An embarrassment of riches, as the saying goes. That’s what the avalanche of excellent stories, publications, podcasts, YouTube videos and posts about ERISA, litigation and insurance issues looked like to me this week.

But for my own purposes (namely having time to do my work), this weekly post is limited to five of them, so here are the five I selected this week.

1. The newest and in some ways most important front opened in class action litigation against plan sponsors and fiduciaries involves so-called voluntary benefits, which encompasses an entire range of additional employee benefits that employers often offer. The lawsuits have their own importance, related to the question of whether ERISA makes employers liable for any excessive costs of those products or profit taking by the vendors. But the cases also have a stalking horse aspect to them, in that they are being used to test out whether brokers and benefits consultants can be tagged as fiduciaries in health benefit litigation. Most of the stuff going on with these cases at this point is really still inside baseball for now. However, the lawsuits raise some real questions and issues for employers who continue to provide these types of benefits and want to avoid litigation risk from doing so. This Vorys Benefits Brief discussing these types of claims is helpful in that regard.
2. This is a great blog post on a new decision finding that an insurer could have a policy reformed to eliminate coverage for a claim, by adding back into the policy an exclusion that the insured knew was intended by both parties to be included in the policy but that had been inadvertently omitted. Insurers are often too quick to reject the idea of fighting for an interpretation of the policy, or here for reformation, that is consistent with the extrinsic evidence as to the scope of coverage, believing that a court will ignore that evidence in favor of interpreting the actual policy language in favor of the insured if the language itself is unclear for some reason. I am always on the lookout for cases that prove the opposite and that might dissuade insurers from taking that default approach to coverage disputes. This one is a good example to cite.
3. ERISA is rife with “if it looks like a duck, and quacks like a duck, then it is a duck” problems. To me, the quintessential example of this is preemption. It can often be hard to find a principled reason why one case and scenario results in preemption and another doesn’t. Moreover, the tests for preemption are sufficiently imprecise that preemption of a statute or cause of action can often be in the eye of the beholder, leading to an analysis that basically adds up to “if a state statute or cause of action looks like its preempted, and acts like its preempted, then it is preempted.” A similar problem bedevils the question of when different types of compensation plans fall within ERISA, or instead are simply subject to state employment and contract law. If you’re not careful in drawing a line between what is subject to ERISA and what remains subject to state law, ERISA can end up being interpreted to capture various types of employment compensation plans that it was probably never meant to capture. Here is a great write up of a new Fourth Circuit decision explaining why Merrill Lynch’s long term incentive plan for its financial advisors falls outside of ERISA. In making that decision, the Court gave significant guidance to others trying to figure out where the border is between ERISA and state law when it comes to various types of compensation plans.
4. I was retained to litigate my first top hat plan case about twenty years ago, when a very experienced commercial and business litigator discovered that what he thought was a contractual dispute over a non-competition clause and its impact on certain deferred compensation owed to his client was in fact an ERISA case, which he learned when defense counsel removed the complaint he had filed to federal court. I loved that case – we turned the tables back on defense counsel, who had thought that moving it into an ERISA framework would backfoot plaintiff and his counsel, really quickly. I think this post on LinkedIn from the other day is one of the best summaries of the law of top hat plans if, like my co-counsel on that case back in the day, the issue crosses your desk for the first time.
5. You know why I am fascinated by COBRA issues? Because in a world where health insurance is closely tied to employment, it shouldn’t be all that hard or complicated to provide health insurance benefits to departing executives and other employees, and yet it is. Here’s the second installment in Brian Gilmore‘s excellent series on providing COBRA benefits to departing execs. (I covered the first in the series in last week’s Five Favorites for Friday, if you are looking for it).