Compliance: Court rulings show adherance to 'unambiguous' ERISA plans only
The danger for plan sponsors and administrators is that plan terms that are not clear will be construed against them using equitable principles.
January 29, 2014 at 03:00 AM
9 minute read
The original version of this story was published on Law.com
Last year, the U.S. Supreme Court issued its ruling in US Airways, Inc. v. McCutchen, holding that while equitable doctrines cannot “trump” the terms of an ERISA plan, they can be used to interpret, construe and fill gaps in language where plan terms are ambiguous. The important corollary to that rule, as noted in the McCutchen opinion, is that courts are not permitted to rewrite the terms of an ERISA plan when they are clear, plain and unambiguous.
To date, there has been no notable analysis of McCutchen in a court of appeals opinion. A handful of district court cases, however, have analyzed McCutchen and demonstrate how clear and unambiguous plan terms can successfully avoid the unintended application of equitable doctrines to plan terms.
McCutchen involved a self-funded health plan. The plan's terms allowed it to recover health benefits paid to a participant when that participant recovered from third-party sources, such as a tortfeasor or other insurer. Specifically, the plan stated, “[y]ou will be required to reimburse [US Airways] for amounts paid for claims out of any monies recovered from [the] third party.”
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Trending Stories
- 1The Law Firm Disrupted: For Big Law Names, Shorter is Sweeter
- 2Wine, Dine and Grind (Through the Weekend): Summer Associates Thirst For Experience in 'Real Matters'
- 3The 'Biden Effect' on Senior Attorneys: Should I Stay or Should I Go?
- 4BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 5First Lawsuit Filed Alleging Contraceptive Depo-Provera Caused Brain Tumor
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250