ERISA

Disability Insurance Claim

December 14, 2010 | Mark S. Humphreys

Anyone in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, De Soto, Richardson, Garland, Mesquite, Burleson, or anywhere else in Texas, who purchases a disability insurance policy may be interested in the reasoning and interpretation of the following case.

On November 29, 2010, the United States Court of Appeals for the Fifth Circuit issued an opinion in the case styled, Bruce Leipzig, M.D. v Principle Life Insurance Company.

From a legal standpoint this case was won by Principle Life Insurance Company (Principle) at the trial court and then was appealed by Dr. Leipzig. He lost on appeal.

Life Insurance Policies, Interpretation, and ERISA

September 11, 2009 | Mark S. Humphreys

A United States Federal District Court in Texas recently discussed the above in a case. The life insurance policy was for $200,000. The policy was provided through a voluntary plan the beneficiary of the policy had with his employer and was an ERISA plan. ERISA stands for Employee Retirement Income Security Act. The case was Carmichael Khan v American International Group, Inc.

Like many people in Dallas, Fort Worth, and surrounding cities and counties Khan was a voluntary participant in a plan provided by his employer. The facts and issues in the case centered around Khans’ employment terminating around April 7, 2006 and his wife having died in a car wreck on April 20, 2006. There were issues about termination paperwork Khan had filled out prior to his termination and his intent to covert coverage he had through his employer to continuing coverage once he left American. Also, there were issues about deductions from Khans last pay check for coverage. The fact pattern is long and the legal battle is also long and complicated. In the end the Federal Court ordered the case back to the Plan Administrator for further determinations to be made by the Plan Administrator. This case will likely continue over the next several months and possibly years unless a settlement is reached among the parties involved.

One of many things to be drawn from this case is that when a life insurance policy is in an ERISA plan, there is an administrative process that has to be exhausted before an appeal to a Federal Court can be fully litigated. All ERISA disputes are fought out in Federal Courts rather than State Court because ERISA issues are a matter of Federal Jurisdiction. Insurance companies prefer Federal Court for fighting their battles whereas attorneys who represent claimants prefer State Courts.
Continue reading ›

Texas Insurance Law vs. ERISA (The Elephant)

September 3, 2009 | Mark S. Humphreys

The State of Texas regulates insurance companies by way of the Texas Department of Insurance. Texas has laws telling the insurance companies and the Texas Department of Insurance how they should be conducting their business and these laws are found in the Texas Insurance Code.

These Texas insurance laws are applicable to all citizens and businesses through-out Texas. So whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, South Texas, East Texas, west to Weatherford and Parker County or all the way to El Paso, the law is the same. This is a good thing in that a person or company knows what to expect when it comes to insurance policies and the guiding principles for their interpretation.

The problem with Texas Insurance Laws is the elephant in the room most people do not know about and lawyers usually wished did not exist. This elephant is the Federal Laws that pre-empt, or trump, State Law. The relevant Federal law in the insurance arena is known as the “Employee Retirement Income Security Act“, also known as ERISA.

This law passed by the Federal Congress is a thorn in the side of Texas Insurance Attorneys. Even though an Insurance Attorney may know about this law and how it works, it has powers that severely limits rights claimants have under Texas Law. The tricky part in this area of Insurance Law is knowing the distinctions between when ERISA controls and when Texas Insurance Law is controlling. The recent case, Lone Star OB/GYN Associates vs. Aetna Health Inc., is a case where the courts allowed Texas Law to be controlling in the dispute and thus allowed for a recovery against the insurance company that otherwise would not have been allowed.
Continue reading ›