Plan Drafting

We recently observed that ERISA gives employers considerable leeway to design plan rules that fill in gaps in ERISA.  A recent Second Circuit case, Thurber v. Aetna Life Ins. Co., illustrates two important ways that plan drafting can meaningfully affect the outcome of litigation involving the plan:

  • First, a plan may specify the standard of review that a court must apply in a dispute.
  • Second, plan language can affect a plan’s ability to recover overpayments.

The case illustrates that good language that fills in gaps can save a lot of money.  In contrast, not filling in gaps — or having language that is not clear — can prove costly.
Continue Reading Second Circuit Reinforces Plan Drafting Opportunity for Employers

In its recent decision in U.S. Airways v. McCutchen, all nine justices of the Supreme Court agreed that equitable principles do not override the clear terms of an ERISA plan.  Although a majority of the Court went on to find that the plan at issue was ambiguous, the decision makes clear that plan documents—when clear—may fill in gaps in areas that ERISA does not prescribe.  Employers may wish to address several of these areas in plan documents.  The McCutchen case shows that identifying these areas and drafting clear plan language can help achieve the plan sponsor’s objectives.
Continue Reading Supreme Court’s McCutchen Decision Highlights Plan Drafting Opportunity