Health Plans

On February 20, 2018, the Supreme Court decided CNH Industrial N.V. v. Reese, 574 U.S. ___ (2018), which raised, for the second time in three years, the question of how courts should interpret collective-bargaining agreements (“CBAs”).  Reese involved a dispute between retirees and their former employer, CNH, about whether an expired 1998 CBA created a vested right to lifetime health benefits.  In a per curiam opinion, the Court found that a straightforward reading of the CBA compelled the conclusion that retiree health benefits expired when the CBA expired in 2004.  The Court’s opinion emphasized the significance of CBA expiration dates for retiree health benefits and forcefully reiterated its decision in M&G Polymers USA, LLC v. Tackett, 574 U.S. ___ (2015), that collective-bargaining agreements must be interpreted according to “ordinary principles of contract law.”
Continue Reading Supreme Court Deals Another Blow to Sixth Circuit’s “Yard-Man Inferences”

A recent Supreme Court decision, Perez v. Mortgage Bankers Ass’n, highlights two important points about the authority of the U.S. Department of Labor, IRS, and other administrative agencies to interpret rules:

  1. U.S. courts will generally follow administrative interpretations of statutes and an agency’s regulations, except in rare circumstances. This deference extends to “sub-regulatory” guidance, like opinion letters, rulings, notices, amicus briefs, and probably even FAQs posted on a website; and
  2. Agencies have wide latitude to change their minds on interpretive guidance, without any obligation to consult with the public.

The decision illustrates the practical importance of getting involved in the regulatory process, and advocating for important clarifications before regulations are finalized. Although agencies may change interpretive guidance unilaterally, unambiguous regulations generally cannot be changed without advance notice and an opportunity to comment.

Background.  This case involved whether mortgage-loan officers are eligible for overtime under the Fair Labor Standards Act.
Continue Reading Supreme Court Ruling on Agency Flip-Flopping Affects Rules for Benefit Plans

The HIPAA / HITECH omnibus rule published in the Federal Register late last week includes a number of changes that will require action by employers, health plans, and business associates in the coming months.  The new requirements take effect on March 26, although group health plans and business associates have until September 23, 2013, to comply with most of the new requirements. 
Continue Reading New HIPAA / HITECH Rule Requires Health Plan Changes