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Court of Appeals Upholds Breach of Fiduciary Duty Determination Against Self-Insured Health Plan's TPA
Winston & Strawn LLP Link to more items from this source
May 23, 2014

"The court rejected the argument that [Blue Cross Blue Shield of Michigan (BCBSM)] was not a fiduciary because it simply adhered to contract terms giving it the unilateral right to retain funds as compensation because BCBSM exercised discretion with respect to this right by not imposing such fees uniformly on all self-insured clients. The court also rejected the argument that the funds that were used to pay the disputed fees were Hi-Lex corporate assets and not plan assets subject to ERISA protections. The court noted that under ERISA regulations, employee contributions constitute plan assets as soon as they are segregated from an employer's general assets. With respect to employer contributions, which formed the bulk of the funds provided to BCBSM, the court noted that the assets of a welfare plan generally include any property, tangible and intangible, in which the plan has a beneficial ownership interest." [Hi-Lex Controls v. Blue Cross Blue Shield of Michigan, Nos. 13-1773/1859 (6th Cir. May 14, 2014)]

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