An employee is informed by an employer health plan that surgery is approved, only to learn afterwards that the plan changed its mind and refused to pay over $77,000 in bills. The occasion of these simple and all-too-common facts gives the Seventh Circuit an opportunity to apply the recent U.S. Supreme Court decision Cigna Corp. v. Amara, 131 S. Ct. 1866 (2011). It holds that Cigna "substantially changes our understanding of the equitable relief available under section 1132(a)(3)" and expands judicial options for remedies, including monetary relief.
A Sixth Circuit case demonstrates that a employee's release of claims, even a broad general release, may not be effective against ERISA claims. The court affirms class certification and liability in favor of the plaintiffs in a case where a class of release-signers challenged the calculation of their pensions. The court holds that the future accrual of retirement benefits may not be within the scope of a standard release.
A recent ERISA case from the Fourth Circuit reaffirms that, sometimes, it is appropriate for a district court to consider evidence outside the administrative record in deciding whether the plan administrator abused its discretion in denying benefits. Here, the court upholds a judgment in the beneficiary's favor holding that she was erroneously denied early retirement benefits that she only belatedly learned were available to her.
An important part of the Employee Retirement Income Security Act of 1974 was reforming the practice of "backloading" pensions - in other words, having the lion's share of contributions come at the end of the employee's career, resulting in smaller retirement payouts. This D.C. Circuit decision, affirming a ruling that the Hilton Hotel pension plan violated the anti-backloading rule, furnishes an important lesson to all persons enrolled in such "defined benefit" plan: keep an eye on your benefit statements.
The Sixth Circuit provides the first definitive, court of appeals decision on a recurring issue: is it a fiduciary act, subject to ERISA § 404(a)(1), for a plan fiduciary to incorporate (in this case, allegedly untruthful) SEC filings by reference in a Summary Plan Description, thus potentially misleading participants about the risk of investing retirement money in the employer's stock fund? The Sixth Circuit holds that it is.
The Seventh Circuit weighs in on an ERISA issue dividing the circuits: Do participants' informal complaints about plan-related issues constitute protected activity under Section 510, 29 U.S.C. §1140? With a thoughtful parsing of the language, the panel holds that such complaints do trigger the protections of Section 510.
One of the difficulties of enforcing participants' statutory rights under ERISA, heretofore, has been the lack of effective make-whole remedies. But in the wake of last term's CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011), participants have remedial options not previously available to them for breach of fiduciary duty claims. The Fourth Circuit reverses summary judgment in a case where a participant had been allowed to pay for years for dependent life insurance that (evidently) she was not entitled to receive.
In the ERISA field, here's a lifeline to all of those challenging "pre-authorization" denials of benefit claims. The Fifth Circuit re-animates a case challenging an HMO denial of Therapy for sleep apnea, based on a supposed "pre-authorization" requirement that the panel finds at-best ambiguous.
ERISA cases often turn on whether a plan administrator's interpretation of ambiguous plan language is reasonable (i.e., not an "abuse of discretion"). But in this non-precedential decision, a Fourth Circuit panel (2-1) tosses out a judgment in favor of the plan in the anti-cutback case - on the ground that only one interpretation of the plan is reasonable and favors the participants. It all started when the plan administrator demanded repayment of nearly 18 months' worth of benefits by a participant who (supposedly) was not eligible.
Under what is known as the Moench presumption, an ERISA plan fiduciary's decision to remain invested in employer stock in an Employee Stock Ownership Plan (ESOP) is insulated from legal challenge unless the participant proves that a prudent fiduciary would have made a different investment decision. The Sixth Circuit today reverses dismissal of such a case, where the ESOP - of General Motors stock - cratered as GM went into bankruptcy. Importantly for the future of such cases, the Sixth Circuit rejected the rulings of several other circuits and holds that the participant need not allege the Moench presumption in a complaint.