Ninth Circuit Clarifies State Laws Regulating Insurance Do Not Void Discretionary Clauses In Self-Funded ERISA Plans
By: Joseph P. Yonadi, Jr. and Nancy R. Chawla
The Ninth Circuit recently held discretionary clauses in a self-funded plan were valid and that California Insurance Code § 10110.6, banning discretionary clause relating to insurance, was preempted by ERISA when applied to a self-funded plan. Williby v. Aetna Life Ins. Co., 867 F.3d 1129 (9th Cir. 2017).
The employee benefit at issues was Boeing’s self-funded short-term disability plan (STD Plan), because it contained a discretionary clause. The […]