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This is like no other type of law you have heard of or dealt with. ERISA is an acronym for the Employee Retirement Income Security Act of 1974.

What is ERISA?

A federal law, ERISA covers essentially all benefits that an employer provides to its employees. This typically includes insurance and retirement benefits, but the most important first ERISA question is: was the benefit offered by you or your spouse’s employer? By design, it was meant to protect the employees, but it has become a law that protects the employer and insurance company. It is complex in nature and requires an attorney who regularly handles this type of law.

Most people are familiar with the phrases “bad faith insurance denial” or “breach of contract” in terms of talking about the claims that an individual would assert against an insurance company for not providing insurance benefits. Those terms are referring to state law claims. For example, in Alabama, the claims would normally be governed by Alabama law.

Back in 1974, Congress enacted a law that was originally intended to protect employee benefits from unscrupulous employers who may want to take away pensions or other promised benefits. That law is the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA.

ERISA is a federal statute enacted by Congress that “preempts” your state law claims in cases where your benefits are provided by your employer.

As an example, if you had a group disability policy provided as part of your employment benefits package, your insurance rights would be governed by ERISA and ERISA would preempt all your state law claims that would typically apply otherwise. This preemption means you would have to sue under the federal statute and assert an ERISA claim against that insurance carrier and you normally cannot sue under any of the numerous state laws that would apply to the same conduct.

Due to its complexity, few plaintiff lawyers are well-versed in ERISA. In these cases, there is an escalated urgency during the time before a claims adjuster formulates a decision. For this reason alone, you should seek legal counsel at first indication your benefits will be terminated, or a claim denied.

Just the Facts

Under ERISA, you can only seek what the insurance company should have been paid to begin with through the date of the court’s verdict. You cannot seek future benefits, emotional damages, bad faith damages, or punitive damages. It is entirely possible and often the case in ERISA that the disability insurance carrier may try to deny your claim again, even after you litigate and win your case.

Under ERISA, courts have interpreted the statute to mean that you have lost your right to a jury trial. This means a federal judge, not a jury, will be the one deciding your claim.

We practice in all the federal courthouses in Alabama. From Huntsville and Muscle Shoals to Tuscaloosa, Birmingham and Anniston, down to Mobile and Dothan.

In 2017, we analyzed all of the ERISA claims filed during a five-year period in federal court in Alabama. There were 360 ERISA claims filed in federal court during that five-year period. The plaintiff insured/employee only won a dispositive ruling four times. The fact that only roughly one percent of these claims got this result in a five-year period illustrates the importance of getting a lawyer who is experienced in ERISA onboard immediately.

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