{"id":357836,"date":"2016-04-04T10:45:32","date_gmt":"2016-04-04T15:45:32","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/employment\/wages-and-benefits\/erisa-preemption-what-you-need-to-know.html"},"modified":"2021-12-31T14:07:33","modified_gmt":"2021-12-31T19:07:33","slug":"erisa-preemption-what-you-need-to-know","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/employment\/wages-and-benefits\/erisa-preemption-what-you-need-to-know.html","title":{"rendered":"ERISA Preemption: What You Need to Know"},"content":{"rendered":"\n
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ERISA Preemption: What You Need to Know<\/h1>\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Chris Meyers, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

The Employee Retirement Security Act<\/a> of 1974 (ERISA), is a complex federal law that regulates employee health care benefit and pension plans. ERISA is meant to protect private pension and health plans from fraud and mismanagement<\/a>. Because the Act’s regulations "preempt" similar or conflicting state or local laws, they sometimes deprive individuals of the much-needed protections provided by their state laws, including insurance "bad faith" laws that protect the consumer from unfair claim denials.<\/p>\r\n

Read on to learn more about ERISA<\/a> preemption and how it affects you.<\/p>\r\n

What Is ERISA Preemption?<\/h2>\r\n

In the context of ERISA law<\/a>, to preempt something is to take its place because of priority. ERISA has a higher priority than similar, or directly conflicting, state laws. This means it takes the place of those laws, even if they were written after ERISA.<\/p>\r\n

ERISA preempts all related state laws because:<\/p>\r\n

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  1. When Congress drafted ERISA they inserted a clause that says it will preempt state laws; and<\/li>\r\n
  2. Since ERISA came into effect, courts have agreed that it preempts state laws.<\/li>\r\n<\/ol>\r\n

    This can be problematic because traditionally, the insurance industry has been regulated by the states, so the strongest protections against the unfair behavior of insurance companies are found in state laws.<\/p>\r\n

    Are There Situations When ERISA Doesn’t Preempt State Protections?<\/h2>\r\n

    Yes. ERISA doesn’t apply to the following:<\/p>\r\n

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    1. Worker’s compensation benefits<\/a>.<\/li>\r\n
    2. Pension, health, disability, and unemployment benefits<\/a> that weren’t purchased as part of a plan.<\/li>\r\n
    3. Health and pension plans<\/a> run by a church or religious organization.<\/li>\r\n
    4. Health and pension plans run by a government, government agency, or government contractor.<\/li>\r\n<\/ol>\r\n

      According to National Center Health Statistics Reports<\/a>, in 2007, 62% of Americans with private health coverage are subject to ERISA.<\/p>\r\n

      If you’re unsure if your benefits will receive the protection of your state’s bad faith laws, you need to investigate whether ERISA applies to you or not or contact an attorney specializing in plaintiff’s insurance or ERISA. Insurance<\/a> companies and plan administrators sometimes tell beneficiaries that their benefits are ERISA preempted and will be handled only in federal court, even when this turns out not to be true.<\/p>\r\n

      What Are Your Legal Remedies Under ERISA?<\/h2>\r\n

      Your remedies under ERISA are more restricted than they would be if you are able to file a complaint in the courts of your state. ERISA allows you to:<\/p>\r\n