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

Today’s notable decision is the D.C. Circuit decision in Lewis, et al. v. Pension Benefit Guaranty Corporation, No. 17-5068, __F.3d__, 2018 WL 4000484 (D.C. Cir. Aug. 21, 2018).  

The gist is that Delta and the PBGC agreed to terminate the Delta Pilots Retirement Plan (“the Plan”) because the Plan had insufficient assets to support the retirement benefits promised to the pilots.  The PBGC became the statutory trustee to collect the Plan’s remaining assets and make the promised payments according to a list of statutory priorities.  Unfortunately, it took six years for the Corporation to finish making final benefit determinations.  The pilots claim that the PBGC breached its fiduciary duties in a number of ways which enabled it to control Plan assets for a longer period and collect massive investment returns.  Continue Reading Pension Plan Participants Cannot Seek Disgorgement of Post-Termination Investment Gains Resulting from PBGC’s Alleged Fiduciary Breach

Good morning, ERISA Watchers!  Hope you all survived the Mercury retrograde, which I’m convinced brought about the last two terrible notable decisions out of the Fourth Circuit.  This week I want to take a moment to highlight two decisions from the Sixth Circuit Court of Appeals.  Unfortunately, these opinions are not great for plan participants either, except for a little nugget from Springer v. Cleveland Clinic Employee Health Plan Total Care, No. 17-4181, __F.3d__, 2018 WL 3849376 (6th Cir. Aug. 14, 2018).  

In Springer, the plan administrator denied the plan participant’s claim for coverage for air ambulance transportation because he did not seek preauthorization.  On the upside, the Sixth Circuit affirmed the district court’s determination that the plaintiff has standing to bring his claim despite the failure to allege a financial loss.  The court noted that “[e]very circuit court to consider this issue agrees that a plaintiff in Springer’s shoes does not need to suffer financial loss. Continue Reading Sixth Circuit Joins Sister Circuits: Denial of Plan Benefits Confers Standing Even If Not Billed Directly for Medical Services