picture, the value of a case for wrongful denial of disability benefits is essentially gutted. But it is about more than just damages; a claimant does not have the right to a jury trial in ERISA-preempted actions because the remedies available to a participant or beneficiary under ERISA are equitable in nature. (Thomas v. Oregon Fruit Products Co. (9th Cir. 2000) 228 F.3d 991, 997.) ERISA “supercede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” (29 U.S.C. § 1144(a).) As a result, many insurance compa-
nies routinely evaluate every new claim with an eye toward possible ERISA pre- emption – even claims filed by individual policyholders. A careful review of the claim file often reveals a memo or check- list of alleged indicia of ERISA, such as
preferential underwriting and premium discounts for “list-billing.” The list-bill sit- uation arises when an employer allows an insurance company to market its disability income-replacement policies directly to its employees, who then receive a discount if the employer allows premiums to be paid via payroll deductions. The employer sends a single check to the insurance company for all premiums listed on a sin- gle bill for the employees in question. Even though the employer never “estab- lished or maintained” a group benefit plan, the employer or group was merely a conduit for payment of premiums, and separate policies were issued in each indi- vidual’s name, insurers often argue that the discount they offered the employees for signing up together renders their dis- ability policies ERISA preempted. (See,
e.g., Schwartz v. Provident Life and Acc. Ins. Co. (D. Ariz. 2003) 280
F.Supp.2d 937.) To assess whether a policy is legiti-
mately subject to ERISA preemption, one must first determine whether there is “any plan, fund, or program which was hereto- fore or is hereafter established or main- tained by an employer or by an employee organization, or by both, to the extent that such plan, fund or program was established or is maintained for the pur- pose of providing . . . benefits in the event of sickness, accident, disability, death or unemployment . . . .” (29 U.S.C. § 1002(1).) The insurer has the burden of proving the facts necessary to establish the existence of an ERISA “plan.” (Kanne v. Connecticut Gen. Life Ins. Co. (9th Cir. 1988) 867 F.2d 489, 492, n.2, cert. denied, 492 U.S. 906 (1989). See also Zavora v.
JUNE 2011 The Advocate Magazine — 67
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