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Monday, January 26, 2015

US Supreme Court Rules Health Care Benefits Are Subject to Strict Contractual Interpretation

The Supreme Court reviewed the contractual limitations of health care benefits for retired workers and ruled that benefits may not continue until the death of the employee. It did not accept that a presumption of coverage exists. 
Health care coverage has become a more costly benefit because of expensive treatment and pharmaceutical protocols, as well as increased longevity. This decision will influence lifetime medical coverage and will ancillary impact settlement negotiations involving workers' compensation insurance medical benefits.

Today's post is shared from

"Monday’s decision in M&G Polymers USA, LLC v. Tackett resolves a dispute about the vesting of health-care benefits under a collective bargaining agreement. Neither the Employee Retirement Income Security Act nor the National Labor Relations Act obligates employers to provide health-care benefits, but of course employers often do, and their commitments to provide those benefits often appear in collective-bargaining agreements. As so many companies struggle to deal with the overhang of providing employee benefits to long-retired employees, it should be no surprise that employers are pressing harder and harder to limit those obligations. Hence the litigation at hand.

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