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Fifth Circuit Weighs in on a Recurrent Problem: When Operational Errors Eliminate Group Life Insurance Benefits

"Group life is the redheaded stepchild of employee benefits, often added on by insurers on top of the primary products being sold to plan sponsors and employers, such as disability insurance.... [P]roblems tend to crop up in the administration of group life plans and in the payment of claims due to nothing more than the lack of attention that comes with being a relative afterthought." [Edwards v. Guardian Life Ins. of Am., No. 24-60381 (5th Cir. June 20, 2025)]

What if Trust Law Cannot Support the Moench Presumption?

"The extent, nature and degree to which the Supreme Court grapples with these two issues -- whether either the terms of the statute or the scope of trust law can support the presumption -- will tell a very interesting tale, by illustrating whether the presumption's status is actually driven by the legal foundation crafted by the statute and trust law or, instead, by an outcome driven need to balance the securities law regime with the dictates of ERISA. If the presumption is found valid, one will need to look closely at whether the Court was able to properly base that conclusion in the historical intricacies of trust law or in the statute's language. If so, then the presumption can be understood to follow naturally from existing law; if not, then the presumption must be seen, as many have argued it is, as simply a convenient judicial fiction, one not properly founded on either trust law or statutory language, used to balance conflicting legal obligations imposed by distinct statutes."

Pay or Play Acts, the Ninth Circuit, and the Never Ending Law of Unintended Consequences

Excerpt: Among the most prominent decisions issued while I was in court was, obviously, the Ninth Circuit's ruling finding that San Francisco's pay or play law was not preempted by ERISA. Can't say I buy that one. Whatever is the scope of preemption in the field of ERISA, it logically reaches state efforts that result in a multi-jurisdictional company having to comply, with regards to its employee benefit plans, with a differing web of regulation that varies from one state to the next. Of more interest, perhaps, is the wide ranging group of consequences, some predictable and others unintended, that the Ninth Circuit ruling likely unleashes.

Hecker and the Development of the Law on the 404(c) Defense

Excerpt: One of the Seventh Circuit's most interesting tricks in its recent decision in Hecker was the extraordinary breadth it gave to the 404(c) defense. This was an aspect of the decision that raised a lot of hackles, and I noted in my own post on the case that I doubted this was the last word on the subject and that it would be interesting to see how the case law developed as other courts tackled this question. Well, here's a decision from a week or so ago out of the United States District Court for the District of New Hampshire taking a much narrower approach in interpreting the amount of protection granted to fiduciaries by section 404(c), finding that the defense does not apply to 'a fiduciary's designation of the investment options that are available to plan participants.'

Follow the Numbers: the Evolution in ERISA Law

Excerpt: I have noted two things - well, many things, only two of which are relevant to this post - in the past, one the line that Marx was wrong about a lot of things, but he was right that everything is economics, and the second that we are beginning to see an incremental evolution in the law of ERISA to account for the reality that pensions - predominant at the time of many of the earlier, key court rulings on ERISA - have been supplanted by defined contribution plans.

What Happens When ERISA and the Law of Insurance Coverage Collide?

Excerpt: Wow, I guess this is really Seventh Circuit week here, with, I guess, a particular focus on the jurisprudence of Judge Easterbrook, whose opinion in Baxter I discussed in my last post. This time, I turn to his decision from Wednesday in Federal Insurance Co. v. Arthur Andersen, which strikes right at the intersection of the two subject areas in the title of this blog, insurance and ERISA.

Disclosure of Information: Where Securities Law and ERISA Diverge

"Cool, what a nice treat to me for the first real workday of the New Year. I have always wanted a reason to link to the Harvard Law School Corporate Governance blog because, well, it just sounds so impressive (that plus it's a really good read on all things corporate), and one of their contributors handed me the opportunity over the weekend. In a post addressing SEC requirements for online posting of public company proxy materials, the author -- a Gibson Dunn partner and visiting professor at Georgetown -- points out how these requirements differ from the notice requirements under ERISA[.]"

When Must an Insurer Settle a Claim in Massachusetts and the Risks of Breaching the Duty to Settle

"Coverage itself, because it’s basically at heart a contract based inquiry, is reasonably consistent – to at least some extent – from one jurisdiction to the next. But bad faith, when an insurer has to settle and what are the penalties for failing to settle when it was required, vary greatly from one state to the next. ... [H]ere are the key highlights of the duty of an insurer to settle claims in Massachusetts, and the liabilities that can run with breaching it."

Withdrawal Liability, the Seventh Circuit, and the Limits of Creativity

"[C]reativity in arguing for a reduction of withdrawal liability, followed with any luck by settlement negotiations, is typically an employer's best bet for reducing withdrawal liability. As the Seventh Circuit's new decision reflects, taking on the statute and its requirements directly is typically not all that effective of a tactic." [SuperValu, Inc. v. United Food & Com. Workers Unions & Emps. Midwest Pension Fund, No. 24-2486 (7th Cir. Oct. 9, 2025)]

Ninth Circuit Weighs in on the Scope of ERISA Releases

"The intersection of releases with ERISA governed benefits, as well as with a fiduciary's obligations, is a little backwater corner of ERISA law that ... can give rise to a great deal of misunderstanding and confusion in the relationship between plan sponsors and plan participants. This decision -- particularly since its guidance is likely to be borrowed in decisions and lawsuits elsewhere -- will help with those problems." [Schuman v. Microchip Technology Inc., Nos. 24-2624, 24-2978 (9th Cir. Jun. 5, 2025)]