Happy Monday, ERISA Watchers! Today’s notable decision is a good one on equitable remedies, made possible by CIGNA Corp. v. Amara, 563 U.S. 421 (2011). In Snitselaar v. Unum Life Insurance Company of America, 2019 WL 279995 (N.D. Iowa Jan. 22, 2019), Unum denied Snitselaar’s claim for dependent life insurance benefits on the life of her ex-husband, Gerard, who died about three months following the finalization of their divorce. Unum found that Gerard was no longer an eligible dependent under the terms of the Plan as of the date of the divorce. Snitselaar claimed that when she signed up for the life insurance benefits, she was informed that they could not lose the insurance for life changes after the two-year waiting period and they were never informed about divorce affecting the policy. In addition, the life insurance premiums continued to be deducted from her paychecks after the divorce and even after Gerard’s death. Snitselaar also claimed that neither she nor Gerard were informed of their right to convert to an individual life policy without evidence of insurability after the divorce was finalized.
Continue Reading Employer Must Pay Dependent Life Insurance Benefits to Employee Due to Failure to Provide Summary Plan Description
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
Plaintiffs Fully Defeat Five Motions To Dismiss ESOP Class Action
This week’s notable decision, Hurtado et al. v. Rainbow Disposal Co., No. 8:17-CV-01605-JLS-DFM, 2018 WL 3372752 (C.D. Cal. July 9, 2018), is a victory for ESOP plan participants, one that you don’t see too often these days.
This putative ERISA class action concerns a 2014 transaction in which waste management giant Republic Services bought Rainbow for $112 million in cash plus other consideration, according to documents filed with the SEC. Yet according to separate documents filed with the DOL and IRS, the ESOP (which had owned 100% of Rainbow before the sale) received either $50.8 million or $48.8 million for its Rainbow stock. Of the $50.8 million or $48.8 million initially received, the ESOP did not initially distribute approximately $15 million which was held for nearly three years invested in treasuries yielding virtually no investment returns.
Continue Reading Plaintiffs Fully Defeat Five Motions To Dismiss ESOP Class Action