Welfare Benefit Plan ERISA News
June 2014

 
Importance of Granting Plan Administrators Discretion
In 2010, Dennis Hall completed and signed a beneficiary designation form changing the beneficiary of his group life insurance policy from his son to his wife, Jane. However, he never submitted it to the insurance company. Upon his death, MetLife paid the claim to his son, the last named beneficiary on record.
Jane sued MetLife, but the court upheld the company's determination that she was not a beneficiary because Hall's group life policy and the plan documents contained language that expressly provided MetLife with "discretionary authority to interpret the terms of the Plan and to determine eligibility for and entitlement to Plan benefits in accordance with the terms of the Plan."
This case provides a vivid example of the importance of plans granting plan administrators the discretion to construe and interpret the terms of the plan and to determine eligibility for benefits. When plans explicitly provide administrators with such authority, the decisions of plan administrators will be granted much greater deference by the courts and increased protection from challenges based on federal common law. More
Stolen Laptops Net $2,000,000 for Government
QCA Health Plan and Concentra have paid HHS $1,975,220 collectively to resolve potential violations of HIPAA Privacy and Security Rules resulting from the theft of laptop computers containing electronic protected health information (ePHI). These major enforcement actions underscore the significant risk to the security of patient information posed by unencrypted laptop computers and other mobile devices. While failure to encrypt ePHI is not a violation per se, the HHS news release notes that doing so proactively is good policy and can improve one's defense against security incidents. HHS Press Release.
Welfare Benefit Plan Might
Not Be Required to Cover Same Sex Spouses
In our May newsletter, we reported that beginning in 2015, non-grandfathered health insurance plans must cover same-sex spouses on the same terms as they cover opposite-sex spouses in states that recognize such marriages. Since then, HHS has clarified that if the plan is in a state that doesn't respect such marriages, insurance carriers must offer employers the option to cover same-sex spouses, but employers are not required to actually provide same-sex spousal benefits. A recent case also reaches that conclusion. Because this requirement applies to insurers and not employers, it only affects fully insured health plans. More.
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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.

 

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