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Discretionary Clauses in ERISA Health and Disability Plans: Are They Still Viable? (PDF)

"As of 2015 ... nearly 25 states either have or are in the process of banning discretionary clauses in insurance policies subject to ERISA.... The Firestone decision made it clear that in the absence of an effective discretionary clause, a court deciding a benefit disputes utilizes the de novo standard of adjudication that favors neither party.... Plan insurers ... are expected to continue their opposition to the laws and argue that states run afoul of ERISA when they attempt to regulate the language in ERISA plans; however, the Supreme Court's refusal to hear an appeal from the Morrison ruling suggests that such efforts are unlikely to succeed."

New ERISA Disability Rules Look to Level Playing Field for All

"Besides requiring an explanation for disagreement with treating doctor opinions, the regulations speak to situations where the Social Security Administration issues an award of disability benefits while the benefit plan reaches a contrary determination. Although no deference to a favorable Social Security determination is required, the regulations obligate benefit plans to provide "a more detailed justification [for reaching a different conclusion] ... in a case where the SSA definitions were functionally equivalent to those under the plan."

DOL Issues Final Regs for Claims Procedure for Plans Providing Disability Benefits

"The keystone of the regulations ... is the requirement to allow the claimant to have the last word in the claims process and thus have the right to respond to adverse information developed during the claim appeal process.... The regulations are also intended to permit claimants to submit supporting evidence regardless of whether such evidence meets 'courtroom evidentiary standards.' "

Discretion and Preemption: Unraveling ERISA, State Insurance Law

"While the California federal court ... acknowledged the existence of the deemer clause, the court still found the California ban on discretionary clauses applicable based on a finding that '[S]ection 10110.6 applies to contracts.' But that finding directly conflicts with ERISA's preemption provision, which has federalized garden-variety disputes over health and disability benefits and removed claims relating to such benefits from the ambit of breach-of-contract actions even where such benefits are provided though insurance." [Thomas v. Aetna Life Ins. Co., No. 15-1112 (E.D. Cal. Aug. 15, 2016)]

Health Insurer's Three-Word Denial Brings Cold Shoulder from 2nd Circuit

"Although the court persuasively rejected the 'substantial compliance' doctrine, this ruling will undoubtedly trigger further litigation as to the meaning of 'inadvertent and harmless' noncompliance. The court could also have gone much further because the harm here is one that is typical (and frustrating) in health care -- summary denials lacking any explanation.... Obtaining a comprehensible explanation for a denial so that it can be effectively challenged is hard enough, but obtaining the so-called administrative record is often impossible." [Halo v. Yale Health Plan, No. 14-4055 (2d Cir. Apr. 12, 2016)]

ERISA Does Not Stand for 'Equitable Relief In Swollen Assets'

"The court thus rejected all of the respondent's arguments asserting a right to enforce its lien on Montanile's general assets, including its claim that it could enforce its lien under the 'swollen assets doctrine,' which ostensibly allows an equitable recovery from an individual whose assets had swollen due to receipt of the funds claimed to be subject to restitution.... Montanile will afford injured tort claimants greater leverage in negotiating liens, particularly in situations where liability insurance is limited and the claimant's recovery falls far short of make whole relief. Otherwise, overly aggressive demands for full reimbursement will backfire on the benefit plans because putative plaintiffs will forgo seeking recompense for personal injuries if the recovery ends up entirely or mostly in the hands of the health benefit provider."

Pension Obligations vs. Religious Exemptions: Does This Make Sense?

"Contrary to the [Medina v. Catholic Health Initiatives] court's concern that ERISA fiduciary duties may conflict with church doctrine on issues such as social investing, ERISA's rules are neutral and based solely on the intent that employers be held to their promises by imposing fiduciary obligations comparable to Judeo-Christian religious precepts. Favoring religiously affiliated plans over other nonprofit health-care plans thus raises a legitimate question under the establishment clause even if such plans are found to fit within the statutory 'church plan' definition."

State Health Care Database Laws vs. ERISA: Supreme Court to Decide

"The question in this case reviews whether or not states can require health care providers and health care payers to provide claims data and related information to the state's health care database.... [T]his case focuses on whether ERISA preempts the state's health care database law when applied to a third-party administrator of a self-funded plan." [Gobeille v. Liberty Mutual Ins. Co., (2d Cir. Feb. 4, 2014, oral arg. Dec. 2, 2015)]

DOL Proposes New Regs for Disability Benefit Claims

"One of the key additions to the regulations is a requirement giving the claimant the 'last word' in the appeal process.... The regulations require 'automatic' timely disclosure of the new evidence and an opportunity for the claimant to respond before the appeal decision deadline expires; and that if the response triggers another round of point/counterpoint, the claimant must be furnished with new evidence and given an opportunity to respond even if it means tolling the time to decide the appeal until the claimant responds."

District Court: Claim of Intentional Infliction of Emotional Distress is Narrow Enough to Avoid ERISA Preemption

"The governing rule is that so long as the claim could result in relief irrespective of the outcome of the ERISA claim, the plaintiff states a viable cause of action and is able to survive a motion to dismiss. However, if the claim is linked to or intertwined with the underlying ERISA claim such that the success or failure of the claim would depend on a favorable decision on the benefit claim, it will be pre-empted.... Here, the court ... [concluded] that the intentional infliction of emotional distress claim was not preempted. However, if [the participant] had alleged an entitlement to emotional distress damages solely on account of the claim denial or alleged consequential damages on account of a delay in processing his claim, such as asserting an eviction from his home due to the delay, such a claim would easily have been found pre-empted." [Kresich v. Metropolitan Life Ins. Co., No. 15-cv-05801 (N.D. Cal. Apr. 4, 2016)]