Category Archives: ERISA

Safe Act for Victims of Domestic Violence of Sexual Assault

On October 1, 2013, the “Safe Act” becomes effective.  The Safe Act provides 20 days of unpaid leave to victims of domestic violence and sexual assault.  The employer can require that this unpaid leave be covered under FMLA, New Jersey FMLA, vacation, or personal leave.

The purpose of the Safe Act is to provide New Jersey victims with time to deal with matters related to an incident of domestic abuse or sexual assault.  The Safe Act covers:

  1. The employee,
  2. The employee’s child,
  3. The employee’s parent,
  4. The employee’s spouse,
  5. The employee’s domestic partner, or
  6. The employee’s civil union partner.

Within 12 months of the incident, the Safe Act’s purpose is to provide the victim of domestic abuse or sexual assault can:

  • Seek medical attention for, or recover from, physical or psychological injuries;
  • Obtain servies from victim services organization;
  • Obtain psychological or other counseling;
  • Participate in safety planning, temporarily or permanent relocate, or undertake other actions to increase safety;
  • Seek legal assistance or remedies; or
  • Attend, participate in, or prepare for court proceedings.

If the employer violates the Safe Act, the employee can ask for the following remedies: (1) Reinstatement; (2) compensation for lost wages and benefits; (3) an injunction; (4) attorney’s fees and costs; (5) civil find of $1,000 to $2,000 for a first time violation; and (6) a fine of $5,000 for any subsequent violations.

via Labor Employment Law Blog: New Jersey Provides Unpaid Leave to Victims of Domestic Violence.

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Filed under civil rights, courts, discrimination, employment, ERISA, federal, fees, Pending Legislation, state, wage

Detroit Bankruptcy is Unconstitutional

As a follow up to the prior post reporting on the bankruptcy filing of Detroit, now a Michigan court has ruled that the bankruptcy filing is unconstitutional.  The decision can be accessed here.

The background of this legal battle raises a lot of legal questions.  The events are as follows.  First, Detroit announces it will be declaring bankruptcy.  Then, lawsuits are filed to block bankruptcy filings/proceedings.  An emergency hearing is scheduled on Thursday (last week) in front of a judge about blocking the bankruptcy proceedings.  Five (5) minutes before the Thursday hearing, Detroit files a petition for bankruptcy.  Afterwards, another hearing is set for Friday.

On Friday, the Ingham County Court ruled against the city.  The court relied on Michigan’s state constitution, which prohibits actions that diminish or impair pension benefits of public employees.  Because Detroit was aware that declaring bankruptcy would affect negatively the pension benefits of public employees, the court ruled that it acted unconstitutionally.

Michigan’s Attorney General Schuette stated that Detroit will be appealing the ruling.  The Attorney General also stated that they will be requesting a stay on the bankruptcy proceedings until the appeal is heard.

This background is so interesting because it raises a lot of legal questions.  Filing a Chapter 9 petition gives the bankruptcy court exclusive jurisdiction over the debtor’s (Detroit) assets.  The interesting predicament is that Detroit filed a petition for bankruptcy five (5) minutes before the Thursday hearing — before any order from the Ingham County Court.

Yet, the state court is ordering the Governor to “(1) direct the Emergency Manager to immediately withdraw the Chapter 9 petition filed on July 18, and (2) not authorize any further Chapter 9 filing which threatens to diminish or impair accrued pension benefits.”

Some of the questions include how to reconcile the state’s and the bankruptcy’s court jurisdictions.  For example, can the state court order state officials (like the Governor) to withdraw the petition? How can a bankruptcy proceeding reconcile itself with Michigan’s state constitution? Are the plaintiffs subject to sanctions for violating a stay in bankruptcy court?

The Huffington Post has an interesting tidbit:

Michigan is one of nine states that explicitly protects public employee pensions in its state constitution.  But the state of Michigan doesn’t guarantee the money to public employees if a city defaults or can’t pay those bills…

The law of bankruptcy is enshrined in the U.S. Constitution.  And the limited case law of Chapter 9 bankruptcy, which applies to cities and municipalities, doesn’t say whether a judge can legally subvert Michigan’s constitution to lessen Detroit’s obligations to its pensioners.

You can read more about Michigan’s constitution protecting public employees’ pensions here.  Some other notable Chapter 9 bankruptcy proceedings nuclide Jefferson County, Alabama (2011) and Orange County, California (1994).

via Detroit bankruptcy unconstitutional, judge rules in pension case – ABA Journal.

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ERISA: Appeal must be clear

In Reindl v. Hartford Life and Accident Insurance Co., –F.3d __, 2013 WL 425356 ( 8th Cir. February 5, 2013), the 8th Circuit clearly stated that when appealing an ERISA decision – the appeal must be clear.  In this case, the question was: Can a mere request for medical records, and a reference to an “appeal in the future tense,” trigger the appeal?  The 8th Circuit held no.

Here, the participant sought and obtained disability benefits.  Hartford later reassessed the claim of the participant and discontinued the benefits.  On November 25, 2008, Hartford sent a letter informing the participant that she had 180 days to file an administrative appeal.

On December 12, 2008, the participant’s lawyer sent a letter requesting medical records and stating, “We will be reviewing the records and obtaining additional medical information for my client’s appeal of the decision to terminate [benefits].” (emphasis added).

On July 8, 2009 the participant’s attorney expressed disagreement with the benefits termination decision and stated: “I would appreciate your reversal of the decision to terminate [Reindl’s benefit claim].”

The trial court held that the participant failed to file a timely appeal.  The 8th Circuit affirmed.  The 8th Circuit court reasoned that the December letter merely requested medical records.  The reference to a future appeal was not an actual appeal.

via 8th Circuit – Expressing Intent to Appeal in the Future Does Not Constitute an “Appeal.” | Boom: The ERISA Law Blog.

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ERISA: Is risk of relapse a disability?

This ERISA long-term disability case brings an interesting question.  Is an individual still disabled even though the disabling event has already passed – just because of the possible risk of relapse?  In other words, if person A had a disability event in 2000, is person A still considered disabled just because of what might or might happen in the future?

In Colby v. Union Sec. Ins. Co., 11-2270, the First Circuit Court of Appeals decided just that.  In this case, the issue was whether the future risk of relapse by an anesthesiologist who had been diagnosed with addition rendered the anesthesiologist disabled for purposes of a long-term disability policy.

The First Circuit Court of Appeals decided this case based on the language of the policy.  Under the policy language, covered “sickness” including mental health issues, including substance abuse, dependence, and addiction.  While in treatment, plaintiff’s doctors consistently held that the risk of relapse was “high” and recommended plaintiff not return to work for a period of 6 months.  Shortly thereafter, plaintiff relapsed.  After the relapse and due to the continuing high risk of relapse, plaintiff’s doctors agreed plaintiff should remain disabled for some period of time after plaintiff’s discharge.

This case arose because the the insurance company maintained that the risk of relapse (regardless of the degree) did not constitute as a disability under the plan.

After looking at the policy language, the First Circuit Court of Appeals disagreed.  There was nothing in the policy that stated that risk of relapse should not be covered as a disability.  The court stated,

To begin, the language of the plan admits of no such categorial bar.  It does not mention risk of relapse, let alone exclude risk of relapse as a potential basis for a finding of disability.

In the words of the Boston ERISA Law Blog:

So there you have it: if you don’t want to cover the currently rehabilitated participant whose risk of relapse means he can’t go back to work, you better write that down somewhere in the plan or the policy.

via Is the Risk of Relapse a Disabling Condition for Purposes of an LTD Policy? : Boston ERISA Law Blog.

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ERISA – changing the reason for denial not allowed

I came across this interesting ERISA cases.  In both cases, the court held that the claims administrator could just not change the reason for denying the benefits.

In both of these cases, the courts ultimately held that the record and the basis for denying benefits were effectively frozen and could not be changed at a later time.

In Rossi v. Precision Drilling Oilfield Servs. Corp. Employee Benefits Plan, 11-50861 (5th Cir. 2013), the Fifth Circuit Court of Appeals held that the claims administrator was not allowed to change the basis for a denial of benefits during the internal appeal.

Initially, the claims administrator denied the benefits because Rossi was not receiving sufficient medical care to be incurring medical expenses.  During the administrative appeal, however, the claims administrator changed his rationale.  The claims administrator denied the benefits because the plan had an exclusion for inpatient care.  The 5th Circuit Court of Appeals reversed summary judgment and remanded the case.

In Sun Life Health Ins., SACV 11-01516, the District Court for the Central District of California held that the claims administrator was not allowed to deny benefits based on factual investigation during the litigation.

In this case, Sun Life granted short-term disability benefits, but denied the plaintiff long-term disability (LTD) benefits.  Sun Life denied the LTD benefits because plaintiff had failed to satisfy the 180 elimination period, and because plaintiff was not employed at the time the medical evidence supported the disability.

During the litigation, Sun Life identified other facts to support its allegation that the claims should be denied.  As a side note, none of the facts raised during the litigation (which never came up during the investigation or appeal) were reviewed by any doctors.

  • First, Sun Life stated that the denial was supported by the fact that plaintiff “did not seek or receive any treatment” prior to the mental-breakdown event.  Sun Life explained that the treatment that plaintiff received after the mental-breakdown event was not his choice.
  • Second, Sun Life stated that plaintiff was unlikely to be disabled because prior to the mental-breakdown, he had gone on a gambling spree.
  • Third, Sun Life stated that after the mental-breakdown but before the hospitalization of plaintiff, plaintiff “appeared to have lived with his family…without incident.”

The district court did two things.  First, it stated that those rationales were inapplicable because they were not raised before and never reviewed by medical professionals.  Second, the court went through the factual rationales and explained why they were unsupported based on the facts.

 

via Don’t Look Back, Something Might Be Gaining On You: Whether a Plan Administrator Can Raise New Bases For Denying a Claim Beyond Those Raised in the Initial Denial of Benefits : Boston ERISA Law Blog.

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