Justia Insurance Law Opinion Summaries

As an assembler with Eaton Corporation, McClain purchased the highest level of long-term disability insurance, which was “designed to replace ... 70 percent of [her] monthly base pay.” She stopped working in January 2008, due to a back injury she suffered on the job in June 2007. She received benefits during the first 24 months under the First Tier of the Plan’s coverage, which defined disability as being “totally and continuously unable to perform the essential duties of your regular position with the Company, or the duties of any suitable alternative position with the Company.” After 24 months, the Plan to an “any occupation” standard, providing Second Tier coverage if “you are totally and continuously unable to engage in any occupation or perform any work for compensation or profit for which you are, or may become, reasonably well fit by reason of education, training or experience--at Eaton or elsewhere.” The Plan denied her claim for benefits because her treating physician opined McClain could work part-time, and a market study identified various part-time positions in the area for which she was qualified. The district court rejected her suit under the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Seventh Circuit affirmed, finding that the determination was not arbitrary.View "McClain v. Eaton Corp. Disability Plan" on Justia Law

Hartford is the administrator of Wal-Mart’s Group Disability Plan, which is covered by the Employee Retirement Income Security Act. The policy requires any suit to recover benefits pursuant to ERISA, 29 U. S. C. 1132(a)(1)(B), to be filed within three years after “proof of loss” is due. Heimeshoff filed a claim for long-term disability benefits. Following mandatory administrative review process, Hartford issued a final denial. Almost three years after the final denial but more than three years after proof of loss was due, Heimeshoff sought judicial review under ERISA. The district court dismissed, reasoning that while ERISA does not provide a statute of limitations, the contractual limitations period was enforceable under state law and Circuit precedent. The Second Circuit affirmed. The Supreme Court affirmed, finding the limitations provision enforceable. A participant’s ERISA cause of action does not accrue until the plan issues a final denial, but it does not follow that a plan and its participants cannot agree to commence the limitations period before that time. The Court noted that contractual limitations provisions should ordinarily be enforced as written. The period at issue is not unreasonably short and does not undermine ERISA’s two-tiered remedial scheme by causing participants to shortchange the internal review process. If administrators attempt to prevent judicial review by delaying the resolution of claims in bad faith, the penalty for failure to meet regulatory deadlines is immediate access to judicial review for the participant and courts can apply waiver or estoppel. Plans offering appeals beyond what is contemplated in the internal review regulations must agree to toll the limitations provision during that time, 29 CFR 2560.503–1(c)(3)(ii). View "Heimeshoff v. Hartford Life & Accident Ins. Co." on Justia Law

In 2000, Rochow sold his interest in Universico to Gallagher and became President of Gallagher. As an employee of Gallagher, Rochow was covered under a LINA disability policy. In 2001, Rochow began to experience short term memory loss, chills, sweating, and stress at work. Gallagher demoted Rochow to Sales Executive-Account Manager. Because of his inability to perform his job, Gallagher forced Rochow to resign in January, 2002. In February 2002, Rochow experienced amnesia, was hospitalized, and was diagnosed with HSV-Encephalitis, a rare, severely debilitating brain infection. LINA repeatedly denied Rochow benefits stating that Rochow’s employment ended before his disability began. In 2004, Rochow sued Cigna, LINA’s parent company, alleging breach of fiduciary duty under ERISA, 29 U.S.C.1104(a). In 2007 the Sixth Circuit affirmed a decision that denial of Rochow’s claims was arbitrary, not the result of a deliberate, principled reasoning process, and did not appear to have been made solely in the interest of the participants and beneficiaries or the exclusive purpose of providing benefits to participants and beneficiaries as required by ERISA. Rochow died in 2008. In 2009, the district court ordered an equitable accounting of profits and disgorgement of $3,797,867.92 under an equitable theory of unjust enrichment. The Sixth Circuit affirmed. View "Rochowl v. Life Ins. Co. of N. America" on Justia Law

Plaintiff appealed the district court's denial of her motion for judgment on the record, affirming Liberty's termination of long-term disability benefits and dismissal of the complaint with prejudice. The policy provided that an employee was not disabled if the employee was capable of performing any occupation for which he or she was reasonably fitted. The court concluded that Liberty did not abuse its discretion in determining that plaintiff was reasonably fitted to perform the occupation of ambulance/emergency service dispatcher. Therefore, the record reflected that Liberty's decision to terminate benefits was supported by substantial evidence and thus did not constitute an abuse of discretion. Accordingly, the court affirmed the judgment of the district court. View "Gerhardt v. Liberty Life Assurance Co., et al." on Justia Law

After discovering that she had lung cancer that had spread to her brain, Killian underwent aggressive treatment on the advice of her doctor. The treatment was unsuccessful and she died. Her husband submitted medical bills for the cost of the treatments to her health insurance company. The company denied coverage on most of the expenses because the provider was not covered by the insurance plan network. The husband filed suit, seeking benefits for incurred medical expenses, relief for breach of fiduciary duty, and statutory damages for failure to produce plan documents. The district court dismissed denial-of-benefits and breach-of-fiduciary-duty claims, but awarded minimal statutory damages against the plan administrator. In 2012, the Seventh Circuit affirmed the dismissals, rejecting an argument that the plan documents were in conflict, but remanded for recalculation of the statutory damages award. On rehearing, en banc, the Seventh Circuit affirmed the denial of benefits and statutory penalties holdings, but reversed on the breach of fiduciary duty claim. The instructions given in plan documents were deficient and a reasonable trier of fact could rule in favor of Killian, based on telephone conversations in which Killian attempt to determine whether the physicians who were about to perform surgery were within the network. View "Killian v. Concert Health Plan" on Justia Law

GM provides its salaried retirees with continuing life insurance benefits under an ERISA-governed plan. MetLife issued the group life insurance policy and periodically sent letters to participants advising them of the status of their benefits. The plaintiffs, participants in the plan, allege that those letters falsely stated that their continuing life insurance benefits would remain in effect for their lives, without cost to them. GM reduced their continuing life insurance benefits as part of its 2009 Chapter 11 reorganization. The plaintiffs sued MetLife under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132(a)(2) & (a)(3) and state law. The district court dismissed. The Sixth Circuit affirmed. MetLife did not tell participants that the benefits were fully paid up or vested upon retirement, but that their benefits would be in effect for their lifetimes, which “was undeniably true under the terms of GM’s then-existing plan.” The court rejected claims of estoppel, of breach of fiduciary duty, unjust enrichment, breach of plan terms, and restitution. View "Merrill Haviland v. Metro. Life Ins. Co." on Justia Law

CareFirst, Inc., a nonstock, nonprofit Maryland corporation, is a holding company with two subsidiaries that provides health insurance for millions of Maryland residents. State law confers broad authority on the Maryland Insurance Commissioner to oversee its operation and adherence to its mission. This case arose from the termination of Leon Kaplan, a former executive of CareFirst. CareFirst declined to pay part of the post-termination compensation set forth in Kaplan's employment contract, reasoning that the compensation was not for "work actually performed," as that standard had been interpreted by the Commissioner. The Commissioner affirmed the decision not to pay the benefits, concluding that the payments would violate Md. Code Ann. Ins. 14-139. The Court of Appeals affirmed, holding (1) the Commissioner's determination was not preempted by ERISA; (2) the Commissioner's construction of the insurance code was legally correct; and (3) there was substantial evidence to support the Commissioner's determination in this case. View "Md. Ins. Comm'r. v. Kaplan" on Justia Law

Appellant was placed on disability leave from work. Appellant was covered under a long term disability (LTD) policy that her employer obtained from Medical Group Insurance Services (MGIS). The policy was written by Sun Life Assurance Company (Sun Life). After leaving her job, Appellant filed a claim with MGIS seeing long term disability benefits. Sun Life denied Appellant's request for benefits. Appellant filed an action against Sun Life, asserting various state law claims. The federal district court dismissed the action based on ERISA preemption. Appellant then amended her complaint to add ERISA claims and asked the district court to apply de novo review in its evaluation of her ERISA claims. The court denied the motion and granted summary judgment for Sun Life, concluding that Sun Life's decision to deny benefits was not arbitrary and capricious, and thus complied with ERISA's requirements. The First Circuit Court of Appeals vacated the judgment, holding (1) the safe harbor exception to ERISA did not apply to the policy covering Appellant, and therefore, Appellant's state law claims were preempted; but (2) the benefits denial was subject to a de novo review, rather than the highly deferential "arbitrary and capricious" review prescribed for certain ERISA benefits decisions. Remanded. View "Gross v. Sun Life Assurance Co. of Canada" on Justia Law

Retirees, dependents of retirees, and the union filed a class action suit against the retirees’ former employer, M&G, after M&G announced that they would be required to make health care contributions. The district court found M&G liable for violating a labor agreement and an employee welfare benefit plan and ordered reinstatement of the plaintiffs to the current versions of the benefits plans they were enrolled in until 2007, to receive health care for life without contributions. The Sixth Circuit affirmed. The district court properly concluded that the retirees’ right to lifetime healthcare vested upon retirement after concluding that documents, indicating agreement between the union and the employers to “cap” health benefits and several “side” letters were not a part of the applicable labor agreements. View "Tackett v. M&G Polymers USA, LLC," on Justia Law

Edmonson’s husband was insured under a Lincoln group life insurance policy, established under an Employee Retirement Income Security Act employee benefit plan. When her husband died, Edmonson was entitled to a $10,000 benefit. The policy states that benefits, “will be paid immediately after the Company receives complete proof of claim.” It does not state that Lincoln will pay benefits using a retained asset account. Edmonson submitted a Lincoln claim form that stated that Lincoln’s usual method of payment is to open a SecureLine Account in the beneficiary’s name. Lincoln set up an interest-bearing SecureLine Account in Edmonson’s name in the amount of $10,000, and sent her a checkbook. In using retained asset accounts, an insurance company does not deposit funds, but merely credits the account; when a beneficiary writes a check on the account, the insurer transfers funds to cover the check. Three months after Lincoln set up the account, Edmonson withdrew the full amount. Lincoln paid $52.33 in interest. Edmonson contends that the profit Lincoln earned from investing the retained assets was greater than that amount and that Lincoln made $5 million in profit in 2009 by investing retained assets. Edmonson brought an ERISA claim claiming violation of fiduciary duties, 29 U.S.C. 1002(21)(A). The district court granted Lincoln summary judgment, concluding Lincoln was not acting in a fiduciary capacity when it took the challenged actions. The Third Circuit affirmed. View "Edmonson v. Lincoln Nat'l Life Ins. Co." on Justia Law