Health & Welfare

Relative of 2-Percent Shareholder May Deduct Cost of Health Insurance

Certain individuals who receive health care coverage from an S corporation must include the cost of the coverage in their income because of their relationship to the owner of the S corporation. However, they are then permitted to deduct the cost on their personal tax returns, according to IRS Chief Counsel Memorandum 201912001. Facts: The owner of an S corporation employs a family member through ...

Plan May Deny Coverage for Bariatric Surgery

The U.S. Court of Appeals for the Fifth Circuit, in Rittinger v. Healthy Alliance Life Insurance Company, has ruled that a plan administrator that has been granted discretionary authority with regards to claim decisions, may deny a claim for bariatric surgery when there are conflicting medical opinions as to whether the surgery falls within an exception that would have given the participant ...

Court Upholds LTD Insurer's Claim Denial Based on Failed Validity Tests

The Eighth Circuit Court of Appeals, in Johnston v. Prudential Ins. Co., has affirmed a lower court's ruling that the defendant insurer acted appropriately in terminating the plaintiff's long term-disability ("LTD") insurance benefits based on evidence that the plaintiff was "deliberately exaggerating" his symptoms.

Federal Judge Strikes Administration's Regulations Expanding Access to Association Health Plans as Illegal

A federal judge in Washington, D.C., ruled last Thursday that the current administration's attempt to broaden the types of health plans that can avoid the coverage rules under Title I of ERISA generally, and specifically for purposes of the Affordable Care Act ("ACA") was "clearly an end-run" around the statutes. The court struck down and remanded the implementing regulations to the Department of ...

Claims Denial Appeal Period Begins on Date of Denial, Not Date Benefits Cease

The First Circuit Court of Appeals has ruled, in Fortier v. Hartford Life and Accident Insurance Company, that a long term disability ("LTD") plan's 180 day period for claims denial appeals begins when a claim is denied and not when benefits cease to be paid.

DOL Says Employees Cannot Decline FMLA Leave When Absence is Covered by FMLA

The U.S. Department of Labor ("DOL") has issued Opinion Letter FMLA2019-1-A clarifying that neither an employer nor an employee may delay designating paid leave as Family and Medical Leave Act ("FMLA") leave.

LTD Benefit Denial Overturned

The Ninth Circuit Court of Appeals, in Kott v. Agilent Technologies Inc. Disability Plan, has determined that a plan administrator abused its discretion in denying long-term disability ("LTD") benefits because it: (i) failed to provide the plaintiff with a sufficient explanation for the basis of its denial; (ii) did not properly consider her physical limitations; and (iii) made erroneous factual ...

Plans Cannot Prevent Participant from Appointing an Authorized Representative

In a letter dated February 27, 2019, the Department of Labor ("DOL") has reiterated that an ERISA-covered plan cannot prevent a plan participant from appointing an authorized representative for initial claims and for claims appeals. DOL regulations expressly give participants and beneficiaries the right to appoint authorized representatives to act on their behalf in connection with an initial ...

Firing After Leave Request Denial May Be FMLA Violation

The United States District Court for the Southern District of Texas, in Byrd v. City of Houston, has determined that a plaintiff-employee's Family and Medical Leave Act ("FMLA") claim should be allowed to proceed where the defendant-employer first approved and then subsequently denied the employee's FMLA leave request and then fired her for excessive absences. Background. The plaintiff requested ...

DOL Guidance on ERISA Preemption

The United States Department of Labor ("DOL") has issued an Information Letter confirming that state laws requiring employers to obtain written consent before withholding amounts from employees' wages for benefit plan contributions are preempted by ERISA. Background. The DOL has previously issued guidance (i.e., Advisory Opinion 2008-02A) that ERISA preempted state laws that attempt to govern ...