Benefits February 12, 2013

Employers Consider Adjustments for PPACA Costs

February 12, 2013 (PLANSPONSOR.com) – A LIMRA survey found more than half of U.S. employers have increased or plan to increase deductibles, co-pays or employee contributions to cover the cost of their medical plans.
Reported by

The majority of U.S. employers (52%) said the Patient Protection and Affordable Care Act (PPACA) will negatively impact their businesses, and only one in 10 employers feel their employees understand what the full impact of the health care reform will have on their businesses. In addition, almost one-third of employers feel the health care reform law will negatively influence their employees’ ability to afford health care over the next three to five years.  

U.S. employers are considering eliminating non-medical benefits as a way to defray the increasing costs of medical care. Thirty-five percent of employers said they would consider eliminating accident insurance within three to five years due to health care reform, and 33% would consider eliminating critical illness insurance.  

Get more!  Sign up for PLANSPONSOR newsletters.

Twenty-eight percent of employers, each, cited accidental death and dismemberment insurance and long-term disability insurance as benefits they would consider eliminating. Twenty-seven percent chose vision care, 26% chose dental insurance, and one-quarter, each, said they would consider eliminating short-term disability insurance and life insurance.
Compliance February 12, 2013

Participant Cannot Exhaust Remedies Not Provided

February 12, 2013 (PLANSPONSOR.com) – An appellate court has ruled that a pension plan participant can pursue her claims in court because the plan document does not provide administrative remedies for her to exhaust.
Reported by

The 2nd U.S. Circuit Court of Appeals held that when a plaintiff reasonably interprets a plan’s terms not to require exhaustion of her administrative remedies and does not exhaust her remedies as a result, she is not required to exhaust her administrative remedies. Halliburton argued that Kathy Joy Kirkendall should have filed a claim for benefits pursuant to Article III of the plan’s Claims Procedures prior to bringing suit in federal court.    

According to the court opinion, Article III begins with the words, “To file a benefit claim under the Plan.” However, Kirkendall did not seek to retire immediately, but rather sought to know what her benefits would be if and when she chose to pursue early retirement. The court determined the term “benefit claim” as set forth in the plan could be read to apply only when a plan participant is demanding benefits at the time when she is filing the claim. “It is unclear, therefore, whether Kirkendall’s inquiry as to the amount of her benefits in the event of a future, hypothetical event was a ‘benefit claim’ within the meaning of the Plan such that it would be governed by the Article III Claims Procedures,” the court wrote.  

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The court also said the fact that when Halliburton sent Kirkendall a benefits quote in 2006, the cover letter described the enclosed claims form as an “Application for Retirement Benefits” compounded the confusion. “This language likewise suggests that Kirkendall should resort to this form only if she wanted to receive her benefits in the immediate future.”  

The lawsuit was filed by longtime employees of Dresser-Rand Company. Dresser-Rand was a partnership, first between Dresser Industries Inc. and Ingersoll-Rand Company, and later between Halliburton Inc. and Ingersoll. In 2000, Halliburton sold its interest in Dresser-Rand to Ingersoll and subsequently informed Dresser-Rand employees that, for pension plan purposes, it now considered their date of termination to be March of 2000. As a consequence, the employees’ newly-quoted pension benefit for the amount they would receive if they retired early was not as high as previously quoted to them.  

The opinion in Kirkendall v. Halliburton is here.

«