Latest news with #EmployeeRetirementIncomeSecurityActof1974
Yahoo
13-05-2025
- Business
- Yahoo
New push from Kaine aims to close retirement gap for Virginia's youngest workers
U.S. Sen. Tim Kaine, D-Va.. (Photo by Ned Oliver/Virginia Mercury) U.S. Sen. Tim Kaine, D-Va., is backing bipartisan legislation aimed at helping workers as young as 18 — particularly those who enter the workforce straight out of high school — gain access to employer-sponsored retirement plans, a benefit many currently don't receive until age 21. On Monday, Kaine, a member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, teamed up with HELP Committee Chair Bill Cassidy, R-La., to reintroduce the Helping Young Americans Save for Retirement Act. The bill seeks to eliminate regulatory and financial barriers that discourage employers from offering retirement benefits to younger employees, a gap that disproportionately affects low-income and non-college-bound workers. 'Contributing to a retirement plan early on sets people up for financial security in the future,' Kaine said. 'I'm proud to introduce this bipartisan bill that would ensure younger workers have access to their employer-sponsored retirement benefits when they are starting out in their careers.' Under existing federal law, employers who offer 401(k) or other defined contribution plans are only required to make them available to workers 21 and older. While companies can voluntarily lower the participation age, many don't, citing the cost and complexity of compliance under the Employee Retirement Income Security Act of 1974 (ERISA). A 2021 report by the Plan Sponsor Council of America found that 40% of employers restrict retirement access to workers under 21, leaving many younger employees without the chance to begin building savings during their first years in the workforce. 'Americans who don't attend college and immediately enter the workforce should be given every chance to save for retirement,' Cassidy said in a statement. 'This legislation empowers American workers, giving them more opportunities to plan for a secure retirement.' The proposed legislation would require employers to open their retirement plans to eligible employees beginning at age 18. It would also delay ERISA audit requirements that are triggered when younger workers are added and exempt those employees from certain retirement fund testing mandates that increase administrative costs for employers. Advocates for the legislation argue that starting retirement contributions even a few years earlier can significantly improve long-term outcomes, thanks to the power of compound interest. The proposal has drawn endorsements from a wide range of organizations, including the Insured Retirement Institute, Edward Jones, TIAA, LPL, the American Benefits Council and the National Rural Electric Cooperative Association. 'The Helping Young Americans Save for Retirement Act will expand the opportunity for more younger workers to start saving earlier for retirement by allowing them to participate in their employer-sponsored workplace plans,' said Paul Richman, chief government and political affairs officer at the Insured Retirement Institute. 'This measure will not only help younger workers get into the habit of contributing to their retirement savings, but it will also provide additional years for their savings to grow to ensure a more secure financial future.' The bill builds on a similar measure introduced in 2023 and reflects broader Democratic efforts to expand access to financial tools for working-class Americans. It also aligns with Kaine's long-standing emphasis on workforce development and economic opportunity — particularly for those who do not follow a traditional college path. The proposal now awaits consideration by the full Senate. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Reuters
17-04-2025
- Business
- Reuters
US Supreme Court in Cornell case adopts higher bar to dismiss ERISA claims
April 17 (Reuters) - The U.S. Supreme Court on Thursday revived a class action by 28,000 Cornell University employees accusing the Ivy League school's retirement plans of paying excessive fees for recordkeeping and other services. The court in a unanimous decision, opens new tab penned by Justice Sonia Sotomayor said that plaintiffs in such lawsuits have no obligation to allege that exemptions from the federal law governing employee benefit plans do not apply, because the exemptions are affirmative defenses that must be raised by plans themselves when they move to dismiss lawsuits, resolving a circuit split on the issue. The justices reversed a ruling by the New York-based 2nd U.S. Circuit Court of Appeals that had dismissed the class action filed against Cornell in 2016. The 2nd Circuit had agreed with Cornell and three other federal appeals courts that the plaintiffs were required to plead in their lawsuit that the school did not qualify for any statutory exemptions under the Employee Retirement Income Security Act of 1974. At least two other appeals courts have said that plans have the burden of raising exemptions and proving they apply. ERISA prohibits benefit plans from engaging in transactions with third parties that could cause a conflict of interest or financial harm to participants. A separate provision exempts transactions for necessary services, such as office space and legal and accounting services, "if no more than reasonable compensation is paid." Sotomayor wrote that Cornell's "proposed approach would require plaintiffs to plead and dispute myriad exceptions before knowing which of them the defendant will seek to invoke. That would be especially illogical here, where several of the exemptions turn on facts one would expect to be in the fiduciary's possession." Cornell, its lawyers and lawyers for the plaintiffs did not immediately respond to requests for comment. Justice Samuel Alito concurred with the decision but wrote separately to warn that it could result in more meritless ERISA lawsuits surviving motions to dismiss, exposing benefit plans to the costs of discovery and trial. "Defendants facing those costs often calculate that it is efficient to settle a case even though they are convinced that they would win if the litigation continued," he wrote. Alito was joined by Justices Clarence Thomas and Brett Kavanaugh. The plaintiffs who sued Cornell in 2016 claimed the retirement plans engaged in prohibited transactions for recordkeeping and administrative services and paid excessive fees. Cornell claimed that the costs were exempt from ERISA's ban on third-party transactions and the fees paid by the plans were reasonable. The lawsuit was one of roughly two dozen that were filed beginning in 2016 to accuse colleges and universities of violating ERISA by failing to adequately monitor retirement plans, drop underperforming investments or limit fees. In a 2022 decision involving Northwestern University, the justices unanimously ruled that offering workers a broad range of choices for their retirement investments does not shield employers from claims that specific options are imprudent because they come with high fees. Duke, Columbia, the University of Southern California and Washington University in St. Louis have paid as much as $13 million to settle ERISA cases in recent years, while denying wrongdoing. The case is Cunningham v. Cornell University, U.S. Supreme Court, No. 23-1007. For the plaintiffs: Xiao Wang of the University of Virginia School of Law Supreme Court Litigation Clinic For Cornell: Michael Scodro of Mayer Brown
Yahoo
01-04-2025
- Business
- Yahoo
Lawsuit accuses Casey's of exploiting employees with tobacco-use surcharge
A lawsuit accuses Casey's General Store of exploiting workers through the discriminatory practice of imposing a tobacco-use surcharge for health insurance coverage, according to The Capital Dispatch. Casey's workers who fail to certify as non-smokers pay more for insurance, the lawsuit says. The surcharge, which is alleged to be $35 per pay period, amounts to an illegal 'cash grab' by Casey's that is masquerading as a wellness program, the lawsuit claims. The lawsuit, which was filed Friday in U. S. District Court for the Southern District of Iowa, seeks class-action status but is currently filed on behalf of one Casey's employee, Elizabeth Blalock of Carroll County, Missouri. Attorneys for Blalock say that all Casey's workers are automatically assumed to use tobacco unless they submit to a process in which they provide a sworn affidavit stating they do not. Any worker who fails to complete that process by a specified deadline is then required to pay a 'tobacco surcharge' for the entire calendar year, even if they do not use tobacco, the lawsuit says. The lawsuit claims Casey's fails to provide the federally required options that would allow employees to avoid the surcharge. 'The surcharge is structured as a penalty rather than a legitimate wellness incentive,' the lawsuit claims, because the workers 'who miss the enrollment deadline are penalized for the entire year without any opportunity to later demonstrate compliance or avoid the surcharge.' The lawsuit is based on the requirements of the Employee Retirement Income Security Act of 1974. ERISA allows employers to deduct from workers' pay a tobacco-use surcharge, but only in connection with wellness programs that meet specific federal guidelines established in 2014. Those regulations state they are intended to ensure corporate wellness programs actually promote health as opposed to being a 'subterfuge for discriminating based on a health factor.' The lawsuit alleges Casey's is illegally shifting the costs associated with less healthy workers from the company back to those same workers 'who end up subsidizing their healthier colleagues.' ERISA bars any health insurer or medical plan from discriminating against participants by charging premiums based on a 'health-related factor,' including tobacco use. It does, however, allow group health plans to establish premium discounts or rebates' in return for adherence to programs that promote wellness and disease prevention. The lawsuit claims Casey's does not meet that standard. 'There is no smoking-cessation program, waiver, or alternative route for tobacco users' to avoid the surcharge, the lawsuit alleges. 'The only avenue for smokers to avoid the surcharge is to quit smoking and then submit that change in status to the benefits department. Thus, tobacco users are penalized based solely on their status as smokers, which violates ERISA's nondiscrimination provisions.' The lawsuit goes on to allege that 'allowing companies like Casey's to exploit their participants and unlawfully extract millions from them under the guise of a wellness program that is, in reality, a cash grab, directly contradicts ERISA's purpose of protecting workers from health-based discrimination. If unchecked, this practice would permit employers to manipulate wellness programs as revenue generating schemes rather than genuine health initiatives.' According to the lawsuit, Blalock has forfeited to Casey's $35 in earnings per pay period — roughly $910 per year — in order to maintain health coverage through the company. Casey's, which is headquartered in Ankeny, is one of the nation's largest convenience store chains, with more than 2,600 locations in 16 states. There are more than 18,000 employees enrolled in the company's health plan, according to court records. In seeking class-action status for their lawsuit, the plaintiff's attorneys argue the amount of money at issue exceeds $5 million, and the number of Casey's workers who might potentially join the case is more than 1,000. Casey's has yet to file a response to the lawsuit. The company did not immediately respond Monday requests for comment from The Capital Dispatch. The plaintiff is represented by attorney Adam J. Wachal of the Koley Jessen law firm in Omaha. To read The Capital Dispatch article, visit here. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
31-03-2025
- Business
- Yahoo
Lawsuit: Casey's exploits employees with tobacco-use surcharge
This convenience store on West Des Moines' Grand Avenue is part of the Casey's General Store chain, which is being sued over the tobacco-use surcharge imposed on employees. (Main photo by Clark Kauffman/Iowa Capital Dispatch. Inset photo of company policy is from U.S. District Court records) Casey's General Store is being sued for allegedly exploiting its workers through the discriminatory practice of imposing a tobacco-use surcharge for health insurance coverage. The surcharge, which is alleged to be $35 per pay period, amounts to an illegal 'cash grab' by Casey's that is masquerading as a wellness program, the lawsuit claims. Filed in U.S. District Court for the Southern District of Iowa, the lawsuit seeks class-action status but is currently filed on behalf of one Casey's employee, Elizabeth Blalock of Carroll County, Missouri. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Attorneys for Blalock allege that all Casey's workers are automatically assumed to use tobacco unless they submit to a process in which they provide a sworn affidavit stating they do not. Any worker who fails to complete that process by a specified deadline is then required to pay 'tobacco surcharge' for the entire calendar year, even if they do not use tobacco, the lawsuit claims. In addition, Casey's allegedly fails to provide the federally required options that would allow employees to avoid the surcharge. 'The surcharge is structured as a penalty rather than a legitimate wellness incentive,' the lawsuit claims, since the workers 'who miss the enrollment deadline are penalized for the entire year without any opportunity to later demonstrate compliance or avoid the surcharge.' The lawsuit is based on the requirements of the Employee Retirement Income Security Act of 1974. ERISA allows employers to deduct from workers' pay a tobacco-use surcharge, but only in connection with wellness programs that meet specific federal guidelines established in 2014. Those regulations state they are intended to ensure corporate wellness programs actually promote health as opposed to being a 'subterfuge for discriminating based on a health factor.' The lawsuit alleges Casey's is illegally shifting the costs associated with less healthy workers from the company back to those same workers 'who end up subsidizing their healthier colleagues.' ERISA bars any health insurer or medical plan from discriminating against participants by charging premiums based on a 'health-related factor,' including tobacco use. It does, however, allow group health plans to establish premium discounts or rebates' in return for adherence to programs that promote wellness and disease prevention. Casey's, the lawsuit claims, does not meet that standard. 'There is no smoking-cessation program, waiver, or alternative route for tobacco users' to avoid the surcharge, the lawsuit alleges. 'The only avenue for smokers to avoid the surcharge is to quit smoking and then submit that change in status to the benefits department. Thus, tobacco users are penalized based solely on their status as smokers, which violates ERISA's nondiscrimination provisions.' The lawsuit goes on to allege that 'allowing companies like Casey's to exploit their participants and unlawfully extract millions from them under the guise of a wellness program that is, in reality, a cash grab, directly contradicts ERISA's purpose of protecting workers from health-based discrimination. If unchecked, this practice would permit employers to manipulate wellness programs as revenue generating schemes rather than genuine health initiatives.' According to the lawsuit, Blalock has forfeited to Casey's $35 in earnings per pay period — roughly $910 per year — in order to maintain health coverage through the company. Casey's, which is headquartered in Ankeny, is one of the nation's largest convenience store chains, with more than 2,600 locations in 16 states. There are more than 18,000 employees enrolled in the company's health plan, according to court records. In seeking class-action status for their lawsuit, the plaintiff's attorneys argue the amount of money at issue exceeds $5 million, and the number of Casey's workers who might potentially join the case is more than 1,000. The lawsuit seeks unspecified damages for unlawful imposition of a discriminatory tobacco surcharge and breach of fiduciary duty. Casey's has yet to file a response to the lawsuit. The company did not immediately respond Monday to requests for comment. The plaintiff is represented by attorney Adam J. Wachal of the Koley Jessen law firm in Omaha. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
18-02-2025
- Business
- Yahoo
Company says family of Wisconsin man who died after inhaler price jumped have no grounds to sue
A company being sued by a family for the death of their 22-year-old son who couldn't afford his asthma inhaler is asking a judge to dismiss the lawsuit. The parents of Cole Schmidtknecht, an Appleton man who died in January 2024 after suffering a severe asthma attack just days after his family says he stopped using his preventative inhaler due to a severe price hike, filed a lawsuit last month against OptumRx, a subsidiary of UnitedHealth Group, and Walgreens. In the lawsuit complaint, Cole's parents, Bil and Shanon Schmidtknecht, allege both OptumRx and Walgreens were negligent and bear responsibility for their son's death. Five days before Cole's catastrophic asthma attack, he went to his pharmacy, the Walgreens at 729 Northland Ave. in Appleton, to refill his prescription. There, he learned his inhaler — which he had been taking daily as a preventative medication to manage his asthma for around 10 years, his parents said — was no longer covered by his insurance, and now cost him nearly $540. Unable to afford it, Cole left the pharmacy with only a rescue inhaler he was able to get with a $5 copay. Cole's parents allege OptumRx discontinued coverage of Cole's inhaler, Advair Diskus, in a decision that was financially and not medically motivated, then never provided the 30-day notice of the coverage change that is required by state law. The lawsuit complaint further alleges that Walgreens employees did not take any steps to help Cole get his medication — like asking Cole's doctor to request an exception to OptumRx's new formulary or approve an alternative medication that was covered by his insurance. OptumRx responded with a motion to dismiss the federal lawsuit Friday. In a brief supporting the motion, attorneys for OptumRx asserted that while the company "expresses its deepest sympathies to the parents and loved ones of Cole Schmidtknecht, whose untimely death is unquestionably heartbreaking," federal law protects OptumRx from the claims made in the lawsuit. The court filing cites the Employee Retirement Income Security Act of 1974, known as ERISA, which it states was enacted by Congress to ensure regulation of employee benefit plans are handled at the federal, and not the state, level. ERISA's "remedial provisions" are "the sole avenue" for resolving claims that concern employee benefit plans that are governed by ERISA, like the benefit plan Schmidtknecht had through his employer, OptumRx argues. RELATED: A 22-year-old from Appleton died after his inhaler price skyrocketed. His parents are suing. OptumRx's court filing also argues that the facts listed in the lawsuit complaint "present an incomplete picture of the events surrounding Mr. Schmidtknecht's interactions with the pharmacy, and indirectly with Optum Rx." The company claims that despite the lawsuit complaint's statement that Cole had been taking Advair Diskus regularly up until the medication stopped being covered by his insurance, he "had not filled any prescriptions for Advair Diskus using his OptumRx pharmacy benefit since April 5, 2022." The lawsuit remains ongoing. Attorneys for Walgreens filed a motion Friday requesting a time extension to file a response to the lawsuit complaint, according to court records. "OptumRx has asked that the Court dismiss them from the case before the parties engage in any fact discovery," Michael Trunk, one of the Schmidtknecht family's attorneys, said in a statement. "There is no basis in federal or Wisconsin state law for its request, and the Schmidtknechts look forward to litigating the issue before the Court." Bil Schmidtknecht previously told the Post-Crescent he hopes the lawsuit can raise awareness about a need for reform of pharmacy benefit managers like OptumRx. Pharmacy benefit managers, also known as PBMs, are companies that act as intermediaries between drug companies and pharmacies. Most of the largest PBMs are owned by health insurance companies or their parent companies. This means PBMs have significant power over the pharmaceutical supply chain — and can inflate medication prices for Americans, the Federal Trade Commission has warned. In 2023, the three largest PBMs — CVS Caremark, Express Scripts and OptumRx — processed close to 80% of the approximately 6.6 billion prescriptions dispensed by pharmacies around the United States, according to a 2024 FTC report. The six largest PBMs manage close to 95% of prescriptions in the country. Contact Kelli Arseneau at 920-213-3721 or karseneau@ Follow her on X, formerly Twitter, at @ArseneauKelli. This article originally appeared on Appleton Post-Crescent: OptumRx asks judge to dismiss lawsuit over Cole Schmidtknecht's death
