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The Reversal of Roe v. Wade: What ‘s Next For Your Group Health Plan?

On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization. This decision overturned the Court’s prior decisions in Roe v. Wade and Planned Parenthood v. Casey, by holding that the U.S. Constitution does not confer any right to an abortion and returning the authority to regulate abortion back to the states. Some employer-sponsored group health plans provide coverage for abortion procedures and related expenses. The full impact of Dobbs on such coverage is unknown at this time, pending future legal developments in the states, guidance from the federal government, and the results of new court cases which will likely be filed in response to this decision. In the meantime, the following considerations may be relevant for employers that sponsor a group health plan: The application to a group health plan of any new or revised abortion-related laws that are passed in the… Continue Reading

Are Your Voluntary Benefits Programs Subject to ERISA?

An issue that many employers face is whether their so-called “voluntary benefits programs” should be considered ERISA plans. Voluntary benefits programs are characterized by employee-only paid premiums and limited employer involvement in a fully insured product. For the benefits provided under such a voluntary benefits insurance policy to be exempt from ERISA, the employer’s involvement in administering the policy must satisfy the requirements set out in the ERISA safe harbor regulation, as interpreted by the DOL and various courts. Generally, such a program will be exempt from ERISA if (i) there are no employer contributions toward coverage, (ii) participation in the program is completely voluntary, (iii) the employer does not endorse the program, and (iv) the employer receives no consideration for the program.  A recent case decided by a federal district court in Kentucky applied the above principles to determine whether a voluntary accidental death insurance policy was subject to… Continue Reading

Fifth Circuit Decision is a Reminder to Employers on Structuring Severance Plans

Last week?ÇÖs decision by the U.S. Court of Appeals for the Fifth Circuit in Atkins v. CB&I, LLC is a reminder that employers may prefer to structure bonus and severance programs so as to be covered by ERISA and thus avoid being subject to unfavorable state laws. In Atkins, five employees brought suit in Louisiana state court claiming their employer?ÇÖs project incentive bonus plan?Çöwhich pays a single bonus payment to employees who are laid off or complete their roles in a specific project?Çöconstituted an illegal wage forfeiture agreement under the Louisiana Wage Payment Act. Each of the employees had quit and consequently forfeited their bonuses under the plan?ÇÖs terms. The employer removed the suit to federal district court claiming the bonus plan was a severance plan subject to ERISA and thus ERISA, as controlling federal law, preempted the employees?ÇÖ state law claims. The district court agreed. The Fifth Circuit reversed… Continue Reading

Claim Alleging Unauthorized Payroll Deductions for Tobacco Surcharge Preempted by ERISA

In the recent case of Mebane v. GKN Driveline N. Am., Inc., No. 1:18-CV-00892 (M.D.N.C. Nov. 05, 2020), the federal district court held that a claim brought under the North Carolina Wage and Hour Act (?Ç£NCWHA?Ç¥) is preempted by ERISA. The employee-plaintiffs in this case alleged their employer violated the NCWHA by deducting from their paychecks, without express authorization, a monetary penalty for those employees who participate in the employer?ÇÖs group health plan and use tobacco products (i.e., a so-called ?Ç£tobacco surcharge?Ç¥). The defendant-employer filed a motion to dismiss this claim for unauthorized payroll deductions as being preempted by ERISA. The court agreed and dismissed the employees?ÇÖ claim, ruling that it was preempted by ERISA. The court?ÇÖs opinion is available here.

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 (?Ç£TPAs?Ç¥) of self-funded group health plans to pay a one percent tax on all ?Ç£paid claims?Ç¥ that such entities make to medical service providers. ?áThe 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. ?áBy way of background, earlier this year the U.S. Supreme Court vacated the Sixth Circuit?ÇÖs 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?ÇÖs recent decision in Gobeille v. Liberty Mutual Insurance Co.?á 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?ÇÖs severance plan, which was undisputed to be governed by ERISA (the ?Ç£ERISA Plan?Ç¥). 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?ÇÖ 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. ?áIn the marital settlement agreement, her husband waived his interest and future rights in the plans. ?áThe participant neglected to update the plans?ÇÖ beneficiary designation forms.?á They still designated her ex-husband as beneficiary when she died.?á The plan administrators for each plan initially determined that her benefit under the plans should be paid to the ex-husband. ?áThe participant?ÇÖs parents, as administrators of her estate, appealed the decisions.?á 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?ÇÖs state court suit. ?áThe state court found the ex-husband in contempt of the marital settlement agreement and ordered him to waive his interest in the benefits.?á 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 (?Ç£UHC?Ç¥), 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?ÇÖs opinion had held that ERISA did not preempt state claims brought by Access Mediquip (?Ç£Access?Ç¥), 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?ÇÖs denial of UHC?ÇÖs petition… Continue Reading

Federal District Court Holds that ?Ç£Top Hat?Ç¥ Plan is not an ERISA Plan and Executive?ÇÖs Claims are not Pre-Empted by ERISA

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

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

The company, Access Mediquip (?Ç£Access?Ç¥), procures medical devices to be used during surgeries by health care providers.?á Access first contacts insurance companies to ensure that its medical devices are covered prior to procurement.?á 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.?á The U.S. District Court for the Southern District of Texas found that ERISA preempted Access?ÇÖ state law claims seeking reimbursement from UnitedHealthcare.?á However, on appeal, the U.S. Court of Appeals for the Fifth Circuit reversed the district court with respect to Access?ÇÖ claims for negligent misrepresentation, promissory estoppel and violations of the Texas Insurance Code.?á UnitedHealthcare then petitioned for a rehearing en banc, arguing that the Fifth Circuit?ÇÖs decision was inconsistent with its prior opinions.?á On the rehearing en banc, the Fifth Circuit reinstated… Continue Reading

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