This week’s notable decision involves the denied long-term disability dispute in Hennen v. Metropolitan Life Insurance Company, No. 17-3080, __F.3d__, 2018 WL 4376994 (7th Cir. Sept. 14, 2018). The Seventh Circuit overturned the grant of summary judgment to MetLife and remanded the case to MetLife for further proceedings. The dispute centers on MetLife’s application of its “neuromusculoskeletal and soft tissue disorders” provision, which limits payment for disabilities caused by these conditions to just twenty-four months. Exceptions to this limitation are disabilities caused by radiculopathy. MetLife defined radiculopathy as “Disease of the peripheral nerve roots supported by objective clinical findings of nerve pathology.”
Continue Reading Seventh Circuit Questions MetLife’s Interpretation of Neuromusculoskeletal Limitation in Long Term Disability Plan
Circuit Courts Tackle Issues of First Impression and Preemption
Good morning, ERISA Watchers! Last week was quite a busy week with notable Circuit Court decisions. In Hager v. DBG Partners, Inc., No. 17-11147, __F.3d__, 2018 WL 4258968 (5th Cir. Sept. 6, 2018), the court addressed an issue of first impression for the Fifth Circuit concerning the availability of a remedy for a COBRA notice violation. The court determined that payment of all medical expenses is compensatory damages which is not available under ERISA Section 502(a)(3). But, a penalty is available under Section 502(c)(1) and the court could “discern no barrier to the court awarding the amount of [the participant’s] medical expenses as a penalty.” The court remanded the case to the district court to determine whether to award a penalty and the amount of such penalty.
Continue Reading Circuit Courts Tackle Issues of First Impression and Preemption
Sixth Circuit Rules That Indian Tribe Can Pursue Breach of Fiduciary Duty Claim Against Health Plan Administrator
This week’s notable decision is the Sixth Circuit’s most recent decision in Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan, No. 17-1932, __F’Appx__ (6th Cir. Aug. 30, 2018), one of many cases against BCBSM for charging its self-funded customers hidden administrative fees. The Tribe maintained two self-insured policies with BCBSM, one covered tribal members (“Member Policy”) and the other covered tribal employees (“Employee Policy”).
In 2014, the Sixth Circuit affirmed the district court’s ruling that Defendant BCBSM violated ERISA by increasing its customer’s hospital claims with hidden administrative surcharges. See Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, 751 F.3d 740 (6th Cir. 2014). In this case, in addition to the undisclosed administrative fees claim at issue in Hi-Lex, the Tribe also alleged that BCBSM violated its fiduciary duties under ERISA by failing to take advantage of federal regulations that permit Indian Tribes to pay reduced services provided by Medicare-participating hospitals and that BCBSM charged hidden fees as part of the company’s Physician Group Incentive Program (“PGIP”).
Continue Reading Sixth Circuit Rules That Indian Tribe Can Pursue Breach of Fiduciary Duty Claim Against Health Plan Administrator