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New Legislation Extends Relief for Telehealth Coverage Prior to Satisfying HDHP Deductible

The Consolidated Appropriations Act of 2022 (“CAA”), enacted on March 15, 2022, extends the optional relief previously provided under the CARES Act regarding the ability of a high deductible health plan (“HDHP”) to cover telehealth services without application of the deductible. Under the CARES Act relief, which applied to plan years beginning on or before December 31, 2021, a participant in an HDHP that adopted the relief could obtain pre-deductible telehealth services without compromising his or her ability to make contributions, or have contributions made, to a health savings account. See our prior blog post about the CARES Act relief here. The extension of the telehealth relief under the CAA is not retroactive to January 1, 2022, but instead is effective only for months beginning after March 31, 2022, and before January 1, 2023, thus creating a gap in the relief for calendar year plans (and certain non-calendar year plans)… Continue Reading

Eleventh Circuit Affirms Summary Judgment Because ERISA Plan Included Unambiguous Reservation of Rights Language

In Klaas v. Allstate Ins. Co., Allstate sponsored an employee welfare benefit plan subject to ERISA that paid life insurance premiums for certain retirees. Allstate made various representations that this benefit would continue for the remaining lives of the retirees. In 2013, Allstate informed the retirees that it would stop paying their life insurance premiums. The retirees sued alleging Allstate violated ERISA by no longer paying those premiums after making representations that the benefit would continue for a lifetime. The Eleventh Circuit affirmed the district court’s ruling, holding that no ERISA violation occurred because Allstate’s plan documents contained a no-vesting clause and an unambiguous reservation of rights provision that gave Allstate the right to modify or terminate retiree life insurance at any time.  This case is a good reminder to pay careful attention to what insurers and third-party administers put into your plan documents. Unlike retirement plans subject to ERISA,… Continue Reading

Prepare Benefits Materials in Consideration of the Surprise Medical Billing Rules and Model Notice

As employers prepare group health plans, SPDs, and other employee benefits materials for 2022, they need to consider the new surprise medical billing requirements under the No Surprises Act of the Consolidated Appropriations Act of 2021. Interim final rules were recently released for these new requirements, which are generally effective for plan years beginning on or after January 1, 2022. Provisions that may need to be changed include those regarding: (i) coverage of emergency services, including the definitions of emergency services and emergency medical conditions, how benefit payments are calculated, and coverage for out-of-network, independent freestanding emergency departments; (ii) network cost-sharing for out-of-network providers at network facilities who do not obtain consent for non-emergency services; and (iii) coverage of out-of-network air ambulance services. In addition, there is a new notice required that must be made publicly available, posted on a public website of the plan, and included in the plan’s… Continue Reading

Nothing in Life is Free ?Çô ERISA Expense Account Considerations

Many 401(k) plans contain spending accounts funded by revenue-sharing generated by a plan?ÇÖs mutual fund holdings. These accounts, often referred to as ERISA expense accounts, revenue-sharing accounts, or plan expense reimbursement accounts, can cause complications for plans if not administered properly. These revenue-sharing accounts can accumulate quickly, and in large plans, can result in hundreds of thousands of dollars each year. However, plan sponsors often do not know that the accounts are accumulating, and when they find them, may think they have just discovered ?Ç£free money.?Ç¥ But nothing in life is free, and missteps with the use of these funds could result in participant claims. Accordingly, before utilizing these funds, plan sponsors should use care and consider the following questions: Are the funds being held in the trust??áDOL Advisory Opinion 2013-03A (which is available here) noted that revenue sharing payments that were being received by the third party administrator prior… Continue Reading

Reminder: Employer Obligations Regarding Employee Life Insurance Coverage

In our prior blog post here, we discussed the case of Anastos v. IKEA Property, Inc., which highlighted the importance of an employer?ÇÖs understanding of how its group term life insurance coverage is impacted by changes in employment status, such as termination of employment, retirement, or a leave of absence. This understanding is necessary for the employer to correctly communicate to employees when life insurance coverage will end, when evidence of insurability will be required, and the requirements necessary to convert coverage. In Anastos, the employer drafted its retiree benefit plan to state that eligible retirees could continue life insurance and that, in most cases, coverage would be guaranteed with no medical certification required. When a retiree attempted to obtain this coverage, the employer admitted that its plan was misleading and that it could not obtain underwriting to provide that kind of life insurance continuation benefit. The retiree sued, and… Continue Reading

Delegating Fiduciary Duties Under ERISA Plans

The recent decision in Hampton v. National Union by the U.S. District Court for the Northern District of Illinois highlights the importance of following the provisions in ERISA plan documents for delegating fiduciary duties to entities acting as plan fiduciaries, such as third-party service providers and insurers. Following the death of her husband, who was an employee of The Boeing Company (?Ç£Boeing?Ç¥), the plaintiff sought to recover accidental death and dismemberment benefits under insurance policies sponsored by Boeing, for which she was the sole designated beneficiary. After National Union, which underwrote and co-administered the policies with AIG Claims, Inc., denied the plaintiff?ÇÖs initial benefits claim, as well as her appeal of such denial, the plaintiff brought suit under ERISA. The plaintiff argued that the court should apply a de novo standard of review (i.e., no deference given to the plan fiduciary?ÇÖs prior decisions) because National Union did not have discretionary… Continue Reading

Documentation of ERISA Authorized Representative Procedures

Under ERISA, a participant in an ERISA-covered plan has the right to designate an authorized representative to act on his or her behalf in connection with claims and appeals. The plan may establish reasonable procedures for determining whether an individual has been authorized to act on behalf of a claimant. Earlier this year, the DOL issued an information letter stating, in part, that: ?Ç£The plan must include any procedures for designating authorized representatives in the plan?ÇÖs claims procedures and in the plan?ÇÖs summary plan description (?Ç£SPD?Ç¥) or a separate document that accompanies the SPD.?Ç¥ Employers that sponsor ERISA plans should (i) verify that the claims procedures in each plan and SPD contain reasonable procedures for designating authorized representatives and (ii) amend the plan and SPD as needed. View the DOL information letter.

Plan Agent?ÇÖs Misstatements, Plus a Deficient SPD, May Equal an ERISA Fiduciary Breach

A recent opinion issued by the U.S. Court of Appeals for the Second Circuit highlights the adverse consequences that may arise when an employer sponsor of a group health plan that is subject to ERISA fails to maintain a summary plan description of the plan (?Ç£SPD?Ç¥) that is clearly written and that adequately and accurately describes the benefits available under the plan and the terms and conditions of coverage. Case Summary ?Ç£In re: Emily DeRogatis?Ç¥ is a decision out of the U.S. Court of Appeals for the Second Circuit. Under the facts of this case, Mrs. DeRogatis, the widow of a deceased participant in a multiemployer group health plan, filed a breach of fiduciary duty claim under ERISA against the plan administrator, asserting that prior to her husband?ÇÖs death, they were provided misinformation by two non-fiduciary, ?Ç£ministerial?Ç¥ plan representatives (the ?Ç£Representatives?Ç¥) regarding the effect of Mr. DeRogatis?ÇÖs retirement on their… Continue Reading

Fifth Circuit Opinion Clarifies Legal Claims Distinction under ERISA

In Manuel v. Turner Industries Group, L.L.C., the U.S Circuit Court of Appeals for the Fifth Circuit (whose jurisdiction includes Texas) considered various claims under ERISA that were brought by Michael Manuel, a former employee of Turner Industries (?Ç£Turner?Ç¥). His claims were brought against Turner and Prudential, the insurer and claims fiduciary under Turner?ÇÖs long-term disability benefits plan, and related to a denial of benefits to Manuel under that plan. One of his claims was for breach of fiduciary duty asserted against Turner under Section 502(a)(3) of ERISA (the ?Ç£Equitable Relief Provision?Ç¥) based on Manuel?ÇÖs argument that the plan?ÇÖs SPD omitted the pre-existing condition exclusion contained in the plan document that was the basis for Prudential?ÇÖs denial of his benefits claim, and thus Manuel relied to his detriment on a deficient SPD. Citing Fifth Circuit and U.S. Supreme Court precedent under ERISA, the Fifth Circuit reiterated the standing rule that… Continue Reading

Sixth Circuit Decision Highlights Importance of Distributing Accurate SPDs

A recent case decided by the U.S. Court of Appeals for the Sixth Circuit provides yet another example of the importance of ensuring that plan documents and summary plan descriptions (?Ç£SPDs?Ç¥) accurately and consistently describe plan benefits. In Pearce v. Chrysler Group LLC Pension Plan, the plan document provided that a participant who was not actively employed at retirement would be ineligible to receive an early retirement supplement. In contrast, the SPD stated that a participant did not need to be actively employed at retirement to remain eligible for the early retirement supplement. This discrepancy became an issue when an employee accepted a termination incentive, and the employer, relying on the language in the plan document, argued that this made the employee ineligible for the early retirement supplement. The employee requested that the lower court (i) grant equitable estoppel to prevent the employer from relying on the plan document, and… Continue Reading

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