The Employee Retirement Income Security Act (ERISA) was established in the 1970s with the intention for providing additional protections to benefits plan participants from the misconduct of Plan Administrators, among others.  In the context of today’s insurance disputes, however, ERISA coverage may ultimately give policyholders fewer protections than non-ERISA plans.

• ERISA regulation covers employer-sponsored insurance plans that are specifically related to employee benefits, such as employer-sponsored disability and health insurance coverage.
• If you have an insurance dispute that arises out of an ERISA-covered plan, your claims will be subject to federal law — not Illinois state law.
• Federal ERISA rules limit your ability to secure damages for bad faith, special damages, emotional distress, and more.

ERISA application may not always be a negative, however.  ERISA plan participants in some circuit courts can have the denial of their benefits claims evaluated under the de novo standard, which means that the court will not defer to the factual determinations of the Plan Administrator.  Instead, the denial of benefits will be considered with a “blank slate,” given the evidence.