Supreme Court Rules on Important ERISA Case
When it comes to retirement savings, most people would agree that it is a complicated and stressful issue. To help prepare, individuals around the country rely on a pension plan to help guarantee their long term savings. With so much riding on such policies, plan holders need to be fully aware of their policies and stay fully apprised as to the significant legal changes regarding retirement coverage.
CIGNA Corporation v. Amara (09-804) is a civil case that was appealed to the Supreme Court. The case stems from CIGNA employees bringing a suit against their employer for changes made to their ERISA (Employee Retirement Income Security Act) plan. The company notified employees of the change via the company newsletter, which suggested that the changes would lead to greater benefits to employees. After reviewing the details of the policy change, employees contended that such improvement did not exist and took their objections to court. The case was originally heard in a district court, which sided with Amara et. al., and after CIGNA appealed the ruling, the Supreme Court heard the case as well.
The final verdict validated the lower court’s ruling, agreeing that CIGNA had misled employees and not provided sufficient information regarding the true impact of the changes. This verdict is a real win for employees in all industries since many employers have tried modifying their pension plans and other insurance policies recently in an attempt to save money and streamline costs. The CIGNA case gives employees the groundwork needed to take a stand against such changes, as long as it can be proven that the changes were improperly enacted.
However, the final ruling from the court was not a total win for employees. The CIGNA case also set the precedent that employers are not required to change a plan even if modifications are poorly communicated. While CIGNA was ordered to pay compensation to employees for being negligent in communication, the plan itself did not have to be changed, therefore staying in place for future employees.
While the ruling on Amara v. CIGNA does not solve the many problems associated with a pension plan, the case does provide some strong precedents for all employees regarding their rights. This means that employees should be especially vigilant regarding changes to their ERISA policies. Likewise, employers should be very careful in their communication of changes. Ultimately, the ruling is a lesson in clarity and awareness, empowering all parties to be certain and secure in all their policy decisions. It is always wise to have an experienced ERISA Claims lawyer working for you, if your ERISA Claim is denied. The insurance companies are only looking out for their own best interest. You should also protect yours.
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.