Washington D.C. Benefits Law Blog

Many District of Columbia workers depend on private employer-sponsored retirement plans. The Employee Retirement Income Security Act of 1974 directs the operation of defined contribution plans, but some view the law as in need of a legislative overhaul. Until such a correction might be forthcoming, retirement plan disputes must be settled through private talks or litigation. Inconsistent decisions in lower courts, however, have inspired a deluge of petitions to the Supreme Court of the United States.

From January through April 2019, the Supreme Court received petitions every month involving ERISA disputes. The likelihood that the court might accept any of these petitions this year is low. The cases in question revolve around a number of issues, such as burden of proof for fiduciary breach claims, investment communications, and the standards that determine if a case should go to trial.

One federal court decision could affect the way that health insurance benefits treat employee mental health claims in Washington, D.C., and across the country. In the case of Wit v. United Behavioral Health (UBH), a managed health care company was found responsible for denying tens of thousands of workers' insurance claims for mental health or substance abuse treatments. UBH oversees behavioral health services for a number of health insurance companies, including UnitedHealthcare.

Eleven plaintiffs filed suit against UBH on behalf of over 50,000 people whose claims were denied. They alleged, and the court agreed, that these denials were based on flawed criteria. In one case, a plaintiff made out-of-pocket payments of nearly $30,000 for health care treatment despite having valid health insurance throughout that time. The court said that UBH's guidelines were unreasonable and designed to restrict access to care, rather than making use of standard, evidence-based medical guidelines to determine the necessity of treatment. The case was filed as an ERISA benefits claim, making use of the protections of the Employee Retirement Income Security Act of 1974.

A recent ruling in the Eighth Circuit might be interesting to employees and employers in the Washington, D.C. area as well as the rest of the country. While the ruling is only binding on courts in the Eighth Circuit, it might indicate how other circuits might likewise rule.

The decision involved a practice called cross-plan offsetting that is used by some ERISA plans to recover overpayments. In the practice, plan administrators reduce future payments to offset overpayments that they have made. The plan administrators may deny or reduce payments to specific providers in the future because of overpayments even if the subsequent claims were made by different plan participants.

The nation's highest court may rule in Washington, D.C., on which party is responsible for proving loss causation when a dispute over the management of defined contribution benefit plans goes to court. One company currently involved in such a case appealed to the Supreme Court to settle the disparate approaches taken among federal appeals courts about who must prove losses when plan members file suit over fiduciary breaches of the Employment Retirement Income Security Act (ERISA), which protects employee benefits from misuse or fraud.

One company involved in an ERISA benefits dispute has requested that the Supreme Court rule on the issue to provide a definitive national framework for assessing loss causation. In six appellate courts, plaintiffs suing the fiduciaries of these plans have the burden of proof to show that losses were caused by fiduciary breaches of duty. On the other hand, four courts have ruled that the defendants must show that losses were not caused by any breaches of fiduciary duty. The petition noted that the high court is well-placed to resolve this fundamental divide that can mean similar cases are treated substantially differently, even under a uniform national law.