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ERISA Does Not Preempt Michigan Paid Claims Tax

In Self-Insurance Institute of America v. Snyder, the U.S. Court of Appeals for the Sixth Circuit ruled that ERISA does not preempt a Michigan state statute requiring insurers and third-party administrators (“TPAs”) of self-funded group health plans to pay a one percent tax on all “paid claims” that such entities make to medical service providers.  The statute also requires insurers and TPAs to (i) file quarterly returns with the Michigan Department of the Treasury, (ii) keep accurate and complete records, and (iii) develop and implement a methodology for collecting the tax.  By way of background, earlier this year the U.S. Supreme Court vacated the Sixth Circuit’s 2014 decision in this case (which also held that the Michigan statute was not preempted by ERISA) and remanded the case for further consideration in light of the Supreme Court’s recent decision in Gobeille v. Liberty Mutual Insurance Co.  In Gobeille, the Supreme Court… Continue Reading

Texas Supreme Court Holds that Severance Arrangements Relating to an ERISA Plan are Preempted by ERISA

When Tyco Valves & Controls, L.P. closed one of its facilities, it offered certain employees severance benefits pursuant to either (i) a severance pay schedule for that facility or (ii) retention agreements. At that time, Tyco employees were covered by Tyco’s severance plan, which was undisputed to be governed by ERISA (the “ERISA Plan”). After Tyco sold one of the production units located in the facility, several former employees who had been denied severance filed a breach-of-contract claim under state law against Tyco. The trial court ruled in favor of the plaintiffs and awarded the severance pay. The court of appeals reversed, and the Texas Supreme Court agreed, holding that ERISA preempted the plaintiffs’ breach-of-contract claims. The plaintiffs involved were two separate groups. The first group was promised severance pay under a schedule that referenced the ERISA Plan, copied and used terms from the ERISA Plan, and purported to supersede… Continue Reading

State Court Order to Turn Over ERISA Plan Benefits Not Preempted by ERISA

A participant in two employer-sponsored ERISA plans divorced her husband.  In the marital settlement agreement, her husband waived his interest and future rights in the plans.  The participant neglected to update the plans’ beneficiary designation forms.  They still designated her ex-husband as beneficiary when she died.  The plan administrators for each plan initially determined that her benefit under the plans should be paid to the ex-husband.  The participant’s parents, as administrators of her estate, appealed the decisions.  After the claims appeal process, the ex-husband filed for declaratory relief in federal district court, which stayed its decision pending the outcome of the estate’s state court suit.  The state court found the ex-husband in contempt of the marital settlement agreement and ordered him to waive his interest in the benefits.  The federal district court then ordered the plan administrators to pay the funds to the ex-husband and the ex-husband to then waive… Continue Reading

U.S. Supreme Court Declines Review of Ruling in Fifth Circuit ERISA Preemption Case

The U.S. Supreme Court recently denied a petition for writ of certiorari by United Healthcare Insurance Company (“UHC”), which had requested judicial review of a ruling by the U.S. Court of Appeals for the Fifth Circuit, whose jurisdiction includes the State of Texas. The Fifth Circuit’s opinion had held that ERISA did not preempt state claims brought by Access Mediquip (“Access”), a medical device provider, against UHC for negligent misrepresentation, promissory estoppel, and violations of the Texas Insurance Code (see Access Mediquip L.L.C. v. UnitedHealthcare Insurance Co., No. 10-20868 (5th Cir. Oct. 5, 2012), a decision that overturned existing law in the Fifth Circuit. Access had sued UHC in 2009, claiming that UHC refused to provide reimbursement for medical devices that Access had procured and provided to covered persons based on a coverage authorization for such devices that Access previously received from UHC. The Supreme Court’s denial of UHC’s petition… Continue Reading

Federal District Court Holds that “Top Hat” Plan is not an ERISA Plan and Executive’s Claims are not Pre-Empted by ERISA

The former president of a credit union service organization (“Executive”) brought several state-law claims for breach of contract and misrepresentation against his employer in connection with an agreement to terminate an Executive Deferred Compensation Plan (the “Plan”).  The credit union had been in severe financial distress and had offered to partially vest the Executive’s benefit, terminate the Plan and pay the Executive a distribution of $234,068.18 in exchange for his agreement to the Plan termination.  Before the credit union could pay the Executive, it was placed into conservatorship.  The conservator repudiated the agreement with the Executive.  The Executive then terminated his employment and filed suit in Texas state court.  The credit union removed the case to a federal district court and filed a motion for summary judgment on the basis that the Executive’s state-law claims were preempted by ERISA.  The court analyzed whether the Plan is an ERISA employee welfare… Continue Reading

Fifth Circuit Confirms ERISA Does Not Preempt Medical Provider’s State Claims Against Insurance Company; Overrules Prior Cases

The company, Access Mediquip (“Access”), procures medical devices to be used during surgeries by health care providers.  Access first contacts insurance companies to ensure that its medical devices are covered prior to procurement.  Access had received prior authorization for a medical device from UnitedHealthcare; however, UnitedHealthcare later denied the reimbursement claim from Access by stating it would only cover such devices when billed by surgical facilities.  The U.S. District Court for the Southern District of Texas found that ERISA preempted Access’ state law claims seeking reimbursement from UnitedHealthcare.  However, on appeal, the U.S. Court of Appeals for the Fifth Circuit reversed the district court with respect to Access’ claims for negligent misrepresentation, promissory estoppel and violations of the Texas Insurance Code.  UnitedHealthcare then petitioned for a rehearing en banc, arguing that the Fifth Circuit’s decision was inconsistent with its prior opinions.  On the rehearing en banc, the Fifth Circuit reinstated… Continue Reading

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