises, that the effect of disability on divorce should decrease with age, increase with education, and increase with disability severity. Data from the Survey of Income and Program Participation support these predictions. The effect of a work-preventing disability is greatest among young, educated males, increasing the divorce hazard by 13.3 percentage points." (Center for Retirement Research at Boston College)
[Guidance Overview] ERISA Plan Documents Time Limitations Are Enforceable
Excerpt: "In two separate cases, U.S. circuit courts buttressed a plan's right to invoke a time limit on lawsuits over benefit denials, by refusing to accept plaintiff arguments that the plans confused them about the starting point of the time limits. In one of the cases . . ., the court adopted the limit from state law (because presumably the plan document lacked one). In the other case, the limit was housed in an ERISA plan document, thereby preempting state law. An increasing number of circuit courts hold that reasonable time limitations in ERISA plan documents are enforceable. In a similar case, Scharff v. Raytheon, 2009 WL 2871229 (9th Cir., Sept. 9, 2009), the 9th U.S. Circuit Court of Appeals enforced an employer's one-year limit on worker lawsuits over benefit denials." (Passion for Subro)
Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement
Excerpt: "A patchwork of public programs -- primarily Social Security Disability Insurance (DI), workers' compensation, Supplemental Security Income (SSI), and veterans' benefits -- provides income supports to people unable to work. Yet, questions persist about the effectiveness of these programs. This report examines the economic consequences of disability for a sample of Americans observed from age 51 to 64. The results underscore the precarious financial state for most people approaching traditional retirement age with disabilities." (Center for Retirement Research at Boston College)
[Guidance Overview] ERISA Can Govern Individual Disability Insurance Policies in an Employment Setting
Excerpt: "A recent case decided in Tennessee serves as a reminder that an insurance arrangement does not have to be group insurance in order for ERISA to apply. In Alexander v. Provident Life and Accident Insurance Co. . . . (E.D. Tenn. Oct. 16, 2009), the court held that individual disability insurance contracts for physician employees constituted an ERISA plan." (Poyner Spruill)
[Guidance Overview] Seventh Circuit Holds Disability Benefits Claim Incompatible With ADA Claims
Excerpt: "In Butler v. Round Lake, the Seventh Circuit addresses the tension between claiming disability benefits and asserting a claim under the Americans With Disabilities Act. Invoking the doctrine of judicial estoppel, the Court holds that the disability claim barred the ADA claim. The opinion highlights the minefield through which counsel must navigate to hold onto claims which, on many facts, will simply be mutually exclusive - as was the case here." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Insurer May Consider Relevant Nonmedical Information in Deciding Disability Claim, According to Court
Excerpt: "EBIA Comment: As this case illustrates, it is not necessarily an abuse of discretion for a plan decisionmaker deciding a disability claim to provide its consulting physicians with nonmedical information about a claimant's relevant employment history (provided the plan gives the decisionmaker wide discretion in the types of evidence it may consider). Furthermore, a determination that a claimant satisfies the SSA's standard for disability benefits does not mean the claimant is automatically entitled to benefits under an ERISA plan. But although an ERISA plan administrator is not bound by an SSA disability determination when reviewing a claim for benefits under an ERISA plan, some courts have concluded that a plan's failure to consider an SSA determination is a factor in reviewing a claim denial." (Employee Benefits Institute of America)
[Guidance Overview] First Circuit Finds Plan Language Adequate for Delegation of ERISA Fiduciary's Authority
Excerpt: "Section 1105(c)(1)(B) of ERISA (29 U.S.C. 1105(c)(1)(B)) states that '[t]he instrument under which a plan is maintained may expressly provide for procedures . . . for named fiduciaries to designate persons other than named fiduciaries to carry out fiduciary responsibilities (other than trustee responsibilities) under the plan.' This First Circuit opinion examines the nature of the delegation process and provides guidance on the requirements necessary for an effective delegation of fiduciary authority. The issue is important since an ineffective delegation may lead to a benefit decision by a person or entity that has no claim to deferential judicial review." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Ninth Circuit on Disclosure of Contractual Time Limitations for Commencing Benefits Lawsuits (PDF)
Excerpt: "The Ninth Circuit Court of Appeals recently held that a one-year deadline to file a benefits claims lawsuit contained in a Summary Plan Description ('SPD') could be enforced against a participant despite the participant's argument that the one year deadline was: not placed in the proper section of the SPD and in a sufficiently conspicuous manner; and never conveyed by the plan's administrator in its claim denial letters." (Trucker Huss)
[Guidance Overview] ERISA Section 510: The Setting Is Ripe For Claims
Excerpt: "With layoffs continuing into the second half of the year, the setting is ripe for an increase in claims by employees who believe their discharge was motivated by their employers' desire to reduce or avoid benefit plan expenses. And section 510 claims are not necessarily made in a vacuum. They can come as part of a general wrongful discharge claim, age discrimination claim, or a whistleblower action where the employee also alleges the employer attempted to interfere with ERISA-protected rights." (Chang Rutherford & Long)
New Oversight Has Not Cut Approvals of L.I.R.R. Disability Claims
Excerpt: "A federal retirement agency approved nearly 100 percent of disability claims filed by workers for the Long Island Rail Road even after enacting changes meant to address chronic abuse of the public benefits system, a government review has found. The agency, the Railroad Retirement Board, which is the equivalent of Social Security for railroad workers, said last October that it would use greater oversight to examine claims filed by L.I.R.R. employees after reports in The New York Times that virtually every career L.I.R.R. employee applied for and received disability payments from the federal government. [Published October 8, 2009.]" (The New York Times; free registration required)
[Guidance Overview] SPD Limit on Court Challenges Was Clearly Enough Displayed, 9th Circuit Rules
Excerpt: "An employer's inclusion of a one-year limit on worker lawsuits over disability benefit denials in its summary plan description (SPD) was reasonable, a federal appeals court ruled. The 9th U.S. Circuit of Appeals also chose not to apply the California regulation requiring that insurers explicitly inform covered individuals about statutes of limitations. There was no need to bring in the California rules because ERISA already contains -- and the plan followed -- broad and detailed disclosure rules to protect plan beneficiaries, the court decided in Scharff v. Raytheon, 2009 WL 2871229 (9th Cir., Sept. 9, 2009)." (Thompson Publishing Group, Inc.)
[Guidance Overview] Broad Scope of 'Disability' Reflected under New ADA Regulations
Excerpt: "The ADA Amendments Act of 2008 amended the Americans with Disabilities Act (ADA) effective January 1, 2009, to expand the definition of 'disability' to include certain impairments and to reverse certain Supreme Court interpretations (and EEOC regulations) that had narrowed the definition. As a result, the determination of whether an individual has a disability is expected to require less analysis, and to result in more individuals being able to demonstrate that they have a disability for ADA purposes. The EEOC observed that this new definition will allow far more cases to focus on whether discrimination actually occurred ? rather than whether the individual was able to demonstrate he or she met the definition of disability." (Deloitte via BenefitsLink.com)
[Guidance Overview] Tenth Circuit Notes Circuit Split on Contractual Limitations Periods
Excerpt: "ERISA does not contain a limitations provision for private enforcement actions under 29 U.S.C. ? 1132. Thus, we generally 'apply the most closely analogous statute of limitations under state law.' 'Choosing which state statute to borrow is unnecessary, however, where the parties have contractually agreed upon a limitations period.' Salisbury v. Hartford Life & Accident Ins. Co. (1oth Cir.) (9/30/2009) (internal citations omitted) The Tenth Circuit has rendered a decision resoundingly affirming the validity of an ERISA plan's contractual limitations period in an opinion that highlights a circuit split on the issue." (Roy Harmon III via Health Plan Law)
National Compensation Survey: Employee Benefits in the United States, March 2009
Includes updated (March 2009) tables on Retirement benefits; Health care benefits; Life, short-term, and long-term disability insurance benefits; Holiday, vacation, sick, and other leave benefits; Other benefits. (Bureau of Labor Statistics, U.S. Department of Labor)
[Guidance Overview] EEOC Expands ADA's Definition of 'Disability' (PDF)
4 pages. Excerpt: "On September 23, 2009, the EEOC published in the Federal Register a long-awaited Notice of Proposed Rulemaking (NPR)3 seeking to implement the ADAAA. The new proposed definition of 'disability' incorporates many medical impairments. The changes apply to both the ADA and the Rehabilitation Act (covering Federal employees)." (Alston+Bird)
[Official Guidance] From EBSA: 45 Frequently Asked Questions About the EFAST2 All-Electronic Filing System
Excerpt: "I heard that I will have to start filing the annual return/report (Form 5500 or Form 5500-SF) electronically. Can you tell me if that's true and when I would need to start? . . . How can I file my timely plan year 2008 annual return/report if it is due after January 1, 2010? . . . Short plan year 2009 annual returns/reports (Form 5500 or Form 5500-SF) may be due before EFAST2 can receive them in January 2010. How do I file these? . . . When can I register for EFAST2 electronic credentials to sign a Form 5500 or Form 5500-SF?" (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview] EEOC Issues Proposed ADA Regulations and Other Guidance About Disabilities, Major Life Activities, Impairments and More
Excerpt: "The basic ADA definition of disability was retained -- as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment -- but the ADA Amendments Act changed the way that these statutory terms should be interpreted. The EEOC has now issued proposed regulations and other interpretive guidance to reinstate a broader scope of protection under the ADA and make it easier for individuals under the ADA to establish that they have a disability." (Employee Benefits Institute of America)
[Guidance Overview] Summary Plan Description and Denial Letters Adequately Disclosed One-Year Limitations Period
Excerpt: "EBIA Comment: The courts have varied on what kind of notice, if any, must be given of plan-imposed limitations periods. . . . Although the case law is mixed on this question, plans may be able to avoid costly litigation by prominently including the limitations in a plan's SPD as well as its notice of benefits determination on review." (Employee Benefits Institute of America)
[Guidance Overview] A Plan Administrator/Sponsor's Guide to Diminishing the Impact of a Conflict of Interest (PDF)
3 pages. Excerpt: "In light of the Supreme Court's decision last year in Metropolitan Life Insurance Co. v. Glenn (MetLife), claims administrators who are part of the entities that also provide funding for plan benefits are well-advised to establish internal safeguards to reduce the impact of a perceived conflict of interest. If structured properly, such safeguards could help preserve the right to deferential review of claims decisions. In this article, Susan Relland describes steps that companies can take to implement such internal safeguards." (Employee Benefit Plan Review via Miller & Chevalier Chartered)
[Opinion] Structural Conflicts of Interest After Metropolitan Life
Excerpt: "Variety is the spice of life, I guess, and has long been the norm when it comes to the handling by different circuits of the same issues arising under ERISA. Although Metropolitan Life appears to have standardized those rules with regard to one issue - namely the effect of 'structural conflict of interests' - to some degree, it hasn't come close to putting the treatment of that issue on the same page in every circuit." (Stephen Rosenberg of The McCormack Firm, LLC)
[Guidance Overview] Seventh Circuit Finds Conflict Factor Insignificant in Judicial Review
Excerpt: "The SeventhCircuit post-Glenn opinions are a mosaic with no discernable theme. Rather than examination all factors in 'combination', several courts have emphasized the 'tie breaker' reference in Glenn, and only view a conflict of interest as significant in close cases. Fischer v. Liberty Life Assur. Co., 2009 U.S. App. LEXIS 17226 (7th Cir.) (August 4, 2009) is an example of that approach. Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856 (7th Cir. Ill. 2009) is another." (Roy Harmon III via Health Plan Law)
[Guidance Overview] File Review of Medical Evidence After Metlife v. Glenn - A New Preference for Treating Physician Opinions?
Excerpt: "The Ninth Circuit has aligned itself with the Sixth Circuit in its skepticism of file review of disability claim denials. Montour v. Hartford offers a checklist of factors for critical evaluation in judicial review of claims decisions by conflicted fiduciaries including a careful look at the decision to prefer the opinion of file reviewers over examining physicians." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Denmark Opinion Influences Narrow Post-Glenn Discovery in Judicial Review
Excerpt: "Denmark v. Liberty Life, No. 05-2877 (1st Cir.) (May 6, 2009) casts a long shadow over post-Glenn discovery efforts in the First Circuit as this recent district court opinion illustrates. . . . The Court states that a 'very good reason' must be shown by the plaintiff for allowing discovery. This hurdle is described as a 'threshold showing' that: the denial of benefits was improperly influenced by the administrator's [structural] conflict of interest.' This requirement may be viewed as circular since, without discovery, there is some doubt that the showing can be met." (Roy Harmon III via Health Plan Law)
Work Disability, Work, and Justification Bias in Europe and the U.S.
Excerpt: "To analyze the effect of health on work, many studies use a simple self-assessed health measure based upon a question such as 'do you have an impairment or health problem limiting the kind or amount of work you can do?' A possible drawback of such a measure is the possibility that different groups of respondents may use different response scales. This is commonly referred to as 'differential item functioning' (DIF)." (University of Michigan Retirement Research Center)
[Guidance Overview] Ninth Circuit Rejects Application of 'Reasonable Expectations' Doctrine to Self Funded ERISA Plans
Excerpt: "This Ninth Circuit decision is in line with the other courts of appeal that have faced the question of 'contractual' limitations periods. The Raytheon disability plans provided for a one-year statute of limitations. Having filed her claim outside this period, the plaintiff sought refuge in the doctrine of 'reasonable expectations' and argument that California regulatory requirements should be incorporated into the federal common law." (Roy Harmon III via Health Plan Law)
[Guidance Overview] SPD Passes 9th Circuit Scrutiny in Benefits Denial Case
Excerpt: "An employer's decision to include in the disability chapter of its summary plan description (SPD) a mention of a one-year limit on worker lawsuits over disability benefit denials meets federal benefits law, a court ruled. The 9th U.S. Circuit of Appeals rendered that decision in a suit by plaintiff Donna Scharff against Raytheon Co., in which Scharff alleged the lawsuit time limit notation should have been placed in the SPD's administrative chapter and should have been more conspicuously displayed. The appellate panel decided that the SPD met the requirements of Employee Retirement Income Security Act's (ERISA) Section 102 in explaining how a plan participant could be disqualified or ruled benefits ineligible in a way that can be understood." (PLANSPONSOR.com; free registration required)
ERISA Benefits Litigation Article Discusses Effect of Met Life v. Glenn
Excerpt: "Mark Stephenson, Nelson Levine de Luca & Horst, recent published an article entitled ' ERISA Benefits Litigation ? A Tilting Playing Field' in the Legal Intelligencer. The article notes the varied approaches taken in judicial review post-Glenn and the concommitant burdens placed upon ERISA plan sponsors and fiduciaries." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Sixth Circuit Ruling May Signal Prospects for Accelerating Limitations Period on Benefits Claims (PDF)
Pages 4- of 8 pages. Excerpt: "In Rice v. Jefferson Pilot Financial Ins. Co., 2009 WL 2581298 (6th Cir. Aug. 24, 2009), the Sixth Circuit concluded that plaintiff's long-term disability benefit claim was barred by the plan's three-year limitations period and that plaintiff's claim accrued, as the plan provided, when proof of loss was required to be provided." (Proskauer Rose LLP)
[Guidance Overview] Employee's Letter in Response to Insurer's Decision to Close Claim Was Not an Appeal
Excerpt: "EBIA Comment: Although the claims regulations impose specific deadlines for appeal decisions, they provide no guidance on what is actually considered an appeal. As in this case, that determination is left to the courts, which may apply varying (and sometimes difficult to reconcile) standards for assessing when an appeal is initiated. In another case for example, the court held that a letter from a participant's attorney stating, among other things, that the participant 'wishes to appeal' a benefit denial should have been treated as an appeal." (Employee Benefits Institute of America)
[Guidance Overview] Two Seventh Circuit Disability Cases Illustrate Glenn Conflict of Interest Analysis
Excerpt: "EBIA Comment: These cases hinge on the idea that a conflict of interest acts, as the Glenn case states, 'as a tiebreaker when the other factors are closely balanced.' When the record provides sufficient support for a decision (as in Fischer), the existence of a conflict becomes essentially irrelevant. But when the record presents a closer case (as in Raybourne), the conflict must be more carefully considered and may tip the balance." (Employee Benefits Institute of America)
[Official Guidance] DOL Begins to Approve EFAST2 Software Vendors for 2009 Form 5500
ftwilliam.com is the first vendor to obtain EFAST2 approval, for the 2009 Form 5500. Excerpt: "EBSA will list on this Web site the private sector companies who have developed software that has been approved for use in transmitting and/or completing the Form 5500 and Form 5500-SF under the EFAST2 system. . . . Information on these products and their vendors' is provided for the convenience of filers. The U.S. Department of Labor does not endorse or warrant these companies, their products, or their services." (Employee Benefits Security Administration, U.S. Department of Labor)
[Guidance Overview] Seventh Circuit Rejects 'Multi-Factored' Approach in Evaluating Conflict in Vesting Dispute
Excerpt: "This recent opinion out of the Seventh Circuit answers a question over the termination of disability benefits through plan amendment in the context of a larger question over what deference should be paid to the plan interpretation of a conflicted fiduciary." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Insurer Improperly Denied Claim for LTD Benefits Based on Plan's Preexisting Condition Exclusion
Excerpt: "An insurance company improperly applied the preexisting condition exclusion in a long term disability plan in denying a participant's claim for benefits. This was the decision of the Sixth Circuit U.S. Court of Appeals in Bloom v. Hartford Life and Accident Insurance Company (No. 07-6374)." (Wolters Kluwer)
[Guidance Overview] SPD Disclaimer Does Not Cure Conflict in Plan Documents Regarding Grant of Discretionary Authority
Excerpt: "EBIA Comment: Because ERISA requires full disclosure in the SPD of any material terms that could affect benefits, most courts do not give weight to SPD disclaimers. Note that the bottom line in this case -- that there was no unambiguous grant of discretionary authority -- could have a tremendous impact on the outcome of this litigation. More than one court, after applying the less deferential de novo standard of review, has overturned a benefit denial only to observe that the result would have been different if the arbitrary and capricious standard had been applied." (Employee Benefits Institute of America)
[Guidance Overview] No Payment for Employee Who Died Before Application Was Received
Excerpt: "The 3rd U.S. Circuit Court of Appeals has ruled that a plan administrator did not abuse its discretion in denying a disability retirement benefit payment to an employee who died before his payment application was received. In its opinion, the court said the plan explicitly granted the Committee the authority to create a requirement for receipt of the application before death and the requirement is not an unreasonable interpretation of the plan. '[T]he Committee has consistently applied the receipt requirement, it does not conflict with the Plan, and it is consistent with both the Plan and ERISA's statutory provisions,' the court said." (PLANSPONSOR.com; free registration required)
[Guidance Overview] Seventh Circuit Hands Down Another Post-Glenn 'Tie Breaker' Decision
Excerpt: "Rather than examination all factors in 'combination', several courts have emphasized the 'tie breaker' reference in Glenn, and only view a conflict of interest as significant in close cases. The Sixth Circuit is a good exemplar the 'combination' approach wherein the Court looks at each action of the conflicted fiduciary in terms of whether the fiduciary's conduct, taken as a whole, reflects evidence of bias. The recent Seventh Circuit opinion in Fischer provides an example of the 'tie breaker' approach." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Third Circuit Takes Expansive View of Preexisting Condition Exclusion
Excerpt: "Doroshow was an employee of the CVS Corporation and participated in its Long Term Disability Income Insurance Plan, a group benefit plan issued by Hartford. CVS 'delegated sole discretionary authority to Hartford ? to determine [the participant's] eligibility for benefits and to interpret the terms and provisions of the plan and any policy issued in connection with it.'" (Roy Harmon III via Health Plan Law)
[Guidance Overview] ERISA Litigation Newsletter for August 2009 from Proskauer Rose (PDF)
Articles include Bucking the Trend, District Court Finds That Utah's Attempt to Bar Discretionary Clauses Is Preempted By ERISA; When Discretion Is Gone... Is There Full Blown Federal Discovery?; Are Unpaid Employer Contributions to an ERISA Plan 'Plan Assets'? Courts and Government Weigh In; Defendants Acquire Favorable Judgments in Latest Round of Stock Drop Cases Involving Subprime and Stock Option Claims; Seventh Circuit Rules That 'Normal Retirement Age' Need Not Be Defined By Reference To A Specific Age. (Proskauer Rose)
[Guidance Overview] Court Finds That LTD Plan Subject to ERISA and Addresses Various Rules Regarding Disability Claim Decisionmaking
Excerpt: "EBIA Comment: Disability benefit disputes comprise a significant number of reported decisions under ERISA. This case caught our eye not only because of the voluntary plans issue but also because of the several court-made rules it discusses affecting the use of medical experts in the disposition of disability claims." (Employee Benefits Institute of America)
[Guidance Overview] Second Circuit Warns Plan Administrators Making Disability Determinations
Excerpt: "Disability determinations can occur in all types of benefit plans, including qualified retirement plans, and therefore the significance of the case should be analyzed for its impact on other types of ERISA plans as well." (ERISA Fiduciary Guidebook)
[Guidance Overview] District Court Requires Formal Inquiry Before ERISA Section 510 Retaliation Claim
Excerpt: "I disagree with the outcome of this case, especially given the procedural posture of a motion to dismiss. ERISA's primary purpose is to protect the employee benefits of employees. That protection includes protecting employees when they complain about how their benefits are being administered. I agree with the Ninth Circuit's take on the issue of internal complaints under ERISA . . . ." (Workplace Prof Blog)
[Guidance Overview] Sixth Circuit Rules That a Program of Insured Benefits to Which an Employer Pays the Premiums for at Least One Employee Is Subject to ERISA As to All Employees
Excerpt: "In Helfman v. GE Group Life Assurance Company, No. 08-2168 (6th Cir. 2009), the Court faced the question of whether a program, which consisted of two insurance policies that paid long-term disability benefits to employees (the 'Program'), was subject to ERISA. The plaintiff did not want the Program to be subject to ERISA, because he was bringing a state law claim against the insurers under the Program which ERISA would preempt. The case centered on whether the Program was exempt from ERISA under the 'safe harbor' found in the Department of Labor's regulations at 29 C.F.R. ? 2510.3-1(j). For the safe harbor to apply to the Program, among other requirements of the regulations, no premiums may be paid to the Program by an employer (the 'No Premium Condition')." (Stanley D. Baum of Eaton & Van Winkle)
[Guidance Overview] ERISA-Seventh Circuit Holds That Letters Denying a Claim for Disability Benefits Without Refuting Contrary Evidence Were Not Sufficient to Support Summary Judgment
Excerpt: "In Love v. National City Corporation, No. 08-1722 (7th Cir. 2009), the plaintiff, Nancy Love, had worked for National City Corporation for twenty years before leaving due to health problems. After her physician diagnosed her with multiple sclerosis, Love applied for and received short term disability benefits--and subsequently long-term disability benefits--through National City's Welfare Benefits Plan ('the Plan'). However, three years after Love began receiving disability benefits, the Plan administrator terminated her benefits, by a letter stating that she no longer fit the Plan's definition of 'disabled.' To be 'disabled' under this definition, an employee can no longer perform any job. Love appealed the benefits-termination decision and the Plan denied her appeal, again by letter. Love then sued the Plan under ERISA, alleging that her disability benefits were terminated without sufficient explanation or medical support." (Stanley D. Baum of Eaton & Van Winkle)
[Guidance Overview] Sixth Circuit Opines on ERISA 'Safe Harbor' Exemption
Excerpt: "In general, in order to fall under this safe harbor (and fall out of ERISA), one of the requirements of the safe harbor is that no contributions be made by the employer, i.e. if the employer is making contributions to the plan, then it is an ERISA-covered plan. Thus, because many disability plans are funded either partially or fully by the employer, they are covered by ERISA. In the recent Sixth Circuit case of Helfman v. GE Group Life Assurance Company, et al., a participant had challenged the district court's decision that the plan was covered by ERISA because the participant sought to get out from under the ERISA banner of deference afforded the plan administrator's decision. The district court had ruled that the plan administrator had not abused its discretion and upheld the insurer's termination of the participant's benefits." (ERISA Fiduciary Guidebook)
[Guidance Overview] Court Enforces Plan-Imposed Limitations Period for Filing Benefit Lawsuit
Excerpt: "EBIA Comment: Limitations periods like this one are common in both insured plans and self-insured plans. Not all courts have enforced such provisions; in addition to the Fourth Circuit, the Ninth Circuit has declined to do so. Also, factual differences between cases can change the result, including the clarity of the language in question and whether it was clearly communicated to the claimant (an issue apparently not in dispute here). Nevertheless, the courts will generally enforce reasonable plan-imposed limitations periods, leaving three lessons to be drawn from the cases. First, plans should consider imposing their own limitations periods given that the otherwise applicable periods vary from state to state and can be quite long. Second, care must be taken to draft the provisions clearly. Third, as a best practice, any limits should be explained both in the plan SPD and in claim denial notices. " (Employee Benefits Institute of America)
[Guidance Overview] Does MetLife v. Glenn's 'Structural Conflict' Holding Apply When Employee Benefits Are Funded from a Trust? (PDF)
3 pages. Excerpt: "Subsequent to the Supreme Court's decision in MetLife v. Glenn, 128 S.Ct. 2343 (2008), federal courts around the country have attempted to reconcile Glenn's holding ? that a structural conflict of interest exists when an employer 'both funds the [employee benefit] plan and evaluates the claims' ? with prior circuit court precedent holding that no conflict of interest exists when employee benefits are funded from a trust. With the Fifth Circuit's recent decision in Holland v. International Paper Company Retirement Plan, ___ F.3d ___, 2009 WL 2050688, *5 (5th Cir., July 16, 2009), a circuit split now exists that may soon percolate up to the Supreme Court. Thus far, five circuits have weighed in on this issue: the Third, Fourth, Fifth, Ninth and Eleventh." (Alston & Bird LLP)
[Guidance Overview] Fifth Circuit Applies MetLife v. Glenn to Trust-Funded Disability Plan Benefit Denial
Excerpt: "Holland v. International Paper, No. 08-30967 (5th Cir.) (July 16, 2009) is the most recent Fifth Circuit assessment of the Supreme Court decision in Glenn on the effect of a structural conflict of interest on judicial review of a benefit claim denial. The case is interesting for several additional points, including the effect of trust funding on a structural conflict of interest, other factors that may mitigate a conflict, and the relevance of prior precedent employing the Fifth Circuit's 'two step' analysis and 'sliding scale' approach." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Benefit Payments Made from Employer's Zero-Balance Account Did Not Cause STD Plan to Be an ERISA Plan
Excerpt: "EBIA Comment: Certain employer-provided benefits that might technically fit the definition of an ERISA employee welfare benefit plan have been specifically excepted from ERISA by DOL regulation. Foremost among these regulatory safe harbors are those for certain 'payroll practices.' But not all payroll practices are covered by the safe harbor. The exemption for STD benefits only applies to the payment of an employee's normal compensation out of the employer's general assets. While a separate account in a TPA's name may create plan assets, this case illustrates that a separate employer account used to administer benefits generally does not transform employer general assets into ERISA plan assets." (Employee Benefits Institute of America)
[Guidance Overview] Termination of Plan Coverage Was an Adverse Benefit Determination
Excerpt: "EBIA Comment: The plans' ambiguous terms caused unexpected and unwelcome results for this employer, reminding us once again of the importance of clear plan language, including eligibility requirements. As to the court's analysis on the issue of 'adverse benefit determination,' we note that the definition of this term in the claims regulations provides that a denial or termination of a benefit based solely on ineligibility qualifies as an adverse benefit determination that triggers all the applicable claims procedure requirements. Based on the DOL's position, we don't think the definition of adverse benefit determination under the claims regulations includes a mere determination of eligibility that does not relate to a specific claim for benefits (as in this case). Thus, in our view, this court reached the wrong result by mixing up termination of a specific benefit with generalized termination of coverage . . . ." (Employee Benefits Institute of America)
[Guidance Overview] EEOC Staff Members Provide Informal Views on Health Risk Assessments, ADA, and Other Benefit-Related Issues
Excerpt: "EBIA Comment: While the report provides helpful insight regarding the issues addressed, it should be remembered that the EEOC staff members' responses reflect their unofficial, individual views. EEOC guidance would be particularly helpful regarding the design and use of health risk assessments -- to date, the EEOC has not taken a position as to the level of incentives that would be considered voluntary for ADA purposes in connection with the completion of an assessment." (Employee Benefits Institute of America)
[Guidance Overview] Second Circuit Upholds Three-Year Limitation Period in Plan Document
Excerpt: "In an era when lawsuits appear to be targeting fiduciaries, one of the areas that is becoming more important for fiduciaries is the practice of implementing steps to reduce litigation risk. One such practice which has been challenged and upheld in the courts is the inclusion of a limitation period in the documents governing the plan. The limitation period provision limits the period of time during which a participant or beneficiary can bring suit. The idea behind such limitation periods is to protect fiduciaries so that they are not subjected to a risk of lawsuit any longer than they have to be under the law." (ERISA Fiduciary Guidebook)
[Guidance Overview] Court Requires Production of Claims Handling Manuals Used in Benefits Denial
Excerpt: "EBIA Comment: As this court acknowledged, there is disagreement in the reported decisions regarding how to read the relevant document rule, and some courts might not require production of claims handling guidelines as a general rule. . . . Given the lack of clarity in this area, employers, insurers, and service providers offering claims administration should be prepared to provide copies of these types of generally applicable documents when required. Note that a separate ERISA provision requires that certain documents be furnished to participants and beneficiaries on written request. This requirement, which includes 'other instruments under which the plan is established or operated,' may also require disclosure of a claims administrator's internal rules and guidelines (though here, too, the cases are mixed)." (Employee Benefits Institute of America)
[Guidance Overview] First Circuit Requires Abstention Where State Proceedings Have Begun
Excerpt: "Colonial v. Medley addresses when it is appropropriate for a district court to abstain from jurisdiction over a case in which state court proceedings have been instituted on facts which leave the question of preemption in doubt. . . . The plaintiff, Cauldron, had filed a claim against a short term di[s]ability carrier and also filed a charge with the Massachusetts Commission Against Discrimination ('MCAD'). The central issue was a provision in the policy that excluded psychiatric or psychological conditions." (Roy Harmon III via Health Plan Law)
[Guidance Overview] Notice of Denial on Appeal Faxed to Participant's Attorney Met Delivery Requirements in DOL Regulations
Excerpt: "EBIA Comment: ERISA-required notices, such as the notice of denial on appeal in this case, must be furnished in a way reasonably calculated to ensure actual receipt. The DOL regulations do not require a plan administrator to prove actual receipt, just that the delivery method utilized is likely to result in the participant's receipt of the notice. The regulations provide several examples of acceptable delivery methods, including mail and in-hand delivery. But these examples are 'safe harbors,' and are not intended to be an exhaustive list of acceptable delivery methods." (Employee Benefits Institute of America)
[Guidance Overview] 'Independent' May Replace 'de Novo' to Describe Court's Role
Excerpt: "In a June 29 Seventh Circuit opinion, Judge Frank H. Easterbrook, writing for the court, said that it is time to scrap the Latin phrase 'de novo. For now, 'de novo review' has only been replaced with 'independent decisionmaking,' when a district court engages in its own factfinding. But the opinion could lead to abandonment of 'de novo review' altogether. Paul M. Krolnik brought suit under ERISA against The Prudential Insurance Company of America, after it terminated his long-term disability payments. At issue was whether Krolnik's ability to work is entirely physical, or mental. The district court barred discovery on medical questions, and granted summary judgment in favor of Prudential based on the administrative record. Krolnik appealed, and the Seventh Circuit reversed. The court began by explaining that 'de novo review' is a misleading phrase for describing a district court's role." (Wisconsin Law Journal)
[Guidance Overview] Insurer Properly Denied Claim for LTD Benefits Where Beneficiary Was Not 'Disabled' Under the Plan
Excerpt: "An insurance company did not abuse its discretion when it denied a claim for long term disability benefits filed by a beneficiary who did not meet the LTD plan's definition of 'disabled.' This was the ruling of the Third Circuit U.S. Court of Appeals in Taylor v. Union Security Insurance Company and Titus & McConomy Long Term Disability Benefits Plan (No. 08-3692)." (Wolters Kluwer)
[Guidance Overview] Discretionary Clauses in Disability Insurance Policies in California and Their Impact on ERISA Plans (PDF)
At pages 3-6 of 9-page newsletter. Excerpt: "Since February 2004, the California Department of Insurance ('DOI') has prohibited insurance companies from including in their insurance policies 'discretionary clauses' reserving discretionary authority to the insurer as the benefits claims decision-maker. . . . This article provides an update on the effect of the DOI's prohibition of discretionary clauses on the standard of review for ERISA benefit claims litigation. . . . [T]he state's policy against discretionary clauses is currently limited to disability insurance policies." (Trucker Huss)
[Guidance Overview] First Circuit Refines Its Standard of Review Analysis Based on Supreme Court's Glenn Decision
Excerpt: "EBIA Comment: While the court's modest refinements of the First Circuit's standard of review analysis are significant, this case is also interesting for its suggestion that, under Glenn, courts must inquire into the steps a decisionmaker has taken to mitigate the effects of a structural conflict. If plan decisionmakers understand that the courts will be looking for that information, they may be more likely to regularly document the steps they have taken to prevent or mitigate conflicts. And if conflicts are not fully revealed by the administrative record, participants may be more likely to seek discovery about them, although the permissible scope of such discovery remains unsettled." (Employee Benefits Institute of America)
[Guidance Overview] 1st Circuit Refines Benefits Denial Case Law
Excerpt: "After tweaking their standard for how federal judges should handle employee benefits denial cases involving a conflicted plan administrator, federal appellate judges have ordered more hearings in just such a case. The 1st U.S. Circuit Court of Appeals sent back to a lower court Denmark v. Liberty Life Assurance Co. of Boston with instructions to gather more evidence on the issue of why disability benefits were denied in a case that has made several trips through the federal judicial system. In Denmark the lower court found the denial of long-term disability was supported by substantial evidence and within the plan administrator's discretion, and ruled for the insurance company." (PLANSPONSOR.com; free registration required)
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