Ohio lawyer

  Employees in Chicago that are participants in any   employee benefit plans   should pay attention to the growing divide among Courts of Appeals over whether "satisfactory to us" is language in a plan sufficient to vest the plan administrator with discretion to interpret plan terms and make benefit determinations. When the administrator has such discretion, a court reviewing the administrator's decision will do so under an abuse of discretion standard--whether the decision was reasonable, not whether it was right. The United States Court of Appeals for the Third Circuit joined the ranks of courts in holding such language requiring a participant to provide proof of a loss "satisfactory to us" does not confer discretion on the administrator of the plan. Viera v. Life Insurance Company of North America, No. 10-22810, Slip Op. at 19 (3d Cir. June 10, 2011). The Third Circuit joined the ranks of the Second, Seventh, and Ninth Circuits in holding that this sort of la...

  Executives, professionals and other employees in Chicago frequently call my office to ask what the statute of limitations is in an   ERISA case   (i.e., the measure of how long the potential claimant has to file a lawsuit under ERISA). Depending on the type of case, employees can end up more confused after asking that question than before. One recent case discussed when a claim accrues (i.e., the clock on the applicable statute of limitations begins ticking) in the context of a   cash balance plan   that paid lump sum distributions pursuant to an illegal plan term that set the actuarial value of the distribution. In Thompson v. Retirement Plan of S.C. Johnson & Son, Inc., No. 10-3917 (7th Cir. June 22, 2011), the United States Court of Appeals for the Seventh Circuit held that the limitations period began running when participants received their lump sum distributions from the employer's cash balance plan. Under a cash balance plan, participants recei...

  Employees covered by   employer sponsored health insurance plans   often encounter the situation where a doctor or medical staff recommends a procedure, and advises the employee the procedure is covered by insurance, only for you--the employee--to get a denial of claim for benefits letter from the insurer afterwards. Countless of these individuals feel that the denial is the hospital's problem; after all, the hospital staff told you the procedure was covered. And if the hospital wants to be paid, it can fight the insurer. Many individuals wait to contact a lawyer until they are faced with lawsuits by the hospital for unpaid bills. If you wait until then, often there is little any lawyer can do to help. Several recent cases display just how ERISA governs this three-way battle between the participant, the insurer, and the medical service provider. In IHC Health Services, Inc. v. Fiesta Palms, LLC, No. 2:10-cv-1156 (D. Utah May 24, 2011), the medical service provider ...

  Executives in Chicago and the Midwest, especially working for small to mid-size employers, often negotiate into their employment agreements some form of deferred compensation and/or severance compensation. Until the relationship between executive and employer sours, the parties only think about the tax considerations of   executive compensation . But when there is a dispute between employer and executive, and the executive must take measures to enforce the agreement, the question becomes whether the compensation is covered by ERISA or not. Results are mixed, and always turn on a fact specific inquiry. Consequently, there are no hard and fast rules. One such executive recently filed a complaint in state court and faced a motion to remove to Federal court under ERISA by his former employer.  See  Hoffner v. Bank of Choice Holding Co., No. 11-266 (D. Colo. June 21, 2011). In that case, the bank entered into an "Executive Salary Continuation Agreement" with Mr. Hoffner...

  Crain's Chicago Business published an   article   today about Chicago-based   ComPsych Corp.   executing several new agreements worth tens of millions of dollars with employers nationwide to provide employee assistance programs ("EAPs"). The article references how during difficult economic times, employees utilize these programs more. There is a greater onset of alcohol or substance dependence. Likewise, these EAPs have expanded to include counseling for managing marital problems, stress and obesity. I highly praise these programs for helping employees manage difficult problems. However, a central purpose of these programs is still to help employers by mitigating the extent to which life's obstacles decrease employee productivity. While many of life's obstacles are of the sort that can and should be properly addressed with an EAP, often executives, professionals and other employees overlook the employer's   disability insurance plan . Sometimes, an employ...

 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. Federal crimes lawyer . 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. 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)), the GM executives appear to also hav...

 Employees in Chicago and the rest of Illinois lost another potential remedy in ERISA disputes yesterday, but may have gained others. The Supreme Court issued its opinion in Cigna v. Amara yesterday, which arrested any expansion of a remedy for a claim for benefits due under ERISA § 502(a)(1)(B), but may have expanded "other appropriate equitable relief" under ERISA § 502(a)(3). Cigna v. Amara concerned an employer's conversion from a defined benefit pension plan to a cash balance plan. The new plan contained "a phenomenon known in pension jargon as 'wear away'". Id. at 8. In a "wear away," employees could be required to work for several years, or 6-10 in this case, for benefits accruing under the new plan to catch up to those existing under the old plan, effectively resulting in employees working for 6-10 years accruing no benefits. Cigna, however, failed to tell this to its employees in the required disclosures. The employees claimed they w...

  Employees covered by a group health or life insurance plan in Chicago have all heard the stories of the insurer that accepted premium payments for years, and suddenly upon receiving a large claim, asserts the employee did not qualify for coverage. Insurance companies consistently got away with this. But after Cigna v. Amara, employees may finally have a remedy against this sort of sneaky conduct. According to the Supreme Court in Amara, a participant in an ERISA employee benefit plan can "surcharge" a fiduciary for a breach of fiduciary duty. In Amara, the fiduciary failed to disclose a reduction in benefits to the participants in the summary plan description. Marital property division . This of course begs the question: what about the insurer that tells a participant she is covered or pre-authorizes a claim, but then refuses to pay? The same day the Supreme Court issued its opinion in Amara, a Court of Appeals rendered a decision rejecting an argument made by the Departm...

  My office receives calls daily from employees, executives and managers in Chicago who claim their health insurance will not pay for a procedure. Some of the time, the plan does not even dispute that the claimed treatment or procedure is covered by the plan. So why won't the plan pay? The answer is two words: reimbursement and subrogation. The plan claims that it once paid benefits due to an injury caused by a third party and you recovered for that injury. I have seen plans withhold benefits years after the purported overpayment. After Great-West Life & Annuity Insurance Co. v. Knudson and Sereboff v. Mid Atlantic Medical Services, Inc., many plans have gotten particularly aggressive in enforcing subrogation and reimbursement rights. Nearly all plans include language to the effect that if the plan pays benefits for an injury caused by a third party, and you recover anything from the third party, by judgment or settlement, then the plan must be reimbursed. They also often stat...

  For employees in Chicago, your rights under ERISA continue to change as a result of the Supreme Court's recent decision in CIGNA v. Amara. As discussed in an earlier post, ERISA § 502(a)(1)(B) cannot be used to claim benefits due but for a breach of fiduciary duty where the plan administrator made a misrepresentation about the plan by failing to disclose a material term in the summary plan description (SPD). The Supreme Court made up for it, though, by expanding the scope of relief under § 502(a)(3), permitting participants to seek reformation of the plan to match what the administrator told participants, or to even recover monetary compensation from the administrator under the "surcharge" theory that has the ERISA community buzzing. One week after its opinion, the Court overturned another portion of the lower court's ruling, one that denied the employees' request to reinstate the pension plan because CIGNA did not disclose key negative elements of its adopted ...

  Employees covered by employer sponsored health insurance plans often encounter the situation where a doctor or medical staff recommends a procedure, and advises the employee the procedure is covered by insurance, only for you--the employee--to get a denial of claim for benefits letter from the insurer afterwards. Countless of these individuals feel that the denial is the hospital's problem; after all, the hospital staff told you the procedure was covered. Lawyer office in Ohio . And if the hospital wants to be paid, it can fight the insurer. Many individuals wait to contact a lawyer until they are faced with lawsuits by the hospital for unpaid bills. If you wait until then, often there is little any lawyer can do to help. Several recent cases display just how ERISA governs this three-way battle between the participant, the insurer, and the medical service provider. In IHC Health Services, Inc. v. Fiesta Palms, LLC, No. 2:10-cv-1156 (D. Utah May 24, 2011), the medical service pro...

 Employees in Chicago now have even more reason to know about employer-provided health plans and their rights to reimbursement and subrogation. Should you experience any type of accident or injury caused by another party, you may need to use your own health insurance to cover the medical expenses incurred from the accident until obtaining a settlement from or judgment against the party causing the injury. Invariably, the health insurance company or fund will demand reimbursement for any expenses it covered that were caused by the other party. EB5 lawyer in Ohio . Following Great-West Life & Annuity Insurance Co. v. Knudson and Sereboff v. Mid Atlantic Medical Services, Inc., plans have become particularly aggressive in seeking such reimbursement. Nobody previously considered your own health plan making a claim against your own automobile insurance policy, though. But that might change after a recent decision from the Sixth Circuit Court of Appeals in Shaffer v. Rawlings Co. Th...

  With another Chicago summer approaching, good news is in store for its financial executives. Like the outlook of warmer weather ahead, executives' compensation is "warming up," evidenced by fewer salary freezes and more pay increases compared to the past few years. The Financial Executive Compensation Survey's collection of data recently gathered recognizes an overall improvement in both companies' and executives' individual economic outlooks. In conducting the survey, Thomas Thompson, Jr., of the Federal Executives Research Foundation consulted with more than 1000 corporate executives - with about half of the executives being Chief Financial Officers - who chose to participate in the survey. The survey, released on May 19th, noted a .9% increase in base salary increases in both private and public companies, moving from 2.1% in 2010 to 3% in 2011. Although private companies boasted an average $2,000 increase in base salary (moving from $204,800 to $206,800...

  Executives and employees participating in employee benefit plans in Chicago received a reminder this week about why it is important to keep track of your benefit plans' beneficiary designations, and update those designations when appropriate. Many people may think they can enter into binding agreements with others, such as family members or former spouses, about entitlement to or waiver of benefits under an employee benefit plan, like a pension or life insurance. Lawyer office in Ohio . However, if the plan is one covered by ERISA, those agreements, even if part of an agreed court order, will have no bearing on what the benefit plan administrator does with any proceeds if inconsistent with the beneficiary designation. The United States Court of Appeals for the Seventh Circuit reiterated this point in Jackman Financial Corp. v. Humana Insurance Co., No. 10-2112, Slip Op. (7th Cir. May 31, 2011). In that case, Mr. Torrence was a participant in a group term life insurance policy of...

 Executives in Chicago may be puzzled to begin seeing vague references to new compensation clawback policies in their executive employment agreements. Section 954 of the Dodd-Frank Wall Street Reform Act requires, as a condition of the employer's securities being listed on a national securities exchange or association (such as NYSE, NASDAQ, etc.), if the employer must restate any financial statements because of "material noncompliance" with the securities laws, then the issuer will recoup from any current or former executive officer during the 3 years preceding the date the employer had to restate those financial statements all amounts paid in incentive based compensation that exceeds what would have been paid under the restated financials. Executive Compensation lawyers who advise employers mostly agree the executive employment agreements need to mention the clawback policy. However, the employers' lawyers advise to avoid being specific about the terms of the clawba...

  Employees of privately held companies in Chicago and the Midwest have tremendous opportunities and risks ahead, as the baby-boomers who own those companies get set to retire. Generally, an owners of a privately held business has two choices when it comes time to retire: pass the business on to a family member, or sell it. Passing the business on to a family members is often not feasible. Many of these baby-boomers built the sort of business that required a lot of elbow grease. Meanwhile, they sent their children to the best schools and encouraged them to pursue other sorts of careers: accounting, finance, medicine, law, etc. Lawyer office in Ohio . Therefore, the boomers will look to sell those businesses. But as there likely will be more boomers retiring in the next decade than entrepreneurs looking to buy the businesses, selling the business to the employees via an Employee Share Ownership Plan (ESOP) will likely become more commonplace. If you are an employee in such a company...

  Employees in Chicago that are participants in any employee benefit plans should pay attention to the growing divide among Courts of Appeals over whether "satisfactory to us" is language in a plan sufficient to vest the plan administrator with discretion to interpret plan terms and make benefit determinations. When the administrator has such discretion, a court reviewing the administrator's decision will do so under an abuse of discretion standard--whether the decision was reasonable, not whether it was right. The United States Court of Appeals for the Third Circuit joined the ranks of courts in holding such language requiring a participant to provide proof of a loss "satisfactory to us" does not confer discretion on the administrator of the plan. Viera v. Life Insurance Company of North America, No. 10-22810, Slip Op. at 19 (3d Cir. June 10, 2011). Lawyer office in Ohio . The Third Circuit joined the ranks of the Second, Seventh, and Ninth Circuits in holding...