Court Denies Motion to Dismiss in Senior Lifestyle ERISA Class Action

On September 7, 2017, the Honorable Michael R. Barrett, of the U.S. District Court for the Southern District of Ohio, denied the motion to dismiss of Defendant, Senior Lifestyle Corporation (“Defendant”) in a lawsuit brought under the Employee Retirement Income Security Act (“ERISA”). Kari Egbers and Stephanie Williams, on behalf of themselves and all others similarly situated (collectively, the “Plaintiffs”), allege that Defendant breached its fiduciary duties under ERISA in connection with its management of the Senior Lifestyle Corporation Employees Benefit Plan (the “Plan”).

The Plan’s purpose is to provide health insurance coverage for the employees of Defendant. The Plan is funded by both employee payroll deductions and employer contributions, and is administered by Key Benefits Administrators, Inc. (“KBA”). The Plaintiffs allege that in 2015, Defendant failed to remit both employee and employer contributions to KBA to fund the Plan, breaching its fiduciary duty under ERISA. As a result of Defendant’s alleged failure to fund the Plan, Plaintiffs incurred medical expenses that allegedly would have been covered by the Plan. The Plaintiffs, therefore, are seeking reimbursement for their alleged timely and valid medical claims and class-wide injunctive relief to enjoin Defendant from continuing to violate the Plan terms.

Defendant moved to dismiss the Complaint pursuant to Federal Rule 12(b)(6) for failure to state a claim, calling Plaintiffs’ claims “nothing more than a repackaged claim for benefits”. The Court, however, found that Plaintiffs’ claims were more than simply a one-time claim for denial of individual benefits, due to the fact that if Defendant’s alleged failure to remit payment to KBA for the Plan continues, Plaintiffs will effectively be without health insurance, as the Plan will not have sufficient funds to pay for future claims. Therefore, the Court denied Defendant’s Motion to Dismiss in all respects.

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