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Court Finds Breach of Fiduciary Duty Against Broker for Failure to Explain Interaction of Stop-Loss and Self-Funded Health Plan Coverage

In Express Oil Change, LLC v. ANB Insurance Services, Inc., the sponsor of an employee health plan (the ?Ç£Employer?Ç¥) decided to convert its funding for the plan from a fully-insured to a self-funded basis. In preparation for the conversion, the Employer sought the advice and expertise of ANB Insurance Services, Inc. (the ?Ç£Broker?Ç¥) with implementation of the self-funded plan (the ?Ç£Plan?Ç¥) and procurement of the associated stop-loss insurance coverage. Apart from providing benefit consulting services to the Employer, the Broker had a long-standing and close relationship with the Employer as its agent for various other types of insurance coverage. The terms of the newly self-funded Plan provided for a $1 million lifetime maximum per participant on out-of-network benefits, but no such limit on in-network benefits. The Employer erroneously thought that the lifetime maximum applied to both in-network and out-of-network benefits and purchased a stop-loss policy with a deductible of $75,000… Continue Reading

DOL Issues Guidance to Employers Regarding PPACA Required Notices to Employees

The U.S. Department of Labor (the ?Ç£DOL?Ç¥) recently released Technical Release 2013-2, which contains temporary guidance regarding notices required by the Patient Protection and Affordable Care Act (?Ç£PPACA?Ç¥) that employers must provide to their employees concerning coverage options available in the new health insurance marketplaces, or ?Ç£exchanges.?Ç¥ Generally, PPACA requires that any employer subject to the Fair Labor Standards Act (?Ç£FLSA?Ç¥) must provide its employees with written notice of the existence of an exchange, contact information for the exchange, and the services provided by an exchange; that the employee may be eligible for a premium tax credit if the employee purchases coverage through an exchange; and that the employee may lose any employer contribution to a health benefit plan, if offered by that employer, which contribution may have been excludible from the employee?ÇÖs taxable income. Effective October 1, 2013, employers must provide such notices to all current employees and to… Continue Reading

May 2013