Header graphic for print

Proskauer's ERISA Practice Center Blog

The View from Proskauer on Developments in the World of Employee Benefits, Executive Compensation & ERISA Litigation

“Highest Contribution Rate” Means Highest of Any CBA for ERISA Withdrawal Liability Payments

Posted in Withdrawal Liability

The Third Circuit held that where an employer has been party to multiple collective bargaining agreements (“CBAs”) with a multiemployer fund, an employer’s withdrawal liability should be based on “the single highest contribution rate” established under the CBAs.  In so ruling, the Court observed that ERISA requires annual withdrawal liability payments to be based on “the highest contribution rate at which the employer had an obligation to contribute under the plan,” and rejected the employer’s argument that a “weighted average” of the contribution rates should apply.  Continue Reading

Ninth Circuit Applies “Successorship Doctrine” to Claim for MPPAA Withdrawal Liability

Posted in Withdrawal Liability

The Ninth Circuit concluded in a case of first impression that an employer could be held liable for its predecessor’s withdrawal liability to a multiemployer pension fund pursuant to the “successorship doctrine.”  The Court ruled that “the most important factor in assessing whether an employer is a successor for purposes of imposing MPPAA withdrawal liability is whether there is substantial continuity in the business operations between the predecessor and the successor, as determined in large part by whether the new employer has taken over the economically critical bulk of the prior employer’s customer base.”  The Ninth Circuit concluded that the district court failed to weigh whether the alleged successor had retained a significant portion of its predecessor’s customer base, or “market share.” In addition, Continue Reading

State Law Claims for Short-Term Disability Benefits Not Preempted By ERISA

Posted in Preemption

A federal district court in Tennessee ruled that ERISA did not preempt state law claims for short-term disability benefits because the short-term disability plan fell under the “payroll practice” exception of ERISA.  LeBlanc v. SunTrust Bank, No. 3:15-cv-00630 (M.D. Tenn. Aug. 24, 2015).  SunTrust provided employees with short-term disability benefits for up to 25 weeks per injury or illness and required employees to be approved for the full 25-week period before they qualified for long-term disability benefits.  Continue Reading

Plan Administrator’s ERISA Declaratory Judgment Action Dismissed for Lack of Jurisdiction

Posted in Jurisdiction

After a top-hat plan and pension plan denied a participant’s claims and appeals for additional benefits, the plan administrators preemptively filed a declaratory judgment action, seeking a declaration that:  (i) termination of defendant’s employment was not for the purpose of interfering with his ability to attain rights under the plans or ERISA; (ii) the top-hat plan is exempt from certain ERISA requirements; and (iii) the pension plan correctly denied defendant’s claim and appeal.  Continue Reading

Third Circuit Says ERISA Administrative Appeal Denial Letters Must State Plan-Imposed Time Limits

Posted in SOL

The Third Circuit recently held that ERISA administrative appeal denial letters must include plan-imposed time limits for commencing a lawsuit challenging the claim denial, and the failure to provide such notice warranted setting aside the plan’s limitation period.  Mirza v. Ins. Adm’r. of Am., Inc., 2015 WL 5024159 (3d Cir. Aug. 26, 2015). The ERISA claims regulation provides that adverse determination letters must provide a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action” for benefits.  29 C.F.R. § 2560.503-1(g)(1)(iv). Consistent with the First and Sixth Circuits’ rulings on this issue, the Third Circuit determined that the regulation’s “time limit” notice requirement  applies not only to periods pertaining to when a participant may file an administrative appeal, but also to a plan-imposed limitation period for commencing a lawsuit after an appeal is denied.  In so ruling, the Court reasoned that not requiring such notice would permit administrators to “hide the ball” because participants are more likely to read and rely on adverse determination letters than lengthy plan documents.  Having found that such notice is required, the Court determined the proper remedy was to set aside the plan’s limitation period and to replace it with the most analogous state law period, which the parties agreed was New Jersey’s six-year limitation period applicable to breach of contract claims.

Proskauer’s Perspective:  Given that three circuits already have ruled consistently on these issues, plan fiduciaries should make sure that administrative appeal denial letters specifically set forth plan-imposed time limits.  Furthermore, given the courts’ tendency not to penalize participants for failure to consult SPDs and plan documents when pursuing a claim for benefits, plan sponsors and administrators should consider whether there is other information pertinent to the claims process to which they should affirmatively alert participants when determining claims for benefits.

Sixth Circuit Enforces Subrogation Clause

Posted in Subrogation/Reimbursement

The Sixth Circuit rejected a participant’s argument that the plan’s subrogation provision was not enforceable because it was only in the plan’s summary plan description, and not in the trust agreement that the participant argued was the operative plan document.  The Court determined that the subrogation provision was contained within a document that served as the summary plan description as well as the plan document.  The Court further ruled that “[n]othing in Amara prevents a document from functioning both as the ERISA plan and as an SPD.”  The Sixth Circuit’s ruling, Board of Trustees of the National Elevator Industry Inc. Health Benefit Plan v. Moore, No. 14-4048, 2015 WL 5010985 (Aug. 25, 2015), is consistent with a recent decision from the Eleventh Circuit, which we previously reported on here.

New Final Regulations and FAQs Provide Guidance on Preventive Services Coverage

Posted in ACA, Affordable Care Act

Through new FAQs and final regulations, the U.S. Departments of Labor (“DOL”), Health and Human Services (“HHS”) and the Treasury (the “Departments”) have further clarified various issues related to the preventive care coverage requirement for non-grandfathered group health plans under the Affordable Care Act (“ACA”) as related to preventive care coverage.


The ACA requires that non-grandfathered group health plans provide benefits for certain preventive care without cost sharing, including:

  • Evidenced-based items or services that have a rating of “A” or “B” in the current recommendations of the United States Preventive Services Task Force (“USPSTF”) for the individual (except for breast cancer screening, mammography, and prevention, where there are updated USPSTF standards);
  • Immunizations for routine use recommended by the Advisory Committee on Immunization Practices (“ACIP”) of the Centers for Disease Control and Prevention (“CDC”) for the individual;
  • For infants, children, and adolescents: evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (“HRSA”); and
  • For women: other evidence-informed preventive care and screening provided for in comprehensive guidelines supported by the HRSA

Continue Reading

New IRS Guidance on 40% Excise Tax Previews Future Regulatory Complexity

Posted in ACA, Affordable Care Act

Although public opposition to the 40% excise tax on high-cost health care is rapidly growing, the IRS continued to develop a regulatory framework for administration of the excise tax through its issuance of Notice 2015-52 on July 30, 2015. Similar to the first notice on this topic, Notice 2015-52 merely identifies various administrative challenges without providing concrete guidance. If nothing else, the new guidance provides another preview into what will undoubtedly be a complex regulatory environment. Continue Reading

Eleventh Circuit Again Affirms Dismissal of Stock Drop Claim Against Delta Air Lines

Posted in Employer Stock Fund

The Eleventh Circuit affirmed dismissal of ERISA breach of fiduciary claims against Delta Air Lines and other alleged plan fiduciaries in connection with a defined contribution plan’s investments in Delta Air Lines stock.   In so ruling, the Court joined a growing number of decisions following Dudenhoeffer that have dismissed claims based on public information. Continue Reading

No Damages Awarded for ERISA Plan Fund Mapping Claims

Posted in Damages

Mapping in a 401(k) plan occurs when an investment option is removed and the participant’s investment in that option is transferred to a different investment option (absent direction from the participant).  On remand from the Eighth Circuit, the district court in Tussey v. ABB Inc., No. 2:06-cv-04305 (W.D. Mo. July 9, 2015), held that plan fiduciaries abused their discretion when they mapped participants’ investments from a balanced fund to the plan trustee’s managed allocation fund.  In so ruling, the court found that the trustee and plan sponsor had entered into an improper cross-subsidization agreement whereby the trustee was paid above-market rates for providing services to the plan in exchange for providing various administrative services to the plan sponsor at a loss.  As a result of this conflict, Continue Reading