Opinion ID: 765804
Heading Depth: 2
Heading Rank: 2

Heading: ERISA Claim for Deduction of Health Insurance Premiums

Text: 21 We turn now to Mr. Shields' claim that the deduction of Health Plan premiums from his monthly pension payment violates Section 206(d) of ERISA (29 U.S.C. sec. 1056(d)). Section 206(d)(1) provides that [e]ach pension plan shall provide that benefits provided under the plan may not be assigned or alienated. 29 U.S.C. sec. 1056(d)(1). Section 206(d)(2) provides an exception to this prohibition against assignment and alienation: For the purposes of paragraph (1) of this subsection, there shall not be taken into account any voluntary and revocable assignment of not to exceed 10 percent of any benefit payment . . . . 29 U.S.C. sec. 1056(d)(2). The parties do not dispute that the deduction of Health Plan premiums does not fall into the exception provided for in Section 206(d)(2) because the premiums exceed 10 percent of Mr. Shields' monthly pension benefit. 22 In granting summary judgment for the defendants on this claim, the district court relied instead on certain Treasury regulations promulgated pursuant to ERISA. The regulations provide that a plan participant may direct the plan to pay his benefits directly to a third party, provided that certain procedures are followed: 23 (e) Special rule for certain arrangements--(1) In general. For purposes of this section and notwithstanding paragraph (c)(1) of this section [defining assignment and alienation], an arrangement whereby a participant or beneficiary directs the plan to pay all, or any portion, of a plan benefit payment to a third party (which includes the participant's employer) will not constitute an assignment or alienation if-- 24 (i) It is revocable at any time by the participant or beneficiary; and 25 (ii) The third party files a written acknowledgment with the plan administrator pursuant to subparagraph (2) of this paragraph. 26 (2) Acknowledgment requirement for third party arrangements. In accordance with paragraph (e)(1)(ii) of this section, the third party is required to file a written acknowledgment with the plan administrator. This acknowledgment must state that the third party has no enforceable right in, or to, any plan benefit payment or portion thereof (except to the extent of payments actually received pursuant to the terms of the arrangement). A blanket written acknowledgment for all participants and beneficiaries who are covered under the arrangement with the third party is sufficient. The written acknowledgment must be filed with the plan administrator no later than the later of-- 27 (i) August 18, 1978; or 28 (ii) 90 days after the arrangement is entered into. 29 26 C.F.R. sec. 1.401(a)-13(e). The district court held that, although the written acknowledgment that the Health Plan has no enforceable right to the pension payments was not filed until after the 90-day deadline, the defendants are now substantially in compliance with the regulations and the plaintiff's grievance has therefore been remedied. 30 On appeal, Mr. Shields does not dispute that the defendants are now in compliance with the requirements that the automatic deduction arrangement be voluntary and revocable by the beneficiary and that the Health Plan acknowledge in writing that it has no enforceable right to the pension payments. Rather, Mr. Shields contends that the defendants achieved compliance only in response to the initiation of this lawsuit. Mr. Shields has not demonstrated any injury from the automatic deduction arrangement and in fact has expressed his intention to continue with the automatic deduction arrangement rather than elect to pay his Health Plan premiums by check. Under these circumstances, we see no reason for this claim to proceed any further. 31 In sum, we agree with the district court's conclusion that the essence of the relief which plaintiff seeks is to bring defendants into line with the statutory and regulatory requirements and that, now that the defendants have come into compliance, albeit only after being prodded by the filing of this lawsuit, the plaintiff's grievance with respect to the automatic deduction program has been remedied. Shields, 1998 WL 341800, at . We therefore affirm the district court's grant of summary judgment for the defendants on this claim. 32