Photo of Patrick Begos

Mr. Begos has nearly 30 years of commercial and insurance litigation, arbitration, mediation and negotiation experience, representing companies and individuals in a wide array of industries. He has a national reputation in handling litigation under the Employee Retirement Income Security Act (ERISA) and, in particular, denial of group benefits claims. Mr. Begos has litigated hundreds of ERISA cases and has been involved in shaping the development of ERISA law across the country. He is a regular speaker at ERISA and insurance conferences around the country and has written extensively for various nationwide publications. Read his full rc.com bio here.

Though there are many legal complexities that can arise in a typical ERISA lawsuit, one thing that is typically not in dispute is whether there is an ERISA Plan at issue. Pension plans, 401(k) plans, health plans, and group insurance plans are all easy to spot, categorize and confirm as ERISA plans. There are outliers, to be sure, like when the plan is established or maintained by a possibly exempt employer (like a religious organization, community college,  or Native American tribe). Or when the plan allows employees to purchase individual insurance policies at a discount. Or when the dispute involves a severance plan, as is demonstrated by Atkins v. CB&I, L.L.C., No. 20-30004, 2021 WL 1085807 (5th Cir. Mar. 22, 2021).

In Atkins, the defendant construction company established a Project Completion Incentive Plan (“PCIP”) that would pay eligible employees a bonus of 5% of their earnings while they worked on a particular construction project, if they stayed on the project until their work was completed. The plaintiffs, who acknowledged that they were not eligible for bonuses because they quit before their work on the project ended, sued in Louisiana state court, arguing that the PCIP involved a wage forfeiture that was illegal under Louisiana law. The employer removed the case to federal court on the grounds of ERISA complete preemption, and the district court agreed that ERISA governed. As the Fifth Circuit noted, “[t]hat jurisdictional determination also resolved the merits” because, if ERISA governs, “then everyone agrees the Plaintiffs do not have a claim” because ERISA preempts Louisiana law, and because the plaintiffs “are not eligible for the bonus under the terms of the plan.”

The Fifth Circuit held that the PCIP was not an ERISA plan.
Continue Reading When is a Severance Plan NOT an ERISA Plan

In Connecticut General Life Ins. Co. v. BioHealth Labs., Inc., No. 20-2312-CV,  — F.3d –, 2021 WL 476111 (2d Cir. Feb. 10, 2021), Cigna, as administrator of employee health plans, sued six  out-of-network lab companies for various fraudulent billing schemes, including fee forgiveness (not charging the patient for co-insurance, co-pays, etc.), unnecessary testing, and unbundling (separately billing for services that should be combined at a lower rate). In all, Cigna sought to recover $17 million in fraudulent or improper charges.

Cigna had completed its investigation that uncovered the alleged fraud in 2015, and began to deny payment of claims submitted by the labs. Two of the labs sued Cigna in Florida, but that action was dismissed and closed in 2017 for failure to exhaust administrative remedies. Cigna then sued the labs in Connecticut District Court in 2019, asserting “a variety of Connecticut state-law and federal claims,” all of which, according to Cigna, would have been compulsory counterclaims in the Florida action, had it not been dismissed. The district court dismissed the Connecticut complaint on the ground that all claims were time-barred under Connecticut’s three-year statute of limitations for tort claims.

The Second Circuit affirmed in part and reversed in part.
Continue Reading Second Circuit Addresses Limitations Periods Governing Fraudulent Billing Claims Against Non-Participating Providers

On February 26, 2021, the Employee Benefits Security Administration (EBSA) released Notice 2021-01 (2021 Relief Notice) providing guidance to employers, claim administrators and fiduciaries of ERISA plans on the duration of the COVID-19-related relief set forth in a 2020 Notice that suspended, among other things, certain ERISA (Employee Retirement Income Security Act) claim-related deadlines (referred

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master — that’s all.”

Lewis Carroll, Through the Looking Glass.

Disputes over the meaning of a word or phrase in an insured benefit plan almost always end up with the litigants feeling like they have gone through the looking glass to a place where the words you thought you understood all your life suddenly mean something entirely different.

The most recent example of this phenomenon is Carlile v. Reliance Std. Life Ins. Co., — F.3d –, 2021 WL 671582 (10th Cir, Feb. 22, 2021), where the dispute revolved around whether Mr. Carlile was an “active, Full-time Employee” when he became disabled.

Mr. Carlile had worked for the disability plan sponsor for about four years when he was given notice in March 2016, that he was being laid off as part of a reduction in force effective June 20, 2016. Accompanying the notice was a lump-sum payment of his wages for the notice period, and the confirmation that he no longer needed to come into work. Apparently, though, he continued to visit the office “at his convenience” until he was diagnosed with prostate cancer on May 31, 2016. Apparently his “last day of work” (whatever that means) was June 7, 2016. He filed a claim for LTD benefits, which Reliance Standard denied, finding that Mr. Carlile’s participation in the disability plan had terminated before June 7, because he was no longer an “active, Full-time Employee.”

Follow us through the looking glass as we watch the Tenth Circuit explore: why the meaning of “active, Full-time Employee” is not influenced at all by the plan’s definitions of “Actively at Work” or “Active Work;” why the court’s own prior decision defining “actively at work full time” in a similar context supported Reliance only “at first glance”; and why determining how much an employee worked during his “regular work week” apparently does not require proof of how much the employee ever really worked at all. At the end of the journey, it turns out that “active” really means nothing, because an “active, Full-time Employee” is exactly the same as a “Full-time Employee.”
Continue Reading Tenth Circuit Decides That An “Active, Full-time Employee” Is Entirely Different Than an Employee Who is “Actively at Work”

Katherine M. Katchen

We are please to welcome Katherine M. Katchen as counsel in Robinson+Cole’s Managed Care + Employee Benefits Litigation Group. Kate has more than 20 years of litigation experience representing clients in complex commercial litigation matters, particularly in the area of managed care and insurance. She will be

In Rutledge v. Pharmaceutical Care Mgt. Assoc., — U.S. –, 2020 WL 7250098 (Dec. 10, 2020), the Supreme Court held that ERISA’s broad express preemption will not reach a state law that focuses on the price of prescription drug benefits that a plan chooses to provide.

The particular question in Rutledge was whether ERISA preempted an Arkansas law regulating the price at which pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by ERISA prescription drug plans. The Court described PBMs as

a little-known but important part of the process by which many Americans get their prescription drugs. Generally speaking, PBMs serve as intermediaries between prescription-drug plans and the pharmacies that beneficiaries use. When a beneficiary of a prescription-drug plan goes to a pharmacy to fill a prescription, the pharmacy checks with a PBM to determine that person’s coverage and copayment information. After the beneficiary leaves with his or her prescription, the PBM reimburses the pharmacy for the prescription, less the amount of the beneficiary’s copayment. The prescription-drug plan, in turn, reimburses the PBM.


Continue Reading Supreme Court Rules that ERISA Does Not Preempt State Law Regulating PBM Reimbursements

In Dowdy v. Metro. Life Ins. Co., 16-15824, 2018 U.S. App. Lexis 12648 (9th Cir. May 16, 2018), the Ninth Circuit ruled that an accident plan that covers “accidental injury that is the Direct and Sole Cause of a Covered Loss” really covers many losses that have causes other than the accidental injury. And the court held that an illness does not “contribute to” a loss unless it is a “substantial cause” of the loss. In so holding, the Court: relied on some Congressional policies underlying ERISA while ignoring others; and read language into a Plan that was not there.
Continue Reading Ninth Circuit “Interprets” Accident Plan; “Direct and Sole Cause” Doesn’t Mean What It Says

In the world of ERISA litigation, one of the safest bets is usually that, if an employer establishes something that it calls a “plan,” and the plan allows a significant number of its employees to obtain money after retirement, ERISA is going to govern. Sure, there are situations where the employer is exempt from ERISA (it may be a governmental entity or affiliated with a church), but those exceptions are generally easy to spot.

However, Pasternack v. Shrader, 863 F.3d 162 (2d Cir. 2017), is a reminder of the risks of drawing such automatic conclusions, because sometimes a plan is just a plan. Pasternack essentially held that, when the primary purpose of a stock ownership plan was something other than deferring income or providing retirement income, ERISA may not govern.  Though the Court asserted that the distinction between a pension plan and one that offered present benefits was “crisp and unambiguous,” one might be forgiven for harboring doubt that the line is as well-defined as the Court believed.
Continue Reading A stock plan is not necessarily an ERISA plan

On October 6, 2017, the Department of Labor signed a proposed Rule “to delay for ninety (90) days – through April 1, 2018 – the applicability of the Final Rule amending the claims procedure requirements applicable to ERISA-covered employee benefit plans that provide disability benefits.”

Specifically, the DOL proposes:

Section 2560.503-1 is amended by removing “on or after January 1, 2018” and adding in its place “after April 1, 2018” in paragraph (p)(3) and by removing the date “December 31, 2017” and adding in its place “April 1, 2018” in paragraph (p)(4).

The proposed rule is scheduled to be officially published on October 12, 2017. There will be a 15-day period for comments on the proposal to extend the applicability date. There will also be a 60-day period to submit “comments providing data and otherwise germane to the examination of the merits of rescinding, modifying, or retaining the rule[.]”
Continue Reading Department of Labor Proposes to Delay Implementation of Disability Claim Regulations

A recent decision by the Eighth  Circuit Court of Appeals, Jones v. Aetna Life Ins. Co., No. 16-1714, 2017 U.S. App. LEXIS 8112 (8th Cir. May 8, 2017), provides another signal that those of us defending against benefit claims increasingly may have to contend with simultaneous equitable claims for breach of fiduciary duty. Though the law is developing in this area (when is ERISA law not “developing”?), and likely will vary from circuit to circuit, you can expect more plaintiffs to add an equitable claim to a benefits complaint, and you can expect at least some courts to allow those claims to go forward. What strategies will prove most effective in responding to this latest tactic? While there are no definitive answers at this point, there are some ideas to consider.
Continue Reading It May Be Time to Start Thinking About Equitable Claims Again