Adjunct Law Prof Blog

Editor: Mitchell H. Rubinstein
New York Law School

Wednesday, April 16, 2008

The Downside of Universal Health Insurance

In Massachusetts, Universal Coverage Strains Care is an interesting April 5, 2008 New York Times article. It reports on patients having to suffer through long waits to see doctors in certain specialities. This is attributed to last year's Massachusetts state law that mandated universal coverage. As the article states:

Now in Massachusetts, in an unintended consequence of universal coverage, the imbalance is being exacerbated by the state’s new law requiring residents to have health insurance.

Since last year, when the landmark law took effect, about 340,000 of Massachusetts’ estimated 600,000 uninsured have gained coverage. Many are now searching for doctors and scheduling appointments for long-deferred care.

Here in western Massachusetts, Dr. Atkinson’s bustling 3,000-patient practice, which was closed to new patients for several years, has taken on 50 newcomers since she hired a part-time nurse practitioner in November. About a third were newly insured, Dr. Atkinson said. Just north of here in Athol, the doctors at North Quabbin Family Physicians are now seeing four to six new patients a day, up from one or two a year ago.

Mitchell H. Rubinstein

April 16, 2008 in Welfare Plans | Permalink | Comments (0) | TrackBack (0)

Thursday, October 25, 2007

Are Retirees Entitled To Health Benefits For Life?

7th_circuit Judge Posner in UMW v. Brushy Creek Coal Co., ___F. 3d___(7th Cir. Oct. 18, 2007), is faced with the issue of whether retirees are entitled to health benefits for life. Like most issue of law, the answer is that it depends. Judge Posner holds that a plan that does not specify a duration is presumed to not extend beyond the life of that agreement. But as Judge Posner notes, if plaintiff can establish that benefits were promised for life, they may be entitled to them.

Plaintiffs here could not meet that burden. Here there was a conflict between the collective bargaining agreement and the plan and the court interpreted the CBA provision to basically be subject to the plan's terms. The plan allowed for modification and therefore, the retirees did not prevail.

This was a tough case. This is a serious problem in employee benefits law that is likely to continue to arise as the cost of heath care continues to rise.

Mitchell H. Rubinstein

October 25, 2007 in Welfare Plans | Permalink | Comments (0) | TrackBack (0)

Thursday, September 27, 2007

Employer Able To Reduce Retiree Health Benefits Because Grievance Over Expired Welfare Plan Found Not To Be Arbitrable

8thseal In Crown Cork and Seal v. IAM, ___F. 3d ____(8th Cir. Sep't. 18, 2007), the union sought to arbitrate a grievance after the employer unilaterally modified a health care plan for retirees who had already retired. The modified plan included premium sharing, increased deductibles and out of pocket limits, decreased hospitalization coverage and elimination of some coverage for dependents.

The court held that the dispute was not arbitrable. The collective bargaining agreements the union was relying on had expired. While the court recognized that the duty to arbitrate can survive the expiration of the collective bargaining agreement, the court held that duty only survives if the parties failed to negate the presumption in favor of arbitrability expressly or by clear implication, citing Nolde Bros. v. Local No. 358, 430 U.S. 243, 251 (1977). Stated another way, the benefits must be considered "vested" under the collective bargaining agreement.

Significantly, here  there were a number of writings which limited benefits "for the life of the agreement." The plan also had a reservation of rights clause which allowed the employer to unilaterally terminate or modify the retiree health care plan. Accordingly, retiree health benefits was not considered vested and therefore, the dispute was not arbitrable.

The 8th Circuit also dismissed the ERISA cause of action because the plaintiffs could point to no provision of the plan which was violated.

This was a tough case. However, the 8th Circuit's legal analysis appears to be sound. The case points to a need for legislative relief in this area which would prevent employers from modifying health care plans of retirees.

Mitchell H. Rubinstein 


September 27, 2007 in Employee Benefits Law, Welfare Plans | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 25, 2007

Disablity Plan Not A Welfare Plan Notwithstanding The Fact That Employer Referred To This Plan As An ERISA Plan In Its Summary Plan Description

6thcir As my students are well aware, it is often difficult to determine whether a certain plan is a "welfare plan" governed by ERISA. In Langley v. Daimler Chrysler Corp., ___F. 3d ____(6th Cir. Sep't. 18, 2007), the 6th Circuit held that the employer's "Disability Absence Plan," which provided payments to employees unable to work, was not an ERISA welfare plan. This was largely because payments were made from the employer's general assets. The court relied on a Department of Labor regulation which states that such programs are considered "payroll practices" and therefore, not an ERISA welfare plan. See, 29 CFR Sec. 2510.3-1(b)(2). Such payroll practices are not regulated by ERISA.

The interesting aspect of this case and why I bring it to your attention is that in the Summary Plan Description, the Disability Absence Plan was specifically referred to. The court concluded in light of the those representations employees could conclude that the plan was governed by ERISA.

Never-the-less, the 6th Circuit held that the Disability Absence Plan was not a welfare plan because the summary plan description was not determinative. To hold otherwise, said the court, would allow an employer to convert an otherwise exempt benefit into one covered by ERISA.

This opinion appears to clearly be correct. The plaintiff did not make any estoppel argument.  The result may indeed be different, if the participant is able to generate some type of detrimental reliance. Apparently, there was no such reliance in this case.

Mitchell H. Rubinstein      

September 25, 2007 in Employee Benefits Law, Welfare Plans | Permalink | Comments (0) | TrackBack (0)