This week’s notable decision is Black v. Pension Benefit Guar. Corp., No. 19-1419, __ F.3d __, 2020 WL 5201400 (6th Cir. Sept. 1, 2020). Plaintiffs in this case were retirees of Delphi Corporation, an automotive parts supplier and former subsidiary of General Motors. In 2005, Delphi filed for bankruptcy and sought to terminate its pension benefit plan for its salaried workers, including Plaintiffs. The Pension Benefit Guaranty Corporation (“PBGC”) then stepped in and notified Delphi that while it agreed the plan should be terminated, it would seek to be appointed as statutory trustee of the plan. PBGC filed a new civil action to adjudicate termination and transfer of the plan. The bankruptcy court then confirmed Delphi’s bankruptcy plan, which terminated the pension plan. PBGC responded by voluntarily dismissing its civil action, after which it reached a termination and trusteeship agreement with Delphi.
Continue Reading Sixth Circuit Rules in Favor of PBGC in Dispute over Termination of Delphi Corporation’s Pension Plan
Sixth Circuit Holds Exhaustion of Administrative Remedies Not Required Where Plan Document Is Silent on Claims Review Process
Good morning, ERISA Watchers! I hope this finds you well and in good spirits. This week’s notable decision, Wallace v. Oakwood Healthcare, Inc., No. 18-2316, __F.3d__, 2020 WL 1522833 (6th Cir. Mar. 31, 2020), involves something we might all be feeling these days: exhaustion.
Wallace involves a challenge to a denied long-term disability benefit claim. Plaintiff was a registered nurse who was a participant in an ERISA-governed employee welfare benefit plan sponsored by her employer (“the Plan”). She stopped working in 2012 while the Plan was insured by Hartford Life & Accident Insurance Company. On January 1, 2013, the Plan shifted its contract to Reliance Standard. Plaintiff tried to return to work in 2013, but quickly went back on medical leave. She subsequently submitted a claim for benefits to Reliance, who denied it on the ground that she had a pre-existing condition that barred coverage. Plaintiff also submitted a claim to Hartford, who denied that as well. She appealed the Hartford denial, but did not appeal the Reliance denial before filing suit against Reliance.
Continue Reading Sixth Circuit Holds Exhaustion of Administrative Remedies Not Required Where Plan Document Is Silent on Claims Review Process
Fifth Circuit Rules in Favor of Cigna in Dispute with Out-of-Network Provider Over Patients’ Coinsurance Obligations
This week’s notable decision is North Cypress Med. Ctr. Operating Co., Ltd. v. Cigna Healthcare, No. 18-20576, __ F.3d __, 2020 WL 1291590 (5th Cir. Mar. 19, 2020), where the Fifth Circuit, in the case’s second trip to the Court of Appeals, ruled in favor of Cigna in its dispute with an out-of-network healthcare provider.
This is an action by a hospital against Cigna for the alleged underpayment of more than $40 million in benefit claims assigned to the hospital by Cigna insureds. The dispute revolved around North Cypress’ billing approach. In order to encourage prompt payment by its patients, the hospital offered to reduce the patients’ coinsurance obligations—even if their treatment was out-of-network—if they paid a certain amount of their bill within 120 days. Under this approach, out-of-network patients received a significant discount, North Cypress incurred lower collection costs, and meanwhile Cigna’s payment obligation remained the same.
Continue Reading Fifth Circuit Rules in Favor of Cigna in Dispute with Out-of-Network Provider Over Patients’ Coinsurance Obligations