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Current Developments November 2004


Sex Discrimination in Benefits

A California law requires that contraceptive Rx be covered except for religious plan sponsors. A social services organization, not a church for ERISA purposes, however, invoked its philosophical aversion to this state law and refused to pay for such expenses. Litigation ensued in which the court held that the employer’s plan had to cover the benefits.

Catholic Charities of Sacramento, Inc. v. Superior Court of Sacramento County, 85 P.2d 67 (Cal. 2004).

Working Business Owner

Is the working business owner a participant for ERISA purposes? The Supreme Court said yes.

Raymond B. Yates, M.A., P.C. Profit-Sharing Plan v. Herndon, 124 S.Ct. 1330 (2004).

LTD Claim Denial

If the insurer is delays in adjudicating the claim, the participant is free to file a lawsuit without violating the administrative review rules.

Nichols v. Prudential Ins. Co. of America, 306 F.Supp.2d 418 (S.D.N.Y. 2004).

Insured Plan Premium Problem

The fully insured plan lapsed because of nonpayment of premium but no one told the participants. The participant with unpaid claims sued the insurer but the court held for the insurer noting that the insurer was innocent. The fault lay with the employer.

Nakzawa v. Principal Financial Group, 32 EBC 2543 (D. Neb 2004).

LTD Claim Denial

The plan was an employer-promoted employee-pay-all LTD plan. After a claim denial, the participant sought relief as a state insurance law infraction. The court held that the

© 2004 International Foundation of Employee Benefit Plans, Inc. All rights reserved.

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