BENEFITS DIGEST

This week's roundup, a short-handed edition with no case of the week, flags two decisions as most notable. In Central States v. McClain the Seventh Circuit held that Arkansas's latest pharmacy benefit manager regulation survives ERISA preemption, and in Liu v. Kaiser the Ninth Circuit extended the substantial compliance doctrine to benefit elections. The edition also collects the week's decisions on arbitration, attorneys' fees, fiduciary breach, disability claims, preemption, exhaustion, and pleading.

In Laurel Hill Management Services v. La-Z-Boy, the Sixth Circuit held that ERISA preempts out-of-network providers' negligent-misrepresentation and promissory-estoppel claims premised on oral assurances given during benefits-verification calls, reaffirming its 1991 Cromwell precedent. Mayer Brown flags a developing circuit split and counsels administrators to keep call recordings and rely on the written plan when providers claim they relied on the phone call.

Roberts Disability Law walks through the Seventh Circuit's decision in Central States v. McClain, covered here yesterday from the slip opinion, affirming dismissal of the fund's ERISA preemption challenge to Arkansas Rule 128's pharmacy dispensing-fee and reporting requirements.

Kantor & Kantor's weekly survey leads with Laurel Hill Management Services v. La-Z-Boy, where the Sixth Circuit held a provider's claims preempted, reinforcing the circuit split with the Ninth Circuit's Healthcare Ally decision covered here last week. The same edition rounds up the week's district courts, including Kovacs v. Moradi, holding that restricted stock units are not ERISA plans, and Cregan v. Unum, finding that a voluntary accident plan failed the safe harbor on three of four prongs and is therefore ERISA-governed.

The Seventh Circuit affirmed dismissal of Central States' ERISA preemption challenge to Arkansas Insurance Rule 128, holding that the state's requirement that health plans pay pharmacies “fair and reasonable” dispensing fees is a cost regulation permitted under Rutledge, and that the rule's companion reporting mandate survives because it exists only to enforce that fee requirement, fitting the narrow room the Supreme Court's Gobeille decision leaves for state reporting duties. The panel flagged that ERISA's newly enacted uniform pharmacy-compensation reporting rules, effective for plan years beginning 30 months after February 3, 2026, may change the analysis later. For self-funded plans, the decision extends Rutledge's reach from reimbursement floors to state-mandated fees and data reporting.

The Ninth Circuit held that ERISA preempts a promissory estoppel claim over a misrepresented reimbursement rate on a benefits-verification call, but not a negligent misrepresentation claim on the same facts, because that injury flows from the false statement itself rather than from interpreting or denying plan terms. Mayer Brown's takeaway for administrators: record verification calls and put coverage representations in writing.

In Cregan v. Unum Life Insurance Company of America, No. 24-CV-340-DES, 2026 WL 2427920 (E.D. Okla. Aug. 19, 2026), United States Magistrate Judge D. Edward Snow addressed whether a voluntary accident policy offered through an employer falls under ERISA.

Roberts walks through Laurel Hill v. La-Z-Boy, yesterday's Court Decisions lead: the Sixth Circuit's published holding that ERISA preempts out-of-network providers' negligent misrepresentation and promissory estoppel claims over a plan administrator's oral reimbursement assurances, and what it means for providers who rely on verification calls in the Sixth Circuit.

In a published opinion, the Sixth Circuit held that ERISA preempts out-of-network providers' negligent misrepresentation and promissory estoppel claims based on a plan administrator's oral assurances about reimbursement, affirming dismissal of a suit that sought UCR-rate payment from La-Z-Boy's health plan after Blue Cross allegedly promised it by phone. The panel applied its Cromwell precedent, and Judge Murphy concurred separately to note most circuits allow some misrepresentation claims against administrators. The same week, the Ninth Circuit went the other way on a nearly identical negligent misrepresentation claim in Healthcare Ally v. WSP USA.

In a published opinion by Judge Berzon, the Ninth Circuit held that ERISA does not preempt an out-of-network surgery center's negligent misrepresentation claim over a benefit-verification call in which Aetna said reimbursement would run at the UCR rate, then paid roughly five percent of the bill at the Medicare rate. The provider's injury is its own, not a derivative claim for plan benefits, and letting administrators misstate coverage to providers with impunity would undercut ERISA's purposes. The court still affirmed dismissal of the companion promissory estoppel claim as preempted, and the panel's line falls almost exactly where the Sixth Circuit refused to draw one eight days later in La-Z-Boy.

another data point on where provider state-law claims survive plan-administration preemption.

In Healthcare Ally Management v. WSP USA, the Ninth Circuit held ERISA does not preempt an out-of-network surgery center's negligent misrepresentation claim based on an Aetna verification call, while affirming preemption of the promissory estoppel claim.

A Third Circuit panel held that ERISA preemption reaches a provider's state-law defamation claims against a Cigna subsidiary, another data point on how far plan-administration preemption extends beyond benefit denials.

Ajeti v. Life Insurance Company of North America, No. 26-3249, 2026 WL 2150163 (E.D. Pa. July 27, 2026), addresses whether ERISA governs, and preempts, state-law claims brought by foreign nationals seeking disability benefits under a plan established by their American employer.

Trade associations and unions challenged New York's fossil-fuel appliance bans as preempted by federal energy conservation law; the Second Circuit affirmed, finding EPCA's preemption clause does not extend to the state laws.