The Legal Perspectives of Employee Benefits
Question One
Louie violated his obligations to Tony since the procedure for the correction of the cleft palate is not for cosmetic purposes but for medical purposes. It is a birth defect that has to be corrected since children with such a condition encounter feeding or eating difficulties (Martin & Fabes 67).
Sunshine Cab Company, as the employer of Tony renege its obligation to provide reasonable claims and appeals procedures for the benefit plans of its employees. The facts of the case will show that it is only Louie De Palma, the Head Dispatcher and the Plan Administrator for the company who made a final decision to deny the request of Anthony. There is a clear showing that the company violated the claims and appeals procedure for employee benefits since Tony was left without recourse.
Tony is required to first file a claim to receive the benefits he is entitled to under an employee welfare benefit plan based on the summary plan description. He must appeal the adverse decision by submitting an appeal to the Employee Benefits Security Administrator, under ERISA requirements before going to court.
What legal standard will be applied to review the denial of Sunshine Company’s denial of Tony’s claim for benefits is de novo standard of review. The judge will decide whether the Tony is entitled to benefits by evaluating the claim strictly based on its merits (Luten 375).
There is a high probability that the court will grant the claim for benefits of Tony.
Question Two
ISSUE: The issue is whether or not Sunshine Cab Company can unilaterally withdraw Tony’s health insurance benefit on the basis of the violence in the work place
RULING: Sunshine Cab Company cannot deny the medical benefit of Tony since employers are required to provide the employees the benefits that they are entitled to based on the Summary Plan Descriptions (SPDs).
APPLICATION: In the case of the owner of the Sunshine Cab Company, there was a premeditated plan to deny Tony of medical benefits for fear that that the company will incur healthcare premiums. There was fraud and malice employed by the company when its right-hand man, Louie De Palma, the Head Dispatcher, devised a plan to terminate Tony and cancel his health insurance. The company took advantage of Tony’s sensitivity and short temper by provoking him to show violence by calling him a “washed up boxer.” Since Tony was a sensitive guy, the company played with his emotions in order to trigger him to punch Louie that led to his termination. Such fraudulent scheme employed by the company is their method to cancel his health insurance and to avoid paying high insurance premiums if Tony’s son will be allowed to undergo the medical procedure to correct his cleft chin.
CONCLUSION: The company cannot escape its obligation to provide Tony a health insurance as part of the employee benefits. In this given problem, Sunshine does not want to pay high medical premiums to save company resources. The law provides that employees have the right to sue their employers for the denial of employee benefits (Walsh 427). Sunshine cannot unilaterally decide to deny the claim on the ground that it is not medically necessary or for cosmetic purpose. The company is not allowed to interpret the terms of the plan in order to promote its own interest. It was clearly shown that the company abused its discretion when it denied the claim of Tony without giving him the right to appeal its decision. Assuming that Sunshine Cab Company has employed more than 20 employees for who have been with the company for several years, the health insurance benefit cannot be withdrawn because it is part of the employee benefit plan currently in place. Denying the employees of health insurance is considered abuse of discretion (Walsh 428) and will result to diminution of benefits of the employees which is prohibited under the law.
Question Three
ISSUE: Whether or not the termination of Tony’s employment by Sunshine Cab Company is legal for failure to issue a COBRA notice to him
RULING: Employers who fail to give their employees the COBRA notice requirements pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA) shall be liable to face civil actions and payment of tax penalties. The penalties that will be applied for non-compliance with the COBRA notices shall cover the initial COBRA rights notices that employers and plan administrators must give out to employees upon their initial coverage under the group health insurance plans. It also covers the notices of qualifying events that employers must provide to the plan administrators. Aside from this, it also covers other notices that employers and plan administrators must send to the qualified beneficiaries. The failure of the employer to give such notice to the employees will entitle the employees and the qualified beneficiaries to sue the employers.
APPLICATION: In this given case, Sunshine Company failed to provide the COBRA notice to Tony. Hence, the company shall be liable to the civil action that may be filed by Tony and it is also required to pay tax penalties for failure to comply with the notice requirement.
CONCLUSION: The termination of Tony is illegal and defective since Sunshine failed to comply with the COBRA notice requirement mandated under law. Therefore, the company shall be held liable for its negligence for failure to send out the COBRA notice to its employee prior to his termination.
Works Cited:
Luten, Susan Burnett. California Civil Litigation. Mason, OH: Cengage, 2008. Print.
Martin, Carol Lynn & Richard Fabes. Discovering Child Development. Mason, OH:
Cengage, 2008. Print.
Walsh, David J. Employment Law for Human Resource Practice. Mason, OH: Cengage.
