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The protections offered by ERISA

Employees in the Washington, D.C., area and throughout the country may be covered by the federal Employee Retirement Income Security Act of 1974 (ERISA). It applies to most retirement and health plans, and it sets rules as to the information employees who are covered by an ERISA plan are entitled to know. It's worth noting that this legislation does not apply to most plans created outside of the United States. ERISA also doesn't apply to plans that were created or overseen by employees, government agencies or churches.

The legislation has been altered several times since it was first created. Important changes include the Health Insurance Portability and Accountability Act (HIPAA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA). HIPPA laws are designed to prevent employees from being discriminated against due to their medical care. The COBRA amendment allows employees who have been terminated retain an employer plan for a predetermined amount of time.

Denials of benefits claims for public employees

If you're a public sector or federal employee in the Washington, DC, area, you likely enjoy greater benefits than employees in the private sector. Your benefits package may include generous retirement, disability and medical benefits.

Along with the differences between the benefits packages, the processes for filing benefits claims are also different for public sector and federal employees. When you suffer an injury, become disabled or decide to retire, it can be devastating if your claim for benefits is denied.

Outdated mortality table questioned in ERISA lawsuit

A major purpose of ERISA is to help employees in Washington, D.C., and around the country secure appropriate retirement and health benefits. However, benefit payments may not be dished out correctly if old data is used to determine annuity payment amounts. This, in a nutshell, is what's at the heart of a lawsuit involving a large military shipbuilding company's non-single-life-annuity plans.

In a complaint filed in the U.S. District Court for the Eastern District of Virginia, the company is accused of using outdated mortality data that was first published in 1971. This data assumes 90 percent of the company's employees are male and 90 of the contingent beneficiaries are female. A 6% interest rate is also used. If company retirement plan participants opt for a single life annuity (SLA), they'll receive benefits at a flat monthly rate for each year of service from their retirement date until they pass.

Settlement in retirement account lawsuit against MFS

Some employees in Washington, D.C. may have had the experience of having their retirement funds mismanaged by the investment manager in charge of them. The company Massachusetts Financial Services Co. agreed to a settlement of $6.875 million after a lawsuit was filed in July 2017 by employees who alleged that the company violated the Employee Retirement Income Security Act of 1974. The settlement document was filed on June 14.

Employees said the company had used in-house funds that were expensive and underperforming for their 401(k)s so that the company could make a profit. As part of the settlement agreement, MFS denied wrongdoing, fault, liability or damages. A spokesman said the company agreed to settle the case to avoid further litigation. A court must approve the settlement amount. The company must also change its retirement plans in several ways. It must stop using an in-house option as the default fund. It also has to hire a third party who will evaluate the plans annually.

How to appeal an ERISA benefit claim decision

To protect the pensions of employees in Washington D.C. and all across the United States, The Employee Retirement Income Security Act (ERISA) was signed into law in 1974. Over the years, ERISA has been modified to cover many other types of workplace benefits, including medical insurance, dental insurance, vision plans, disability insurance, and severance agreements. These protections also apply to employees at non-profit organizations and small businesses. Unfortunately, it can be complicated for employees to exercise their rights under ERISA.

When a benefit claim is denied under ERISA regulation, a complex process where the insurance company has a lot of power takes place. This involves an administrative appeal where the insurance company decides whether or not its own decision was correct. This may seem unfair, but there are ways an employee can improve their chances of success. In addition, if an appeal is not filed in time the employee can permanently lose their ability to get the compensation they deserve.

Common ERISA violations and criminal provisions

The purpose of ERISA is to protect employee benefit plan participants and designated beneficiaries in Washington, D.C., and other parts of the country. Even so, there are times when violations occur, some of which can have a serious impact on an employee's company-related benefits. Here's a closer look at common violations and related ERISA provisions.

The Employee Benefits Security Administration conducts regular investigations if there are suspected ERISA violations. Pension and welfare plans could be affected if, for example, a plan is not being operated specifically for the benefit of participants. Action may also be taken if a plan administrator, plan sponsor, or other party uses plan assets for their benefit. Violations could also involve not following the plan's terms, taking adverse actions against an individual simply for exercising their rights under the plan, failing to properly value the assets related to a plan at their current fair market value, and not properly selecting and monitoring service providers.

Are pension plans adequately funded?

Pension plans in the District of Columbia and around the country have to be funded in order to fulfill their purpose. However, the Archdiocese of Newark, New Jersey, failed to do so, according to a lawsuit filed by more than 100 former employees of Saint James Hospital. As a result of the Archdiocese's action, the plan ran out of funds in 2017, and no benefits have been paid out since.

The pension plan operated under the Employee Retirement Income Security Act (ERISA) until the Archdiocese stopped funding it in 1988. Around 1997, the Archdiocese had more than $20 million in excess funds that it could have used to plug a $2.7 million hole in the plan. However, the Archdiocese chose instead to transfer those funds to a non-guaranteed Transamerica account. Transamerica later notified the employees that the Archdiocese had stopped contributing to the plan and that funds were no longer sufficient to meet future obligations.

Multiple ERISA cases seek Supreme Court review

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.

ERISA has narrow scope for employees of Indian tribal governments

Lawmakers in Washington D.C. created the Employee Retirement Income Security Act of 1974 to direct the design and operation of retirement plans for private-sector employees. ERISA does not apply to retirement plans operated for employees of government agencies, and workers at Indian tribal governments largely fall into the non-ERISA category. An amendment to the act in 2006 altered this landscape for plan sponsors at Indian tribal governments and granted ERISA protections to workers employed within tribal commercial enterprises.

A retirement plan for tribal workers would only be exempt from ERISA if the employees performed essential governmental functions, such as teachers. Tribal governments running retirement plans for employees at commercial venues, like hotels or casinos, would have to observe ERISA rules. The act requires plan sponsors to file annual reports, provide participants with a summary plan description, adhere to specific procedures for claims and appeals and meet fiduciary standards.

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.


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