Welfare Benefit Plan ERISA News
November 2011

Importance of Careful SPD Drafting

A federal court recently held that 47 former Citigroup employees must exhaust the administrative claim remedies contained in their Summary Plan Description before they can pursue litigation alleging that their employer had underpaid benefits. There are two reasons plan sponsors want to make plan participants go through the claim procedures before filing a lawsuit. First, claim procedures are much less expensive than litigation. Second, most courts will apply a favorable standard of review to a plan administrator's decision reached as part of the claims process. That is, the court will only overturn the plan administrator's decision if it was arbitrary and capricious.

Although PPACA has diluted the Claim Fiduciary's judgment under the law for most health plans (e.g., PPACA's review procedures allow an appeal to an IRO for external review of medical judgment decisions or rescissions), employers/Plan Sponsors should make sure that any ERISA plans they maintain have claims procedures that include the "Firestone" language. Quigley v. Citigroup Supplemental Plan, 51 EBC 1065 (S.D.N.Y. 2011)

$6.8 Billion Spent on Inappropriate Healthcare

The top 5 unnecessary practices, according to the study were:
  Excess $ Excess %
Brand-name cholesterol Rx $ 5.817 B 35%
Bone Density Scans $527.4 M 1%
CT, MRI for low back pain $175.4 M 17%
Antibiotics for virus $116.3 M 41%
Routine Labs $ 32.7 M 56%
Auditing Eligibility After Healthcare Reform
Auditing health plan eligibility can create significant cost savings and improve general enrollment and administrative processes. Whether or not a formal, standalone audit is involved, significant compliance issues must be considered, including important impacts under health care reform. In this 90-minute web seminar, experts will help plan sponsors, service providers, and advisors evaluate the pros and cons of audits, understand the logistics and legal issues, and plan effective eligibility audits for employer health plans.
ERISA Trivia
When ERISA was enacted in 1974, it was so complex and unpopular that the law was dubbed with a less flattering name than than Employee Retirement Income Security Act. If you know what it is, send it in. The answer and winners will be announced in our next newsletter.

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© 2017 ERISAPros, LLC, All rights reserved. Information on ERISAPros' website, its newsletter, “News & Views,” and its blog, “ERISA Wonk,” is published as a general informational source. Information and articles are general in nature and are not intended to constitute legal or tax advice in any particular matter. Blog posts and comments reflect the personal views of their respective authors - not those of ERISAPros. Transmission of this information does not create an attorney-client relationship. ERISAPros, LLC is not a law firm and is not giving legal or tax advice. It does not warrant and is not responsible for errors or omissions in the content on its website or in its newsletters. ERISA is a complicated and confusing law. Summary Plan Descriptions (SPDs), Wrap Plan Documents, and Form 5500s require review and updating by qualified ERISA compliance professionals.


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