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Archives for: February 2008
On February 20, 2008 the Supreme Court ruled that a participant in a 401(k) plan can sue the plan sponsor for mismanaging his account. That seems pretty logical, but until that decision, any suit brought against a 401(k) plan sponsor had to be on behalf of the plan (i.e. ALL the participants).
In this instance, (LaRue v. DeWolff), only one participant was harmed when the plan sponsor did not follow his investment instructions. Under the old law, the “plan” was not materially harmed so there would not have been an event to cause a lawsuit. The Supreme Court said what most of us would have said, “This man lost $150,000 and should be allowed to sue for restitution.”
Plan Sponsors Beware: the door is now open for many lawsuits against the plan and the plan fiduciaries. The LaRue case was one example of negligence, but this ruling could allow any of the following scenarios:
On Wednesday, February 20, 2008, the U.S. Supreme Court issued a ruling that overturned the Fourth Circuit Court of Appeals' decision that a participant in a 401(k) plan is prohibited from using provisions of ERISA to recover losses allegedly caused by their employer's failure to carry out investment instructions (LaRue v. DeWolff, Boberg & Associates, Inc., No. 06-856, U.S. Supreme Court [February 20, 2008]). Effectively, the ruling allows James LaRue to try to recover $150,000 the he believes was lost when the plan manager failed to respond to his investment directions, but has the potential to open a floodgate of litigation on defined contribution plan sponsors.
On February 11, 2008, the U.S. Department of Labor (DOL) published a Notice of Proposed Rulemaking to update the Family and Medical Leave Act (FMLA). The stated goal of this update is to improve administration of FMLA for employers and to help workers better understand their rights and responsibilities. Additionally, the proposal includes language that allows for FMLA up to 26 weeks of leave for family members of wounded members of the military and up to 12 weeks of leave for family members of a person who is called to active duty in the military service.
When it comes to your health care, how do you define value?
For a growing number of employers in the region, there's a new, practical approach to answering that question when designing the medical benefit plans that provide health insurance coverage for most workers. Many experts believe the new definition of value could be the silver bullet for the health care cost crisis. Yet this new means of determining "value" is controversial and would limit the availability of certain services and procedures to those enrolled in health plans.
This new definition of health care value, known as "value-based benefits," determines the amount of coverage based on the value a patient receives from the product or service. In other words, how critical is it to one's life that he or she undergo a particular procedure or take a particular medication?
Read the complete article by Cowden Associates' Vince Wolf in the Pittsburgh Post-Gazette.