Health & Welfare

HHS Reduces Maximum Penalty Amounts for Certain HIPAA Violations

The Department of Health and Human Services ("HHS") has lowered the maximum civil monetary penalty amounts for most violations of the Health Insurance Portability and Accountability Act ("HIPAA") Privacy and Security Rules. Background. In 2009, Congress enacted the Health Information Technology for Economic and Clinical Health ("HITECH") Act that, among other things, enhanced HIPAA enforcement by ...

Current Association Health Plan Contracts Safe

The Department of Labor ("DOL") has announced that it will not take action against association health plans ("AHPs") that comply with its final regulations, even though these regulations were partially overturned by a federal court in State of New York v. United States Department of Labor. In that case, a federal district court in Washington, D.C. ruled that the regulations are an unreasonable ...

State Law Claims Not Preempted by ERISA

The U.S. Court of Appeals for the Ninth Circuit, in The Depot, Inc. vs. Caring for Montana, has ruled that state law claims of fraud and misrepresentation are not preempted by ERISA. Facts: Three employers provided their employees with health care insurance based on the insurer's representations that the monthly premiums would reflect only the cost of providing benefits. The employers later said ...

Participant's Disability Claim is Time-Barred

The U.S. Court of Appeals for the Second Circuit has ruled, in Arkun v. Unum Group, that a plan participant could not sue to restore her long-term disability ("LTD") benefits because the suit was time barred by the plan's provisions. Facts. The employee became disabled in 1999 and began receiving LTD benefits. In 2004, the plan informed her that she was no longer disabled and that benefits would ...

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.