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State Law Claims Against TPA, Stop Loss Insurer Regarding ASA/Policy Language Not Preempted

"ERISA did not preempt state law claims against a third-party administrator (TPA) and stop-loss insurer regarding problems with claims processing, a federal district court in Indiana ruled. The court generally found that the claim processing dispute solely involved interpreting the administrative services agreement (ASA) or the stop-loss policy-- not the ERISA plan. Therefore, no ERISA issues were involved. The case is Analytical Surveys, Inc. v. Intercare Health Plans, Inc."

ASA Calls on Congress to Name DOL Employees Involved with Fiduciary Proposal

"The American Securities Association asked Congress ... to identify DOL staff involved in the fiduciary proposal and to consider recusing them from its finalization, a request that drew condemnation from a former DOL Assistant Secretary."

DOL Drops Appeal in ASA Case

"The district court held that a recommendation to take a rollover from a retirement plan cannot be aggregated with post-rollover advice such that the rollover recommendation satisfies the 'regular basis' prong of the five-part test and vacated a DOL FAQ that concluded otherwise. By conceding this point, DOL has not only put itself in a difficult situation in other related litigation in Texas but has also likely signaled that it recognizes that any further attempts to materially expand the scope of entities and individuals held to a fiduciary standard will either require new legislation or a new regulatory initiative." [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023; stipulation as to voluntary dismissal filed May 16, 2023; 11th Cir. No. 23-11266)]

Proposed Retirement Security Legislation Would Give Every Worker Access to a Retirement Savings Plan

"The American Savings Act would establish a new universal savings account plan -- the American Savings Account [ASA] ... If your employer doesn't already offer a retirement plan, you'll automatically be given your own [ASA]. Initially, your employer will put 3% of your earnings into your account with each paycheck, but you can choose to adjust your contribution to as low as 2% of your income, or as high as $18,000 per year, or to opt out entirely. ASAs will have the same investment options as federal employees get through the TSP plan ... Workers will control their own accounts directly through a website. Contributions to an ASA would be tax-deductible, and participants would be able to rollover any previous IRAs into their ASA or roll their ASA funds into an employer-sponsored 401(k) or 403(b) plan."

The Latest in the 'Regular Basis' of DOL Fiduciary Rule Developments: Federal Court Vacates Certain Provisions Applicable to Rollover Advice

"Along with a September 2022 case in the Southern District of New York, the ASA Decision casts doubt on the DOL's 2020 interpretation of the 1975 Rule ... Additionally noteworthy is the fact that the ASA Decision marks the second vacatur that a Federal court has issued in connection with the DOL's efforts to recraft or interpret the investment advice fiduciary rule codified as the 1975 Rule[.]" [American Securities Association v. DOL, No. 22-0330 (M.D. Fla. Feb. 13, 2023)]

Improper Delegation of Authority Could Cost a Plan its Deferential Standard of Review

"Review vendor contracts and plan documents to ensure that claims administrators have the final decision-making authority -- and do not include provisions allowing the employer (plan sponsor) to override those determinations. If a plan intends to delegate authority to a third party through a contract (such as an ASA), that contract should state that it is part of the plan documents.... [O]nce that document is considered a plan document, it must be disclosed to participants upon their request. Confidentiality provisions in an ASA may preclude such disclosure."

No Breach of Fiduciary Duty for Health Plan TPA That Overpaid Claims for Participant Eligible for ESRD-Based Medicare

"A union's health trust fund sued its TPA, claiming that the TPA breached its fiduciary duties under ERISA and its contractual duties under an administrative services agreement (ASA) by continuing to pay benefits for a participant after he became eligible for Medicare based on end stage renal disease (ESRD).... The court dismissed the claims against the TPA, concluding that it was not the TPA's duty to track participants' Medicare eligibility or applicability of the MSP requirements.... [T]he ASA expressly made the employer responsible for investigating participants' Medicare eligibility status." [Birmingham Plumbers and Steamfitters Local Union No. 91 Health and Welfare Trust Fund v. Blue Cross Blue Shield of Alabama, No. 17-443 (N.D. Ala. Mar. 8, 2018)]

The Gag Clause Quandary for Self-Insured Group Health Plans: New FAQ Guidance

"Considering the guidance in FAQs Part 69, the best approach for plan sponsors ... may be to carefully record their attempts to eliminate prohibited gag clauses from their ASAs. FAQs Part 69 states that this information can be included in the annual gag clause prohibition compliance attestation, and including the information will, hopefully, provide some protection to the plans until TPAs and others are held to account."

District Court: Claims Processor Is Not ERISA Plan Fiduciary

"The court explained that the insurer's permitted actions under the ASA ... were insufficient to confer fiduciary status. According to the court, functions such as 'nondiscretionary administrative functions including the application of rules determining eligibility for participation or benefits, the calculation of benefits, and the processing of claims' do not create fiduciary authority.' " [Shea v. Unum Life Ins. Co, No. 24-10402 (D. Mass. Oct. 28, 2024)]

District Court Finds Health Plan Not Required to Furnish Administrative Service Agreements in Response to ERISA Document Request

"The court commented that while ERISA includes the term 'contract' in its list of documents that must be furnished, this does not include all contracts between a plan and its service providers. It explained that ASAs are not subject to disclosure because they: [1] govern only the relationship between the employer and claims administrator; and [2] do not govern the relationship between plan participants and the employer." [Zavislak v. Netflix, Inc., No. 21-1811 (N.D. Cal. Jan. 31, 2024)]