In ERISAland, attorneys’ fees are infrequently awarded to defendants for having to defend themselves in a matter involving a denial of disability benefits. This week’s notable decision, Hackney v. Allmed Healthcare Management, Inc., No. 3:15-CV-00075-GFVT, 2018 WL 1981902 (E.D. Ky. Apr. 27, 2018), is one of those infrequent and disappointing cases where the court orders an unsuccessful plaintiff to pay the defendant five figures in attorneys’ fees and costs. And all because the plaintiff pushed the envelope in pursuing a cause of action not generally recognized as available under ERISA.
Continue Reading Court Orders Unsuccessful Claimant to Pay Third-Party Administrator’s Attorneys’ Fees in Lawsuit Preempted by ERISA
Court Enforces Suicide Exclusion In Group Life Insurance Policy Despite Insured’s Prior Coverage
This week’s notable decision results from a series of unfortunate events. It also highlights an issue plan administrators and participants should be aware of when there is a switch of group life insurance policies. In Cole v. American Heritage Life Insurance Company, No. 3:17-CV-494-PPS, 2018 WL 1875632 (N.D. Ind. Apr. 18, 2018), the district court enforced Defendant American Heritage Life Insurance Company’s group life insurance policy’s Suicide Exclusion in order to deny benefits for the life of Plaintiff’s deceased husband. The Suicide Exclusion limits benefits to the amount of premiums paid if the insured commits suicide within 2 years of the certification date. In this case, the insured committed suicide on January 2, 2016, one day after the American Heritage policy went into effect on January 1, 2016. This seems cut and dry, except for one fact: the insured was covered under the employer’s life insurance group policy offered by a different insurance company, Lincoln National, from January 1, 2014 until January 1, 2016. That policy did not contain a suicide exclusion.
Continue Reading Court Enforces Suicide Exclusion In Group Life Insurance Policy Despite Insured’s Prior Coverage
Expectation of Future Salary Increases Is Not An “Accrued Benefit” for Purposes of Anti-Cutback Rule
This week’s notable decision is Teufel v. Northern Trust Co., No. 17-1676, __F.3d__, 2018 WL 1734700 (7th Cir. Apr. 11, 2018). In Teufel, the Seventh Circuit considered whether an amendment to the Northern Trust pension plan decreased Teufel’s accrued benefit and harmed older workers relative to younger ones, in violation of ERISA’s anti-cutback rule and the Age Discrimination in Employment Act (ADEA).
The gist of the amendment is as follows: In 2012, Northern Trust changed its pension plan from a defined-benefit plan under which retirement income depended on years worked, times an average of each employee’s five highest-earning consecutive years, times a constant (“Traditional formula”) to a new PEP formula that multiplies the years worked and the high average compensation not by a constant but by a formula that depends on the number of years worked after 2012. The parties agree that it reduces the pension-accrual rate. For people hired before 2002, Northern Trust provided a transitional benefit that treated them as if they were still under the Traditional formula except that it would deem their salaries as increasing at 1.5% per year, without regard to the actual rate of change in their compensation.
Continue Reading Expectation of Future Salary Increases Is Not An “Accrued Benefit” for Purposes of Anti-Cutback Rule