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Category Archives: Employee Benefits/ERISA

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ERISA damages—two bites off the same apple are impermissible

Posted in Employee Benefits/ERISA

Rich McHugh, editor of our sister blog – Employee Benefits Law Report - published a blog earlier today on a recent en banc decision by the United States Court of Appeals for the Sixth Circuit that may be of interest to our readers. On March 5, 2015, the United States Court of Appeals for the Sixth Circuit issued an en banc decision in Rochow v. Life Insurance Company of North America that deals with the ability of a participant in a plan covered by ERISA to recover benefits due from that plan while simultaneously pursuing “other appropriate equitable relief” based …

The Supreme Court unanimously says changes to retiree medical coverage a matter of contract analysis—but with a mild twist

Posted in Employee Benefits/ERISA

In what perhaps can be best described as a win for traditional contract analysis, the United States Supreme Court (the “Court”) issued an opinion on January 25, 2015 in M&G Polymers USA, LLC, et al. v. Tackett et al, that may permit M&G Polymers USA, a chemical company, to force its retirees to help pay for the cost of retiree medical coverage. While technically a unanimous decision, the Court’s opinion , which was authored by Justice Clarence Thomas, seems to prefer a stricter standard for this sort of contract analysis than what is set forth in a concurring opinion …

The Obamacare see-saw — an opposing decision on subsidies

Posted in Employee Benefits/ERISA, Traps for the Unwary

Some days are just more fun that others!

Just hours after the D.C. Circuit Court of Appeals issued its opinion in Halbig v. Burwell, which held that tax subsidies made available under the Affordable Care Act (“ACA”) to lower income individuals to help defray the cost of health care coverage may not be extended to individuals who reside in states that have elected not to establish their own health care exchanges, the 4th Circuit Court of Appeals today issued a unanimous decision today in King v. Burwell that upholds entitlement to tax subsidies available under the ACA for all …

Obamacare takes an unexpected hit!

Posted in Employee Benefits/ERISA, Traps for the Unwary

A federal Court of Appeals panel in Washington, D.C. today released a decision that, if upheld, would strike down one of the main pillars of the Affordable Care Act (“ACA”) and in the minds of many observers lead to unpredictable consequences. In a 2-1 decision in Halbig v. Burwell, the three-judge federal appeals panel reversed a decision by a lower District Court judge and held that tax subsidies made available under the ACA (often referred to as Obamacare, with or without derision) to lower income individuals–generally individuals making less than $46,075 annually–to help defray the cost of health care …

Corporations get religion — and maybe lose contraception coverage

Posted in Employee Benefits/ERISA

Editor’s Note:  This blog was originally published on our sister blog – Employee Benefits Law Report - last week and we wanted to share it with our blog readers here as well.

The United States Supreme Court held in a 5-4 decision issued on Monday, June 30 that regulations issued under the Affordable Care Act (the “ACA”) that compel closely held corporations to provide contraception coverage for their employees violated the Religious Freedom Restoration Act of 1993 (the “RFRA”). Two cases actually are involved in this opinion, including Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties v. Sebelius (referred …

Sixth Circuit finds all anti-retaliation provisions are not created equal, but they are legal landmines. Watch your step.

Posted in Employee Benefits/ERISA

Generally speaking, employment-related retaliation laws prohibit employers from taking adverse actions against employees who engage in protected conduct, like complaining about discrimination or harassment, or for participating in a governmental investigation.

There is no doubt anti-retaliation laws serve a good purpose, but did you know there are at least 40 different federal anti-retaliation laws? This does not even include the various state anti-retaliation laws. The scope of these laws is vast. There are anti-retaliation provisions in the federal employment laws, the Clean Air Act, the International Safe Container Act, and many more, but what is even more surprising is that …

ERISA Section 510: wanting to be a participant, versus being a participant

Posted in Employee Benefits/ERISA

Editor’s Note:  This blog first appeared last Thursday on our sister blog – Employee Benefits Law Report.

My assistant informed me that my patience is shot and I need to do something about that, so I am channeling my energy into one issue. Since health care reform was enacted, I have been hearing about how we should anticipate a flood of ERISA Section 510 (29 U.S.C. Section 1140) discrimination cases from people who are not participants under the plan terms, but want to be participants. I don’t get it.

ERISA Section 510 provides, “[i]t shall be unlawful for any …

One More Example Of Why Employers Should Be Careful In Implementing Arbitration Agreements

Posted in Employee Benefits/ERISA

When you are before the Sixth Circuit Court of Appeals asking it to vacate an arbitrator’s award, and the court’s opinion begins with “[t]he arbitrator’s decision would doubtless be reversed if it were a decision under the precedent of this court,” you probably think you have won the case. You would be wrong. Here is what happened in Schafer v. Multiband Corporation and what it means for arbitration agreements in the Sixth Circuit.

The Case

In Schafer, Bernard Schafer and Henry Block served as trustees of a company’s two employee stock ownership plans (ESOPs). At one point Schafer and …

Health Care Reform Surprise: Obama Administration Delays Enforcement of Employer Mandate For One Year

Posted in Employee Benefits/ERISA

Editors Note:  With the Obama administration’s recent surprise delay regarding the enforcement of the employer mandate under the Affordable Care Act, our colleagues at Employee Benefits Law Report have written this summary below.

In a surprising but generally welcome move, the Obama administration has moved to delay the enforcement of the employer mandate to provide health care coverage under the Affordable Care Act (the “ACA”), which otherwise was scheduled to go into effect in 2014. This delay in enforcement formally was announced in a statement released July 2, 2013 by Mark J. Mazur, Assistant Secretary for Tax Policy at …

U.S. Supreme Court decision: U.S. Airways, Inc. v. McCutchen

Posted in Employee Benefits/ERISA

The United States Supreme Court issued an opinion earlier this week in an ERISA case regarding the breadth of Section 502(a)(3) relief, and the common-fund doctrine. While the decision was unanimous on the primary issues, the Court surprised us with a 5-to-4 split on a secondary issue. Overall, the decision in U.S. Airways, Inc. v. McCutchen is favorable for employers sponsoring health care plans. The decision is also favorable for health care plan participants in the aggregate because it allows for control of plan costs, and premiums, at a critical time when plans are gearing up for 2014 health care …

Sixth Circuit Decision Reminds Employers: Get Your Ducks in a Row at the EEOC Charge Stage and, for Goodness Sake, Know Your Own Policies

Posted in EEO, Employee Benefits/ERISA

Gaglioti v. Levin Group, Inc. (6th Cir. Dec. 13, 2012), serves as a good reminder to employers to pin down their reasoning for terminating an employee at the start, and stick to it. In addition, all reasons for terminating an employee should be included in the termination meeting with the employee, or at the very least, at the EEOC charge stage, even if it might bruise the employee’s ego. Any change or supplementation to the original reason can make put the entire termination decision seem made up and send the employer to trial. It is also imperative that employers know …

Health Care Reform Survives Supreme Court Scrutiny – But Not Entirely Intact

Posted in Employee Benefits/ERISA, Workforce Strategies

Health care reform just got a clean bill of health from the United States Supreme Court. The Court today ruled on the constitutionality of the Patient Protection and Affordable Care Act ("PPACA"), and generally upheld the legislation in a 5-4 decision written by Chief Justice John G. Roberts. Roberts was joined in his opinion by the four justices who had been appointed to the Court by Democratic presidents. In an expected development, certain individual justices wrote and/or joined concurring and dissenting opinions as well. The Court upheld the individual mandate to purchase health coverage, concluding that the mandate is permissible …

The Fiduciary Exception to the Attorney-Client Privilege — “Document Everything” is a Best Practice, Except When It Isn’t

Posted in Employee Benefits/ERISA

 The following was posted by our associate Seth Hanft on our sister blog Employee Benefits Law Report last Friday. It provides a great reminder to in-house counsel addressing employee benefit claims that their communications with their benefits personnel regarding employee benefits claims may not be protected by the attorney-client privilege. Keep in mind that both counsel and benefits managers often wear fiduciary and non-fiduciary hats when addressing benefits plans issues and it is not always clear which hat they are wearing when. Therefore, to avoid potential spill over of this fiduciary exception to their other areas of responsibility, in house

Porter Wright Launches Employee Benefits Blog

Posted in Employee Benefits/ERISA, Porter Wright News, Workforce Strategies

Employer Law Report is pleased to share with you the launching of Porter Wright’s latest blog – Employee Benefits Law Report – which we have created as a resource to help guide employers of all sizes through the complex administrative and legal challenges facing their employee benefit plans.

This blog – edited by my partners Ann Caresani and Rich Helmreich – will provide the latest information in a wide range of areas related to Employee Benefits including:

  • ERISA and employee benefits litigation
  • Health care reform
  • Retirement plans
  • Audits and correction
  • Benefits issues related to mergers and acquisitions
  • Employee Stock Ownership

ERISA Time Travel Continues

Posted in Employee Benefits/ERISA

We recently blogged about an infrequent ERISA surprise from the US Supreme Court, in CIGNA v. Amara, and now we have a second ruling from the Supreme Court in that case, granting Amara certioria and remanding.  This is a procedural twist that is more interesting to lawyers than employers, but it underscores the point we made about uncertainty in this area:  we don’t really know what remedies are other "appropriate equitable relief" under ERISA, or know how much exposure employers face regarding their ERISA plans.  Establishing procedures for compliance with ERISA’s disclosure and other requirements is …

Supreme Court Time Travels with an ERISA Case

Posted in Employee Benefits/ERISA, Employment Class & Collective Actions

Supreme Court decisions about ERISA cases, while infrequent, typically contain some surprises, as demonstrated most recently in CIGNA Corp. v. Amara.

In 1997, CIGNA notified employees that it was freezing accruals under its traditional defined benefit plan, and converting the plan into a cash balance plan. A cash balance plan is a "hybrid" defined benefit plan with features similar to a defined contribution plan. The method for determining accruals under the cash balance plan is different from the method under the traditional defined benefit plan, and in many cases takes into consideration the benefits already accrued under the traditional …

Sixth Circuit Upholds Denial of ERISA-Based Income Protection Benefits; Plan Administrator Need Not Investigate Whether the Employer Violated FMLA

Posted in Employee Benefits/ERISA, Leave Administration

As demonstrated by the Sixth Circuit’s recent decision in Farhner v. United Transportation Union Discipline Income Protection Program, a well-drafted ERISA income protection or severance pay plan should enable the plan administrator to rely on the employer’s stated reason for termination of an employee, rather than conducting an independent review of the facts regarding the termination.

In May 2004, Mark Farhner, a trackman and conductor for the Kansas City Southern Railroad sought a three-month leave of absence for "medical reasons." KCSR’s human resources manager requested additional information from Farhner to justify his request. When Farhner’s vacation leave had been …

Health Care Reform Dilemmas for Employers Sponsoring Group Health Plans

Posted in Employee Benefits/ERISA

Many employers sponsoring group health plans are asking ….

What employee benefit plan-related changes are required by the Patient Protection and Affordable Care Act?

When must these changes be implemented?

Will these changes raise costs, and what penalties and fees might my company face for non-compliance?

We have just issued a Law Alert that discusses these and other dilemmas facing employers sponsoring group health plans. We also have record attendance scheduled to attend our Employment Relations Seminar next Tuesday, May 4, 2010 at the Hilton Columbus at Easton Town Center, where we will be discussing "Health Care Reform: What Employers Need …

Congress Extends COBRA Subsidy for A Third Time–Until May 31, 2010

Posted in Employee Benefits/ERISA

Last week, the President signed into law House Resolution 4851, which extends several government programs through May 31, 2010, including the ARRA COBRA subsidy. House Resolution 4851 is referred to as the Continuing Extension Act of 2010. It simply extends the previous COBRA subsidy cut-off date of March 31, 2010 to May 31, 2010. The text of the law briefly explains that those terminated between April 1 and 15 will be retroactively covered by the law similar to past extensions of the COBRA subsidy. 

Keep in mind that, as stated in my earlier posts on this subsidy, assistance eligible individuals who are involuntarily …

The Supreme Court Rejects Actuarial Heresy in Conkright v. Frommert

Posted in Employee Benefits/ERISA

Rejecting actuarial heresy, the United States Supreme Court has refreshingly acknowledged that “People make mistakes. Even administrators of ERISA plans.” Specifically, the Court held that a single honest mistake in plan interpretation does not justify stripping the administrator of deference for subsequent related interpretations.

In Conkright v. Frommert, a case that has been winding through the courts for the past decade, rehired employees of Xerox Corporation alleged that the Xerox pension plan administrator improperly offset their benefit calculations for prior lump sum distributions of pension benefits. Their claims involved a series of plan amendments, communication to participants, and how the plan administrator …

The Health Reform Bill: What Do Employers Need to Know?

Posted in Employee Benefits/ERISA, Traps for the Unwary, Workforce Strategies

Following a year-long contentious debate, Congress finally passed the President’s top domestic agenda item: Health Reform.

Sunday, the House of Representatives passed the Senate version of the Health Reform Bill by a slim margin (three votes more than required) and no Republican support. The Bill contains broad reforms that make numerous significant changes to the ways in which healthcare is accessed, delivered and financed. Some of the noteworthy changes (and effective dates) for employers to consider are the following:

  •  Employers with 200 or more employees that sponsor a health plan must automatically enroll all employees in the employer-sponsored plan. Employees may

Congress passes temporary COBRA subsidy extension through March 31, 2010

Posted in Employee Benefits/ERISA

Congress recently passed the Temporary Extension Act of 2010, which, in addition to extending unemployment benefits, extends and expands the COBRA premium subsidy originally provided by ARRA (the stimulus bill). The new law extends the end of the eligibility period for the COBRA subsidy from February 28, 2010 to March 31, 2010. This means that individuals involuntarily terminated between September 1, 2008 and March 31, 2010 are eligible for 15 months of subsidized COBRA premiums—with the employee paying only 35% of the actual COBRA premium.

The recent extension also expands the COBRA subsidy to those who lost their health insurance coverage as …

Ohio extends State Mini-COBRA Health Insurance Continuation Coverage From 12 to 15 Months

Posted in Employee Benefits/ERISA

Governor Strickland just signed into law a bill (House Bill 300) that would extend Ohio’s state “mini COBRA” coverage for any policies delivered, issued, or renewed on or after February 25, 2010.

The coverage under the Ohio mini-COBRA law will be extended from 12 months to 15 months so long as the employee is eligible for the federal COBRA subsidy. At present, the federal COBRA subsidy does not apply to any employees involuntarily terminated after February 28, 2010. This state extension was passed in anticipation of a federal extension of the COBRA subsidy beyond that date, which is presently under consideration in …