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What to Do if Your Employer Clearly Says It Will Not Pay Your Pension Benefit

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  Employees in the Chicago area, and elsewhere, come to expect that when their employer sponsors a   pension plan , or other type of benefit plan, and promises a benefit, that the employer will honor that promise. That is, unfortunately, not always the case. The first question, though, is what to do about it when the employer, which is usually acting as the plan's administrator, clearly says it will not pay the benefit?  https://askcompetentlawyer.com/covid-19-related-employment-litigation/   The natural inclination is to want to file a lawsuit, and many people have done that immediately, only to be disappointed by having wasted so much time by failing to exhaust administrative remedies. But why should a claimant have to make an administrative claim to the plan when the employer unequivocally states it will not pay a benefit? The Eight Circuit Court of Appeals analyzed this very issue in   Angevine v. Anheuser-Busch Companies Pension Plan , 646 F.3d 1034 (8th Cir. 2011). In  Angevi
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Who Do You Sue Under ERISA When Your Health Insurance Claim is Denied?

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  Employees of Chicago area employers that participate in an employer sponsored group   health insurance plan   often assume if and when their claim is denied, they must sue the insurance company. But that is not always the case in litigation under the Employee Retirement Income Security Act of 1974 ("ERISA"). The insurance company is undoubtedly the party with whom the employee or other covered participant has had communications, and received a denial letter from. But the inquiry does not stop there. In the case of a health insurance plan that is fully insured, meaning the insurance company bears the financial risk, then the insurer will undoubtedly be a fiduciary under the plan. But in the case of large employers, the plan is often self-funded, and the insurance company merely acts as a claims administrator. The question then is whether the insurance company exercised any discretionary authority or control over approving or denying the claim.  See  ERISA § 3(21)(A). In Wess
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GM Retirees Sue over Executive Retirement Plan Benefits

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  Executives in Chicago and the Midwest may be excited to hear about all the General Motors executives suing to recover   executive retirement plan benefits   from a previously bankrupt employer. Often, when executives have such retirement plans, commonly referred to as SERPs (or "top hats"), the participants can expect to receive little or nothing if the employer becomes insolvent. That is because   ERISA § 201(2)   top hat plans are exempt from ERISA's funding, vesting, and fiduciary responsibility protections, though are still enforceable as ERISA plans.  https://askcompetentlawyer.com/civil-litigation/   The General Motors that emerged from bankruptcy assumed much of the pre-bankrupt retirement plan obligations, but the credit agreement with the United States Treasury required that certain obligations, including pension obligations, be reduced. Like most executives and managers who have such non-qualified deferred compensation or excess benefit plans (ERISA § 3(36)),
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Michigan Court Does Not Enforce State Ban on Discretionary Clauses in Long Term Disability Plans Where the Policy Was Issued in Another State

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  Employees in Chicago, and all over Illinois, are starting to become more aware of a state law ban on discretionary clauses in various insurance policies that fund their employee benefit plans, such as   long-term disability ,   health insurance , and   life and accidental death insurance . In 2005, the Illinois Department of Insurance enacted 50 Ill. Adm. Code § 2001.3, which bans insurers offering or issuing long term disability, health, or life or accidental death insurance policies in Illinois from having a discretionary clause in any "policy, contract, certificate, endorsement, rider application or agreement". However, this regulation only applies to insurance policies issued or offered in Illinois. If you work in Illinois, how do you know then whether you have protection from this ban on discretionary clauses? The answer is not as simple as one might expect. Where an insurance policy is issued or offered can be a tricky question to answer. It may involve looking at the
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Pension Fund Cannot Terminate Participant's Benefits Because the Employer Stopped Contributing

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  Employees of Chicago companies that are subject to a collective bargaining agreement ("CBA") frequently wonder what will happen to their   pension benefits   if the employer goes belly up, or otherwise does not contribute to the pension fund. Sometimes the owners of these small employers are also employees themselves who perform work for the employer, the scope of which is covered b the CBA. The problem is that multiemployer plans depend on contributions from the employers that sign the CBA to fund the benefits the plan promises, so will the plan pay benefits to an employee or owner-employee from a non-contributing employer? The answer is almost always yes, unless the fund must impose benefit restrictions due to its funding level. Multiemployer plans are permitted to sue noncontributing employers for delinquent contributions under ERISA § 515.  https://askcompetentlawyer.com/  But the plan may not withhold benefits from employees, or even owner employees, in order to enforc
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Forum Selection Clause in Disability Plan Held Unenforceable

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  Chicago area employees with coverage under an employer-sponsored long-term or short-term   disability plan   may be surprised to find out that when drafting the plan, their employer inserted a clause purporting to require that you have to file your lawsuit in a distant state if your claim is denied and you have to sue for your benefits. In fact, the Department of Labor has filed briefs in cases opposing such clauses, noting there is a "disturbing trend" among employers to place such clauses in their plans.  https://askcompetentlawyer.com/medicare-medicaid-fraud/   In Chicago, one court put a stop to that trend in a case I am handling. In  Coleman v. Supervalu, Inc. , No. 12-7064, 2013 U.S. Dist. LEXIS 13372 (N.D. Ill. Jan. 31, 2013), Ms. Coleman sued Supervalu because its claims administrator denied her claim for disability benefits. After she sued, Supervalu moved to dismiss the lawsuit, citing a provision in the plan that purports to require any employee covered by the pl
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9th Circuit Permits Benefits Claim Against Insurer

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  Employees that participate in group   health insurance   or group   disability insurance   plans through their employers obtained another victory today.  https://askcompetentlawyer.com/   The United States Court of Appeals for the Ninth Circuit held that participants who bring claims under   ERISA § 502(a)(1)(B)   for benefits due under the terms of the employee benefit plan may sue the third party insurer--the insurance company from whom your employer buys insurance for the particular benefit plan--for those benefits. In Cyr v. Reliance Standard Life Insurance Company, Ms. Cyr received disability benefits under the employer's disability insurance plan insured by Reliance Standard. She sued her employer, alleging it discriminated against her by paying her approximately half of what it paid male employees with similar qualifications. Cyr prevailed, and won a retroactive salary increase. She then demanded Reliance Standard increase her disability benefit payments to reflect the ret
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