Category: Life, Health, Disability & ERISA

Life, Health, Disability, and ERISA – a summary of decisions from across the country concerning life, health, and disability policies, including those governed by ERISA.  For a free copy of this edition, click here..

Following your review of Life, Health, Disability, and ERISA kindly feel free to contact attorneys and co-editors with any comments you may have, or with any topics you would like to see in upcoming newsletters. Editors: Daniel Gerber, Sarah Delaney, Matthew C. Van Vessem…

 US Airways v. McCutchen

It is somewhat rare for a trial and appellate court to disagree and, upon appeal to the United States Supreme Court, find out they were both wrong. It is even rarer for both parties in this action to win and lose simultaneously in a decision. And yet, on Tuesday, April 16, 2013, the scenario described above happened in US Airways v. McCutchen. The ruling from Justice Elena Kagan was a mixed bag. On one hand, the court ruled that clear …

United States v. Gutschlag, GM-Southwest, Inc. U.S. Dist. Ct., W.D.Va. April 8, 2013

Third Party Administrator GM – Southwest, Inc. (TPA), and its former owner John Paul Gutschlag, Sr. contracted with Virginia Tech from 2003-2011 to provide health insurance to the school’s undergraduate and graduate students. The premiums for the health insurance were paid directly to the TPA, who accounted for the premiums received, deducted its commission, and then delivered the balance to the carriers.

Each year the TPA was responsible for compiling and reporting …

United States of America v. Rick A. Kulhman No. 11-15959 (11^th Cir. 2013)
Dr. Rick Kuhlman, a chiropractor who operated in Atlanta, GA, and Nashville, TN, pled guilty to running a five-year, $3 million health care fraud scheme. He appeared to be the perfect defendant because of his efforts to make things right and a willingness to educate others on the criminal nature of his actions. Therefore, the district court ruled out a jail sentence. However, the 11th Circuit reversed the relatively light sentence …

Several thousand New Yorkers are receiving unexpected checks in the mail due to an investigation by the New York State Department of Financial Services (DFS) into life insurance claims practices.  According to a DFS press release, regulators started investigating these practices in July 2011. Regulators found that insurers did not pay out life insurance benefits unless the beneficiary made a claim on the policy.  The problem is this practice only works if the beneficiary actually knows that he, she, (or it) is a beneficiary.  …

Federal Register, Proposed Rulemaking, 26 CFR Parts 1, 54 and 301
In a proposed rulemaking, the Department of the Treasury and the Internal Revenue Service (IRS) recognized a “margin of error” in proposing a 95 percent mandate for large employers in providing medical benefits to employees. The intention is to create leeway for oversights, inadvertent errors, and unique circumstances allowing the employer protection from financial penalties in these instances. In order to extend this flexibility to the smaller “large employers” (those with 50 or more …

Korte v. Sebelius
United States Court of Appeals for the Seventh Circuit (December 28, 2012)
On December 28, 2012, the Seventh Circuit issued a temporary restraining order exempting a contracting company from the contraception rule under the Affordable Care Act. This ruling was in line with other courts including the Eighth District in O’Brien v. U.S. Dep’t of Health & Human Servs. as well as other district courts including a Michigan Federal District Court, which granted a temporary restraining order to Domino’s Farms Corp.  …

The Prudential Insurance Company Of America ET AL. v. J.P. Morgan Securities LLC et al.;
(2:12-cv-03489 U.S. District Court for the District of New Jersey)
In April of 2012, the Prudential Insurance Company of America (the plaintiffs) filed suit against the J.P Morgan Securities, LLC, (the defendants) in New Jersey state court, claiming that the defendants made false statements and other misrepresentations in connection with $523 million in Residential Mortgage-Backed Securities (RMBS) purchased by Prudential between 2005 and 2007.  The defendants moved to remove the …

Fisher v. JP Morgan Chase & Co.
U.S.Sup.Ct.(2d Cir.) Nov. 13, 2012

The plaintiff’s ERISA claims in this action involved allegations that (1) the employer and director defendants negligently permitted plan participants to purchase and hold shares of JP Morgan common stock when it was imprudent to do so; (2) defendants failed to disclose and negligently misrepresented material facts to Plan participants; and (3) JP Morgan and the director defendants failed to appoint appropriate fiduciaries, monitor those fiduciaries, and supply them with the information necessary …