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Proskauer's ERISA Practice Center Blog

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

ERISA Participant’s Supplemental Submission Doesn’t Restart Exhaustion Clock

Posted in Benefit Claims, Exhaustion of Administrative Remedies

A federal district court in New Jersey held that supplemental documentation submitted by a participant in connection with the claims review process did not restart the clock for a claims administrator to decide the participant’s appeal.  Plaintiff Tracee Lewis-Burroughs timely appealed Prudential Insurance Company of America’s decision to stop paying her long-term disability benefits. Continue Reading

U.S. Supreme Court Sends ERISA Investment Fee Case Back For Further Review

Posted in 401(k) Plans

Today, the U.S. Supreme Court ruled that an ERISA plan participant may allege that a plan fiduciary breached the duty of prudence by not properly monitoring the plan’s investment options as long as the alleged breach of the continuing duty occurred within six years of the suit. Continue Reading

Third Circuit: Catalyst Theory of Recovery Applies to ERISA Fee Award

Posted in Attorneys' Fees

The Third Circuit held that the catalyst theory of recovery applies to ERISA cases when determining whether to award attorneys’ fees.  In this case, Plaintiffs (two individuals and two pharmacies) filed suit against Defendant insurance companies for denial of benefits under ERISA.  After their motion to dismiss was denied, Defendants paid the claims in full.  Both parties then sought attorneys’ fees and costs, which the district court denied.  The Third Circuit affirmed the district court’s decision to deny fees, but remanded on the issue of whether Plaintiffs were entitled to interest on the delayed payment of benefits.  Ultimately, the Defendants agreed to pay $68,000 in interest to Plaintiffs and the case settled.  Continue Reading

IRS Chief Counsel Memorandum Clarifies that Correction of Section 409A Failures in Year of Vesting Will Not Shield Income Inclusion Under 409A

Posted in IRS

Earlier this month, the Office of Chief Counsel of the Internal Revenue Service released a Memorandum clarifying the impact of a correction of a Code Section 409A operational failure before the date of vesting of nonqualified deferred compensation but during the year of vesting.  In the Chief Counsel Memorandum, the IRS clarified that such a correction, under such circumstances, would not avoid income inclusion under Code Section 409A.  Continue Reading

Second Circuit Affirms Dismissal of ERISA Stock Drop Claims

Posted in Stock Drop

The Second Circuit recently affirmed the dismissal of an ERISA stock drop class action because, like the district court, it held that Named Plaintiff Debra Taveras lacked constitutional standing to pursue her claims.  Taveras alleged that defendants, which included UBS and a number of individuals, breached their fiduciary duties by maintaining the company stock fund as an investment option in the UBS Savings and Investment Plan.  As relevant here, Taveras’s complaint alleged that “[a]s a direct and proximate result of the breaches of fiduciary duties alleged [in the complaint], the Plans, and indirectly Plaintiffs and the Plans’ other Participants and beneficiaries, lost a significant portion of their investments.” Continue Reading

Changes to the IRS Determination Letter Program

Posted in IRS, Retirement Plans

The IRS has informally stated that it is intending to make some significant changes to the Determination Letter program, and is even considering eliminating the program for individually designed retirement plans (other than perhaps initial and final determination letters).  The agency apparently is looking to streamline its operations and focus its resources on other areas.  Guidance is expected later this summer, along with a request for comments.

MHPA Class Action Settlement

Posted in Mental Health Parity

A federal district court in Washington recently granted preliminary approval to a $6 million settlement of a mental health parity class action suit against Regence Blueshield.  Plaintiffs claimed that defendants routinely excluded and limited coverage of the essential therapies to treat children with developmental disabilities.  A fairness hearing is scheduled for September 11, 2015.  The case is K.M. v. Regence Blueshield, No. 13-1214 (W.D. Wash. Apr. 22, 2015).

First Circuit Reviews Top Hat Plan Benefits Denial for Abuse of Discretion

Posted in Top Hat Plans

The First Circuit recently applied an abuse of discretion standard of review to a claim for top hat plan benefits. Plaintiff Robert Niebauer, a former executive of Crane, brought a claim for executive severance plan benefits and a claim under ERISA section 510 for interference with his rights to benefits.  The district court granted summary judgment in favor of Crane on both claims, finding that the denial was not arbitrary or capricious, and there was no adverse employment action to support his interference claim.  Continue Reading

EEOC’s Proposed Wellness Regulations Add Burdensome Notice Requirement; Still Prohibit Mandatory HRAs

Posted in Affordable Care Act, Wellness Programs

On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) released proposed regulations covering wellness programs that involve disability-related inquiries or medical examinations.  The release of the proposed regulations follows months of EEOC enforcement actions against employers alleging that wellness programs sponsored by the employers violated the Americans with Disabilities Act (ADA) despite compliance with 2013 regulations jointly issued by the Department of Labor (DOL), the Department of the Treasury (Treasury) and the Department of Health and Human Services (HHS) that permitted such programs under ERISA and the Affordable Care Act (ACA).  With a few notable exceptions (described below), the proposed regulations are somewhat consistent with the existing DOL guidance on employer-sponsored wellness programs.  However, the EEOC has requested comments on multiple topics that could significantly alter the regulatory requirements. Continue Reading

New California Paid Sick Leave Requirements Effective July 1, 2015

Posted in California Laws

Beginning July 1, 2015, California employers will be required to grant paid sick leave to nearly all California employees in compliance with California’s new paid sick leave law, the Healthy Workplaces, Healthy Families Act of 2014.  The law applies to all employers who employ at least one employee who works in California for at least 30 days in a given year, and covers any such employee, including part-time, temporary, and/or seasonal employees.  The law includes rules regarding accrual rates, carryover of unused time, usage, payment (including amounts and timing), notices to employees, workplace posters, recordkeeping and retaliation.

For more information on the requirements of the new California law, please refer to our California Employment Law Blog.

You may also learn more about the law and how to manage implementation in our upcoming webinar on April 29, 2015.