Employee Benefits
U.S. Supreme Court: Federal Insurance Law Preempts Virginia Law Providing that Divorce Decree Automatically Revokes Insured’s Prior Designation of Spouse as Beneficiary
The U.S. Supreme Court has ruled that the Federal Employees’ Group Life Insurance Act of 1954 preempted a Virginia law that addressed the situation in which an employee’s marital status has changed, but the employee did not update his or her beneficiary designation before dying, by rendering a former spouse liable for insurance proceeds to whoever would have received them under applicable law but for the beneficiary designation. The decision is likely to have significant practical implications: the total amount of FEGLI insurance coverage in force, in 2010, was $824 billion. Read More

Worker’s Compensation
New Mexico Supreme Court Rules Undocumented Workers Entitled to Benefits Where Employer Failed to Follow Federal Hiring Rules
The New Mexico Supreme Court has held that employers that cannot demonstrate good faith compliance with federal law in the hiring process cannot use the undocumented status of their workers as a defense to payment of modifier benefits under the New Mexico Workers’ Compensation Act. In particular, it ruled that an employer that did not properly fill out an I–9 Form and demand necessary documentation, as required, either should have known or was deemed to have known that the worker would likely be undocumented and ineligible for rehire in the event of injury. Read More

Health Insurance
Newborn’s Hospital Costs Not Covered Where Mom Failed to Ask Insurer to Add Him to Policy, California Appeals Court Holds
Reversing a trial court’s decision, a California appellate court has ruled that an insured’s failure to notify her health insurance carrier that she wanted to add her newborn baby to the policy doomed her efforts to obtain coverage for hospital and other costs incurred by the baby six weeks after his birth. Read More

Commercial General Liability
Appeals Court Applies Provision Limiting Coverage of Policy Despite Its Location in Specific Endorsement
A Massachusetts appellate court has ruled that a provision in an endorsement that stated that it limited coverage under the “policy” limited coverage under the policy, and not just under the endorsement. Concluding that the policy was unambiguous, the appellate court found that the language that limited the coverage provided under “the policy” served as a limitation on all the policy’s coverages, not only on “Coverage D.”  Read More