Welfare Benefit Plan ERISA News
May 2016

Employer Reimbursement of Individual
Health Policy Premiums


PROBLEM"... A product some promoters market alleges use of the product allows employers to reimburse individual health policy premiums without violating the Departments' market reforms. ... We have been made aware of a number of these schemes, and in looking at the information we have been presented we disagree with the promoters' claims that their product does not impose an annual limit on essential health benefits. Consequently, their product fails to meet the market reforms." (IRS)

Bad COBRA Notices Can Cost You
Health Plan/SunTrust Bank was sued in a class action challenging its COBRA notice. The plaintiffs who brought the lawsuit claimed that the COBRA notice was materially deficient in that it failed to provide the name and address of the party responsible under the plan for COBRA administration and that it failed to provide an adequate explanation of the plan's procedures for electing COBRA. Instead, the notice directed plan participants to a general human resources website and phone number. In order to settle the litigation, SunTrust has agreed to modify its notice to identify "My HR" as the party responsible for administering COBRA benefits and to identify the specific location on the My HR website where information regarding COBRA coverage and a COBRA election form can be found. The notice also provides an alternative means to obtain an election form, specifically saying that it will be mailed to a participant upon request. (Angela Bohmann)

ERISA Plan's Noncompliance with Claims-Procedure Rule Prompts De Novo Review Absent Harmless Mistake

"The DOL advises plans that certain inadvertent and harmless errors will not trigger de novo review. The Second Circuit saw no reason why courts should not also tolerate such minor deviations, but cautioned that the deviations should not be tolerated lightly. Accordingly, the court held that when denying a claim for benefits, a plan's failure to comply with the claims-procedure regulation will result in the claim being reviewed de novo, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply was inadvertent and harmless." [Halo v. Yale Health Plan, No. 14-4055 (2d Cir. Apr. 12, 2016)] (Wolters Kluwer Law & Business)
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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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