Successful Pleading Challenges to Parity Act Claims Regarding Wilderness Treatment

Wilderness therapy, also referred to as outdoor behavioral healthcare, is a treatment modality that uses expeditions into the wilderness as a means of addressing behavioral and mental health issues. Claims that health plans pay for wilderness therapy have been denied for various reasons, including the lack of accreditation of the program or licensing of the providers, or that the treatment is not medically necessary.

In the majority of recent wilderness therapy coverage suits, plaintiffs allege wilderness program exclusions violate the Mental Health Parity and Addiction Equity Act (“Parity Act”). Several recent district court decisions provide guidance on whether the criteria used to deny coverage of “wilderness programs” may be considered a potential Parity Act violation. Continue Reading

Sixth Circuit Finds No Fiduciary Duty To Give Notice Of Conversion/Portability Rights On Termination Of Employment

In Vest v. Resolute FP US, Inc., 905 F.3d 985 (6th Cir. 2018), the Sixth Circuit Court of Appeals upheld dismissal of a claim by the beneficiary of a deceased employee that the employer breached its fiduciary duty under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3) by failing to notify the decedent of his right to port or convert his group life insurance coverage to an individual life insurance policy after he ceased active employment. Continue Reading

Could We See Retirement Reform in a Lame Duck Congress?

As we approach the end of the year and mid-term elections, expectations for meaningful policy from a lame duck Congress are at a record low. Surprisingly, however, the earlier passage of the Tax Cuts and Jobs Act (commonly referred to as “Tax Reform”) resulted in an unsettled desire among those in the U.S. House of Representatives and U.S. Senate to accomplish something rare – bipartisan legislation improving retirement and savings for millions of Americans.

The two pieces of legislation that have bipartisan support are the Retirement Enhancement and Savings Act (RESA) and the Family Savings Act of 2018 (FSA). Continue Reading

Second Circuit Speaks On When Ministerial Acts Can Breach a Fiduciary Duty

The Second Circuit recently held that alleged misrepresentations by a “ministerial” plan representative about plan benefits will not support a claim for breach of fiduciary duty if the SPD clearly provides “complete and accurate” information, but might support a claim for breach of fiduciary duty if the SPD does not.  In re DeRogatis, 16-977-cv, 16-3549-cv (2d Cir. Sept. 14, 2018) (slip op.).

Petitioner’s Claim

Emily DeRogatis brought two lawsuits concerning benefits under her deceased husband’s pension and health plans. She claimed that two plan employees provided inaccurate information about her husband’s eligibility for, and the amount of, survivor benefits payable under the pension plan, and the impact of early retirement on health benefits under the welfare plan. Continue Reading

ERISA Does Not Preempt Third Party Providers’ Unfair And Deceptive Business Practice Claims Against Health Insurer, Rules Ninth Circuit

In Hansen v. Group Health Cooperative, 2018 U.S. App. LEXIS 25033, (9th Cir. Sep. 4, 2018), two psychotherapists (“Providers”) sued Group Health Cooperative (“GHC”) in Washington state court, alleging GHC engaged in unfair and deceptive practices, in violation of Washington’s Consumer Protection Act.

The Providers claimed that GHC engaged in unfair and deceptive business practices by utilizing so-called Milliman Care Guidelines as its primary and exclusive criteria for authorizing mental health treatment. The problem with GHC’s use of these guidelines, according to the Providers, was that they:  (1) were intrinsically biased against mental healthcare, (2) were utilized to avoid paying for mental healthcare required by Washington’s Mental Health Parity Act, and (3) enabled GHC to unfairly compete by employing its own psychotherapists and discouraging patients from seeking treatment from rival practitioners. Continue Reading

New Case Gives Guidance on Video Surveillance in Disability Cases

Video surveillance can be an extremely effective tool in making disability benefits determinations.  Historically, courts have cautioned that the weight given to surveillance in these cases depends both on the amount and nature of the activity observed. A recent ERISA case out of the Western District of Tennessee provides insurers with guidance on the use of video surveillance in disability benefits decisions. The case is Eaton v. Reliance Standard Life Ins. Co., No. 2:16-cv-02764-TLP-cgc, 2018 U.S. Dist. LEXIS 127488, at *1 (W.D. Tenn. July 31, 2018). Continue Reading

Ninth Circuit Holds That Employees’ ERISA Breach of Fiduciary Duty Claim Against Their Employer is Not Subject to the Mandatory Arbitration Clause in Their Employment Contracts

In Munro v. University of Southern California, No. 17-55550, 2018 U.S. App. LEXIS 20522 (9th Cir. July 24, 2018), the U.S. Court of Appeals for the Ninth Circuit held that employees alleging an ERISA breach of fiduciary duty claim against their employer based on the employer’s administration of defined-contribution plans may not be compelled to arbitrate their collective claims under the terms of the arbitration clause in their employment contracts because their claims were brought on behalf of the plans and not on their own behalf.

The lawsuit was brought by nine current and former USC employees. The employees alleged that USC breached its fiduciary duty under ERISA in administering two defined-contribution plans – the USC Retirement Savings Program and the USC Tax-Deferred Annuity Plan (the “Plans”). The employees sought financial and equitable remedies to benefit the Plans and all affected participants and beneficiaries, including “a determination as to the method of calculating losses, removal of breaching fiduciaries, a full accounting of Plan losses, reformation of the Plans, and an order regarding appropriate future investments.” Continue Reading

Court Awards Pre-Judgment Interest To Kentucky Plaintiff at Massachusetts State Rate but Declines Boston Attorney Rates for Kentucky Lawyer

In Gross v. Sun Life Assur. Co. of Can., No. 09-11678-RWZ, 2018 U.S. Dist. LEXIS 107918 (D. Mass. June 28, 2018), a District Court decided the appropriate prejudgment interest rate for a Kentucky resident was the Massachusetts prejudgment rate (12 percent) rather than the federal rate at the time (.37 percent). The District Court awarded attorney’s fees in the amount of $625 per hour for Plaintiff’s Boston lawyer but refused to increase the rate for Plaintiff’s Kentucky lawyer in accordance with the Boston market rate. The Court also refused to compensate the Kentucky lawyer for work performed during the phases of litigation “infected” by misconduct.   Continue Reading

Court Upholds Dismissal of Breach of Fiduciary Claim, Finding Plaintiff Had an Adequate Remedy Under ERISA § 501(a)(1)(B)

On July 3, 2018, a District Court in Alabama upheld, on reconsideration, its initial decision to dismiss a plaintiff’s breach of fiduciary duty claim under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), finding that ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), provided the plaintiff with an adequate remedy. This decision adds to the growing amount of case law regarding whether—and when—a breach of fiduciary duty claim should be dismissed in benefit claim litigation. Continue Reading

To Sue Or Not To Sue Under ERISA: Circuit Split about Proper Party Defendants and Service of Process May Be Resolved

The Colorado Supreme Court’s decisions upholding the dismissal of claims against two separate disability plans under ERISA may be under review by the Supreme Court, following submission of the joint petition for a writ of certiorari filed in Olivar v. Public Serv. Employee Credit Union Long Term Disability Plan and Burton v. Colorado Access a/k/a Colorado Access Long Term Disability Plan, No. 17-1543. Continue Reading

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