Many working Americans never hear of the Employment Retirement Income Security Act (“ERISA”) and how it limits compensation actions, until they are denied policy benefits. It’s during these disheartening moments that people realize how economically insecure their futures may actually be. Not only are workers confused by ERISA and its correct applicability, lawyers and judges aren’t always clear on when ERISA preempts common law actions, and when it does not.
ERISA was enacted to ensure that employees receive pension and all other benefits by requiring employers meet a minimum standard of protection. This federal law covers retirement, health, and other welfare benefit plans including life insurance, disability insurance, and health plans.
Though ERISA is beneficial to ensuring broad scopes of protection, when insurance providers wrongfully, improperly, or even intentionally delay and deny benefits, an employee’s ability to sue for damages is restricted. ERISA preemption provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” This preemption clause is what limits employees legal rights against recalcitrant insurers that deny health, life and disability claims.
If a worker is subjected to ERISA, they can no longer sue in actions alleging:
- Contract Breach
- The Texas Deceptive Trade Act
- The Texas Insurance Code
- Breach of Good Faith and Faith Dealing
Being able to bring a legal claim under laws that prevent unfair business practices – and do so before a jury – can be vital to achieving the legal maximum in compensation. This legal maximum includes; punitive damages, non-economic damages (mental and emotional turmoil), and reasonable attorneys fees.
So, which employment insurance plans fall outside of ERISA? Although ERISA applies to most private employers, regardless of size, the plans exempted include:
- Group health plans established or maintained by governmental entities ( all federal, state, city, county and public school and school district employers) Police, Fireman, Teachers, and many more.
- Policies covering church employees
- Plans purchased solely to comply with applicable workers compensation, unemployment, or disability laws.
- Plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.
- Disability insurance purchased due to self-employment or because you wanted additional protections
Though there are many nuances to ERISA, if you believe your employment category is exempt and you’re having trouble recouping payment from your worker’s compensation insurer, contact the attorneys of Doyle LLP today for a free, no-risk obligation consultation. Our Insurance Practice has a proficient understanding of ERISA’s many guidelines and will investigate your situation to let you know of exactly what level of compensation you may be entitled to.