As our readers know, we tend to do things differently in the Lone Star State. And, this may lead one to wonder whether ERISA claims are treated differently in Texas too.
What is ERISA?
ERISA is the federal law regulates employee benefit plans. Benefit plans include health, disability and life insurance, along with pension plans, among many other types of employee benefit plans. ERISA sets the floor, or the minimum standards for such plans, like the disclosure and reporting requirements, along with the fiduciary responsibilities and enforcement mechanisms.
Are ERISA claims treated differently in Texas?
To be clear, ERISA overrides most Texas laws that relate to employee benefit plans. However, it does not cover all employee benefit plans because some plans are exempt from ERISA. These exempt plans include governmental plans, church plans and those employee benefit plans that exist solely for legal compliance with workers’ compensation, unemployment or disability laws. ERISA also does not apply to any employee benefit plan that is not established or maintained by an employer or employee organization.
What does that mean?
It means that if your employee benefit plan is covered by ERISA, and you are denied benefits, you will need to file an ERISA claim. However, if not, you may be able to sue under Texas law for wrongful denial of benefits, bad faith, negligence or breach of contract. This is an important distinction because none of those claims are available under ERISA.
ERISA also does not allow for punitive damages, emotional distress damages or provide a jury trial right for most claims. This means that your case will be decided by a judge, not by a jury of your peers, in most cases.
ERISA does not allow you to introduce new evidence in court that was not presented during the administrative process. And, ERISA gives deference to the plan administrator’s decision, if the plan grants discretionary authority to the plan administrator. This means that the court will uphold the plan administrator’s decision unless it is arbitrary and capricious, an abuse of discretion or contrary to law.