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OBBBA: Impact of the Exchange Modifications and Employee Benefits Updates

"[E]mployers will need to brace for the potential of increased enrollment due to various provisions of the Act which have been predicted to decrease Exchange enrollment. With more employees turning to employer sponsored plans, plan sponsors will be vulnerable to increases in premium costs, claims costs, penalty exposure, and compliance risk.... The Act includes a few other modest employee benefits changes which may further help to fortify non-health employer offerings and attract employees amidst the flux in the health benefits space."

ERISA Litigation Highlights: The Concept of 'Reasonableness'

"One court rejected the parties' proffered definitions of the term 'working' and instead determined that a dictionary definition was reasonable. Two cases reflect courts considering whether it is reasonable for an insurer to award or deny LTD benefits based largely on subjective evidence, and due to differing facts come to different conclusions. Another court considered the reasonableness of a class action settlement related to dependent child life insurance policies. And another court considered whether an insurer acted reasonably in terminating LTD benefits in the face of a structural conflict of interest."

Correcting Liquidity, Valuation, or Transfer Problems with OTC-Traded Stocks in Retirement Plans to Minimize Enforcement and Litigation Risk

"OTC stock compensation is increasingly at issue in retirement plans because of both a large retiring generation and the prevalence of equity awards at start-ups. Criminal enforcement of insider trading, market manipulation, and other securities fraud remains high. Both the DOJ and the DOL are encouraging voluntary self-disclosure and self-correction of non-compliance in common areas of fiduciary risk, such as transactions involving parties in interest, illiquid assets, and potentially improper valuations. Plaintiffs' lawyers are increasingly targeting OTC issuers/employers and their retirement plans to contest potential liquidity, valuation, or transfer problems involving OTC stocks."

First Circuit Says Massachusetts Non-Compete Agreement Enforceable in California Despite State’s Ban

"The case arguably stands for the proposition that an employee cannot escape an otherwise enforceable non-compete agreement by simply moving to (and working in) a state with different laws. Therefore, when hiring an employee from out-of-state, an employer should pay close attention to whether the employee is subject to a non-compete agreement that originates in another jurisdiction." [DraftKings Inc. v. Hermalyn, No. 24-1443 (1st Cir. Sep. 26, 2024)]

ERISA Litigation Highlights, August 2024

"[This update] discusses cases addressing the effect of continuing to receive benefits during the period of alleged disability, reliance on an employer’s records in making a disability determination, the admissibility of expert and lay testimony from a physician in a trial over LTD benefits, the effect of failing to comply with governing claims regulations and whether the risk of COVID-19 can qualify a claimant as disabled."

Pennsylvania Expands Use and Reimbursement of Telemedicine and Bans Noncompete Agreements for Certain Health Care Practitioners

"Act 42 expands the use of and ensures reimbursement for telemedicine services provided by a health care provider in Pennsylvania.... The TeleMed Act also specifies that payment by an insurer cannot be conditioned upon the use of an exclusive or propriety telemedicine technology or vendor.... The lone exception to the broad ban on a noncompete covenant in the FCHCPA is if the length is no more than one-year, provided that the health care practitioner was not dismissed by the employer."

ERISA Litigation Highlights, May 2024

"[1] Whether a provider has sufficiently pleaded the existence of a valid assignment clause to withstand a Motion to Dismiss in light of recent Third Circuit precedent.... [2] Whether Plaintiff's disability related to COVID-19 fell under a pre-existing condition exclusion in the long-term disability policy.... [3] Whether the insurance company's letter communicated rational reasons for its decision to deny a long-term disability claim.... [4] Did Plaintiff's complaint adequately plead the existence of a federal question such that defendant's notice of removal was untimely? ... [5] Whether the insurance company satisfied its fiduciary duty as mandated under ERISA to consider Plaintiff's claim fully and provide specific reasons for denial."

ERISA Litigation Highlights, February 2024

"[This article] explores decisions regarding [1] the transfer of an ERISA action that was filed in a state where an insurer did not maintain sufficient minimum contacts, [2] an award of attorneys' fees, costs, and prejudgment interest, [3] deference to an insurer's interpretation of a plan's provisions and ability to recoup overpaid money, and [4] an insurer's wrongful denial of benefits in light of powerful and compelling evidence submitted by a plaintiff-participant employed as an attorney."

ERISA Litigation Highlights, January 2024

"This [post] covers cases relating to [1] the enforceability of contractual statute of limitations provisions described as a 'labyrinth,' [2] ERISA claims when the carrier allegedly misrepresents benefits, [3] federal courts retaining ERISA jurisdiction following a related state court case, [4] a court excusing an administrator's regulatory violations under the arbitrary and capricious standard, and [5] a court enforcing the clear terms of a plan relating to when coverage for benefits ends."

Recent ERISA Litigation Highlights

"[This update] explores [1] a decision ordering an IME prior to a ruling on summary judgment motions, [2] the extent claims reporting records can be sealed, [3] the scope of ERISA preemption in the context of removal, and [4] two decisions awarding summary judgment for the defendant despite the plaintiffs having received disability benefits for several years prior."