ERISA-Sixth Circuit Holds That Plaintiffs Have A Vested Right To Lifetime Healthcare Benefits

 

In Reese v. CNH Industrial, N.V., No. 15-2382 (6th Cir. 2017), the trial court had granted summary judgment for plaintiffs, finding they had a vested right to lifetime healthcare benefits.

In this appeal, defendant CNH was asking the Sixth Circuit Court of Appeals (the “Court”) to find that plaintiffs’ right to lifetime healthcare benefits failed to vest. Further, claimed CNH, even if the Court were to find that plaintiffs’ right had vested, CNH believes the district court erred in finding that CNH’s proposed changes were not “reasonably commensurate” with plaintiffs’ current plan.

In analyzing the case, the Court said that this matter is complicated by a change in the law since this long-running litigation began.  In light of M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015), which abrogated this circuit’s Yard-Man line of cases, the district court had to revisit the question of whether plaintiffs had a vested right to lifetime healthcare benefits. The court ultimately found that they did. The Court then said that, because we find that the applicable collective bargaining agreement is ambiguous, and because the extrinsic evidence indicates that parties intended for the healthcare benefits to vest for life, the Court affirms the district court’s vesting determination. The Court noted that reasonable changes to the healthcare benefits is permitted even with the vesting, so that remand to the district court is proper, however, because the district court had failed to properly weigh the costs and the benefits of CNH’s proposed plan.

International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Kelsey-Hayes Co.No. 15-2285 (6th Cir. 2017) is another recent Sixth Circuit case dealing with vested rights to health benefits.

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