The U.S. Supreme Court recently declined to grant certiorari to review the Fourth Circuit’s decision in RJR Pension Investment, et al. v. Tatum, 761 F.3d 363 (4th Cir. 2014). As we previously reported here, a divided panel of the Fourth Circuit held that, because the plaintiff proved that the plan fiduciaries acted imprudently by liquidating … Continue Reading
Three years ago, the U.S. Supreme Court identified three forms of appropriate equitable relief — reformation, equitable estoppel and surcharge — that are available under Section 502(a)(3) of the Employee Retirement Income Security Act (‘‘ERISA’’). See Cigna Corp. v. Amara, 131 S. Ct. 1866, 50 EBC 2569, 2011 BL 128629 (2011). This article focuses on the availability of surcharge and, in particular, … Continue Reading
Twenty-five years ago, the U.S. Supreme Court ruled that courts should review an ERISA participant’s claim for benefits under a de novo standard of review unless the plan gives the plan fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Since then, courts have considered what type of … Continue Reading
On Thursday, September 18, 2014, the Internal Revenue Service (“IRS”) released Notice 2014-55, which expands the cafeteria plan “change in status” rules to allow plans to offer employees an option to revoke their elections for employer-sponsored health coverage to purchase a qualified health plan through a Health Insurance Marketplace (“Marketplace”). The notice is effective immediately … Continue Reading
“As for those who might contemplate future service as plan fiduciaries, all I can say is: Good luck.” That was the sentiment expressed in a blistering dissent by Fourth Circuit Judge J. Harvie Wilkinson in the latest ruling in a lawsuit challenging the decision by the fiduicaries of the RJR 401(k) plan to liquidate two … Continue Reading
Pension plan overpayments to participants and their beneficiaries are an all-too-common occurrence. When overpayments occur, a plan administrator’s duties are fairly clear. Typically, the plan administrator must seek repayment of the overpayment, plus interest, from the affected individuals, and if recovery from the individuals cannot be completed, recovery must be sought from the employer or … Continue Reading
For over two decades, federal courts have embraced the so-called Moench presumption of prudence in ERISA stock-drop cases. Pursuant to that presumption, courts have routinely dismissed such claims absent allegations in a complaint that a company’s situation was dire, or that the company was on the brink of collapse. On June 25,2014, the U.S. Supreme … Continue Reading
In Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund, 2012 WL 5197117 (D. Mass. Oct. 18, 2012), a federal district court in Massachusetts concluded that a private equity fund was not a “trade or business” subject to the imposition of withdrawal liability and thus was not responsible for paying … Continue Reading
On April 23rd, the DOL, HHS and IRS (the “Agencies”) released an updated template for the Summary of Benefits and Coverage (“SBC”) that group health plans and issuers are required to send to plan participants. This updated SBC is the template to be used by plan sponsors and issuers to comply with the SBC requirements … Continue Reading
The US Departments of Labor, Health and Human Services (HHS), and the Treasury (the “Agencies”) jointly issued yesterday a document entitled “FAQs about the Affordable Care Act Implementation Part XV” (“FAQs”) addressing four issues of concern with respect to implementation of the Affordable Care Act (“ACA”) by group health plans and health insurers offering group … Continue Reading
On April 18, 2013, PBGC filed a complaint (PBGC v. Saint-Gobain Corp. Benefits Comm., E.D. Pa. Case No. 13-02069) to involuntarily terminate a defined benefit plan sponsored by Saint-Gobain Containers, Inc. before Ardagh Group, S.A. acquires Saint-Gobain through a share purchase. PBGC alleges that the plan is underfunded by approximately $523.7 million and that the … Continue Reading
On March 28, 2013, the IRS issued Revenue Procedure 2013-22 which establishes a program for the IRS to accept applications for opinion and advisory letters for 403(b) prototype plans and 403(b) volume submitter plans, respectively, starting June 28, 2013. The new program is similar to the pre-approved plan program maintained by the IRS for tax-qualified … Continue Reading
What happens if a tax-exempt organization becomes ineligible to sponsor a Section 403(b) Plan because it loses its exempt status under Internal Revenue Code Section 501(c)(3)? As an example, loss of tax-exempt status may occur automatically if the organization fails to file an annual Form 990 information return for three consecutive years. It may also … Continue Reading
Final Internal Revenue Code Section 403(b) regulations, which became effective January 1, 2009, require that plan sponsors adopt written 403(b) Plan documents. A 403(b) Plan is a form of defined contribution retirement plan that may only be offered by employers that are tax-exempt entities under Section 501(c)(3) of the Internal Revenue Code or that are … Continue Reading
The U.S. Supreme Court recently ruled in Comcast Corp. v. Behrend, 2013 WL 1222646 (U.S. Mar. 27, 2013) that, in order to obtain class certification, plaintiffs carry the burden of establishing not only that they have proof of classwide liability, but also that their potential damages are tied to their theory of liability and capable … Continue Reading
In Weaver Bros. Ins. Assoc., Inc. v. Braunstein, No. 11-5407, 2013 WL 1195529 (E.D. Pa. Mar. 25, 2013), a district court denied the plan administrator’s motion for judgment on the pleadings, ruling that monetary relief may be available for ERISA violations associated with the plan administrator’s failure to properly communicate the participant’s benefit rights following … Continue Reading
Last Friday, employers contributing to multiemployer plans received some good news. As expected, the Internal Revenue Service amended the transition rule for 2014 originally set forth in its proposed regulations on the pay or play mandate. (The new text of the rule can be found here). An employer required by a collective bargaining agreement to contribute to … Continue Reading
Despite the clear support for employers’ continued and expansive use of wellness programs as a means of promoting health and preventing disease expressed in the Affordable Care Act and the recently-proposed rules implementing and expanding employment-based wellness programs [http://www.proskauer.com/publications/client-alert/new-guidance-on-wellness-programs-issued/], the Equal Employment Opportunity Commission (“EEOC”) has still not provided more definitive guidance on permissible incentives … Continue Reading
Recognizing that expatriate group health plans may find it impossible, or nearly impossible, to comply with all of the relevant provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA), the U.S. Labor Department, the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury Department have recently released a joint … Continue Reading
In Yox v. Providence Health Plan, No. 12–cv–01348, 2013 WL 865968 (D. Or. Mar. 8, 2013), a federal district court held that the review of benefit denials by an independent review organization (IRO) is not akin to an arbitration proceeding, and thus did not preclude a plan participant from seeking judicial review under ERISA of … Continue Reading
Background The U.S. Court of Appeals for the Second Circuit recently joined the U.S. Courts of Appeals for the Seventh and Eleventh Circuits in concluding that Employee Retirement Income Security Act plan participants are not required to exhaust their administrative remedies when “they reasonably interpret the plan terms not to require exhaustion.” Applying this principle, … Continue Reading
The First Circuit recently split from the Fourth Circuit in concluding that, absent clear plan language to the contrary, the risk of relapsing into addiction can constitute a current disability under a long-term disability plan. Colby v. Union Sec. Ins. Co., Civ. A. No. 11-2270, 2013 WL 174419 (1st Cir. Jan. 17, 2013). Welfare plan … Continue Reading
Under ERISA, plan participants and beneficiaries have the right to obtain information pertaining to their benefit entitlements and the operation of the plans in which they participate. Sometimes these rights compromise the protections of the attorney-client privilege. Under the fiduciary exception, “an employer acting in the capacity of ERISA fiduciary is disabled from asserting the … Continue Reading
As employers look to trim retiree medical obligations, they are considering whether to establish health reimbursement arrangements (HRAs) for retirees to buy insurance from insurance exchanges established under the Patient Protection and Affordable Care Act (PPACA)—a so-called “soft landing.” The exchanges raise new issues, however, that require close consideration. Employer-provided retiree medical coverage has been … Continue Reading
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