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Washington D.C. Benefits Law Blog

Health management company found liable for ERISA violations

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.

Fiduciaries lose class action suit

A federal court in California has sided with plaintiffs in a class action suit concerning payment for behavioral health costs. The court ruling and rationale for the decision should make ERISA plan trustees and administrators in Washington, D.C., a little more mindful of accepted methods for treatment.

The suit related to behavioral health claims submitted to a self-insured carrier over a seven-year period. The case fell under ERISA jurisdiction as the health benefits were employer-sponsored. Plaintiffs provided evidence in the form of expert testimony to identify generally accepted treatment methods for substance abuse and mental health cases. The standards originate from a large national organization of mental health professionals.

Eighth Circuit rules against cross-plan offsetting

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.

Public workers face complex benefits system

Many District of Columbia residents have built their careers in the public sector. One thing that can make these jobs so appealing is the exceptional benefits they offer, often significantly superior to those available to workers in the private sector. Government and other public service employees often have strong insurance packages that include disability, retirement and health benefits. However, even people who believe they can rely on great benefits may be shocked by an unjust denial or a dismissed benefits claim.

When you are denied benefits as a federal or public employee, the process you go through is also different than that for employees of private companies. However, the costs can be massive, and many workers cannot afford to let a denial of a claim stand. People may find themselves unable to make ends meet or cover the costs for necessary health care. If you are nearing retirement age, it may be particularly important to protect your rights under your benefits plan.

Supreme Court petitioned on ERISA benefits issue

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.

Actual knowledge in ERISA claims

When ERISA claims are filed in Washington, D.C., the plan fiduciaries commonly claim that the statute of limitations bars the claims. ERISA claims have a three-year statute of limitations, which means that claims must be filed within that period of time, or they will be time-barred.

The Employee Retirement Income Security Act is a federal law that sets standards for health and retirement plans that are voluntarily established by private companies. When people become aware that their plans' fiduciaries took actions that violated the provisions of ERISA, they may file lawsuits. In some cases, the workers may be unaware that they can file claims until the statute of limitations has run.

Employee lawsuit questions hospital's exemption from ERISA

Governmental agencies employ many workers in Washington D.C. These organizations generally qualify for the government exemption to operational rules for pension and benefit plans imposed by the Employee Retirement Income Security Act. A brewing class action lawsuit brought by a group of current and former hospital employees has challenged the health care organization's assertion that ERISA rules do not apply to its health plan because it is a governmental entity.

The lawsuit maintains that the hospital has no recognizable basis for declaring itself exempt from ERISA regulations that normally apply to private employers. If the hospital had followed ERISA rules, then it would not have allegedly engaged in self-dealing transactions with affiliates and vendors that unnecessarily increased health care costs for plan participants.

Insurance company is being sued for underpayment

Metropolitan Life Insurance is being sued by participants of its retirement plans for alleged underpayment. The plaintiffs claim that the company's benefits committee purposefully used outdated mortality rates to pay out less money. MetLife, which has customers in Washington D.C. and other parts of the country, faces this lawsuit in New York federal court.

Language in this lawsuit claims that the insurance company did not pay alternative benefits in accordance to regulations established by the Employee Retirement Income Security Act of 1974. Plaintiffs are demanding that their plans comply with ERISA and that they receive all previously withheld benefits. They also want MetLife to recalculate the already-paid benefits and present accounting information to determine what the actual errors were.

Important changes to ERISA benefits plans

A number of changes have been made to the procedures involved with ERISA benefits claims that may affect workers and employers in the Washington, D.C., metropolitan area. It is important for workers and their employers to be aware of these changes because they could impact the way in which disability claims are handled.

The U.S. Department of Labor issued rules that impact long-term disability plans. The rules also have an impact on other ERISA benefits, including tax-deferred retirement plans, defined benefit pensions and certain deferred compensation plans for executives.

ERISA issues litigated in federal Fifth Circuit

For workers in Washington, D.C. and across the country, employee benefits can be a critical part of their compensation and their preparation for the future. The Employee Retirement Income Security Act (ERISA) aims to protect workers' pensions, insurance plans and other benefits from being squandered. However, the procedures for filing ERISA benefits claims can be complex.

In one case before the U.S. Court of Appeals for the Fifth Circuit, some complex issues related to ERISA claims were raised. These claims can also be brought by workers who are denied benefits by an insurance plan provided through the workplace, as in the case considered. A former employee of Turner Industries sued the company as well as the insurer, Prudential, for denying his claim for long-term disability benefits. He also challenged the insurer's demand for repayment of short-term disability benefits it provided. Much of the case hinged on the proper section of the law under which an employee can bring a claim. While one section of ERISA covers benefits claims, another addresses other breaches of fiduciary duty.


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