1. What is ERISA?

“The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.”

[U.S. Department of Labor website]

2. What is an ERISA plan?

An ERISA plan may be an employee welfare benefit plan or an employee pension benefit plan, as defined.

An “employee welfare benefit plan” is any arrangement providing medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services.

An “employee pension benefit plan” is any arrangement providing retirement income to employees, or resulting in a deferral of income by employees for periods extending to the termination of covered employment or beyond.

Exemptions are provided for certain severance pay plans. Also, church plans and governmental plans are not covered by ERISA.

3. What duties are imposed by ERISA?

“The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan’s investments in order to minimize the risk of large losses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. They also must avoid conflicts of interest.”

[Department of Labor website]

Yet, ERISA is not necessarily the best avenue for plaintiffs. See #6 below. Therefore, the subject in the following #4 is very important.

4. What is ERISA preemption?

The concept is simply stated. An important purpose behind the statute’s enactment was the preemption of State law in favor of a national program of employee benefits administration. Yet, the application of the statute is complex. Refer to the “Preemption” category on this site for examples of how ERISA preemption is applied in the courts.

As a general rule, self-funded welfare plans (such as group health plans) will be regulated under ERISA exclusively.

ERISA preemption in a nutshell is a topic in the tutorial section of this website.

5. How do I identify an ERISA plan?

A series on how to identify a self-funded ERISA plan has been published on this site.

ERISA plans are required to file Form 5500. You can find information on Form 5500 filings here.

6. What is the effect of ERISA preemption?

No jury trials. No extra-contractual damages. No State statutory, common law or equitable remedies.


Perhaps a starting place is, do you have an ERISA plan? For that issue, see the MEWA discussion on this site for general information as to what constitutes an “employee welfare benefits plan”. For deferred compensation plans, you won’t find much on this site, but I will add some links later. Be aware, however, that not all deferred compensation plans are ERISA plans.

See also, How To Identify A Self-Funded ERISA Plan

Practice Tip #1: Don’t Overplead The Case

Ron Dean, a prominent ERISA attorney suggests that an attorney representing a participant or beneficiary should first evaluate what kind of case the facts present – and don’t overplead the case.

For example, Ron suggests that a practical taxonomy of ERISA cases could be divided thusly:

1. benefit claims

  • pension
  • disability
  • medical
  • severance

2. breach of fiduciary duty

  • claims on behalf of the plan
  • claims on behalf of the individual

3. Section 510 Claims

I will elaborate on the foregoing in a future update. For now, bear in mind that the importance of understanding the case in these terms lies in the fact that the elements of proof and available remedies will vary based on the type of claim. Also, the statute of limitations will be determined by the type of claim.

Practice Tip #2: Some Claims Will Preclude Others

Very simply, if you have state law claims, they will not co-exist well with any ERISA claims. See, the tutorial “ERISA preemption in a nutshell.”

Also, some ERISA claims may preclude others. See, :: Availability of Claim For Benefits Forecloses Suit Under ERISA Section 502(a)(3) For Equitable Relief. The Gore v. El Paso case stands as an important exception to the foregoing rule and thus is a very significant decision.

Practice Tip #3: Determine the Applicable Statute of Limitations

ERISA contains different limitations periods depending on the type of claim. For a basic overview, see :: How Long Before It Is Too Late? – ERISA Claims & Limitation of Actions By Contract

Some pitfalls to avoid:

  1. Outside of fiduciary breach claims, which actually can have one of two limitation periods under ERISA § 413, 29 U.S.C. § 1113, the plaintiff may find it necessary to look beyond ERISA to the statute of limitations for the state claim most analogous to the ERISA claim pursued.
  2. The plan or policy may contain a shorter limitations period – all plan and policy documents must be reviewed for this language.
  3. An incorrect benefit determination may be treated as a denial of benefits starting the running of the statute. :: Third Circuit Extends “Clear Repudiation” Rule To Erroneous Benefit Award Claims
  4. If a state law claim is preempted, the claim will be at best restated as an ERISA claim under the doctrine of complete preemption – the ERISA rules on limitations of actions will then apply.
  5. Observe the nuances of the federal discovery rule. The accrual date for federal claims is governed by federal law, irrespective of the source of the limitations period. See Romero v. Allstate Corp., 404 F.3d 212, 220 (3d Cir.2005).
  6. For possible accrual dates, include consideration of 29 C.F.R. § 2560.503-1(m)(4) regarding “adverse benefit determinations”

Practice Tip #4A Determine the Appropriate Standard of Review

Q1: What Discretion Does The Plan Confer on the Plan Administrator?

A1: A district court should review a denial of ERISA plan benefits under a de novo standard of review unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.  Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Thus, the default standard of review is a de novo standard of review.

Q2: If the Plan Provisions Give the Administrator or Fiduciary Discretionary Authority, What is the Consequence?

A2: If the plan confers such discretion, a district court should apply a deferential “arbitrary and capricious” standard. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 112 (1989). Under the arbitrary and capricious standard, a district court will uphold a plan administrator’s interpretation of a plan if it is reasonable, i.e., unless the plan administrator’s decision was without reason, unsupported by substantial evidence, or erroneous as a matter of law.  Pinto v. Reliance Stand. Life Ins. Co., 214 F.3d 377, 393 (3d Cir.2000).

This scope of review is narrow, and the court is not free to substitute its own judgment for that of the [plan administrator] in determining eligibility for plan benefits.  Mitchell v. Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir.1997).

The foregoing derives from four principles set forth in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989)  as to the appropriate standard of judicial review under §1132(a)(1)(B):

(1) A court should be “guided by principles of trust law,” analogizing a plan administrator to a trustee and considering a benefit determination a fiduciary act, id., at 111–113;

(2) trust law principles require de novo review unless a benefits plan provides otherwise, id., at 115;

(3) where the plan so provides, by granting “the administrator or fiduciary discretionary authority to determine eligibility,” “a deferential standard of review [is] appropriate,” id., at 111, 115; and

(4) if the administrator or fiduciary having discretion “is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion,’ ” id., at 115. Pp. 3–5.

Q3: When Does A Conflict Of Interest Exist?

A3: In Metro. Life Ins. Co. v. Glenn, 128 S. Ct. 2343 (2008), the Supreme Court determined that a “conflict of interest” exists when a single entity both funds the plan and evaluates the claims.

Q4:  What Is the Effect of An Conflict Of Interest?

A4:   A conflict should be weighed as a factor in determining whether there is an abuse of discretion.  From Glenn:

We believe that Firestone means what the word “factor” implies, namely, that when judges review the lawfulness of benefit denials, they will often take account of several different considerations of which a conflict of interest is one. This kind of review is no stranger to the judicial system. Not only trust law, but also administrative law, can ask judges to determine lawfulness by taking account of several different, often case-specific, factors, reaching a result by weighing all together. See Restatement §187, Comment d; cf., e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 415–417 (1971) (review of governmental decision for abuse of discretion); Universal Camera Corp. v. NLRB, 340 U. S. 474 (1951) (review of agency factfinding). In such instances, any one factor will act as a tiebreaker when the other factors are closely balanced, the degree of closeness necessary depending upon the tiebreaking factor’s inherent or case-specific importance.

And yet, the approach of the circuit courts of appeal do differ on how to apply the Glenn opinion in judicial review.   Let’s take a look at each circuit and the seminal post-Glenn opinions.

First, here is a list of the Circuit Courts of Appeal.

United States Courts of Appeals and United States District Courts by Geographic Boundaries

  • 1st – Denmark v. Liberty Life Assur. Co., 2009 U.S. App. LEXIS 9825 (1st Cir. Mass. May 6, 2009).
  • 2d – McCauley v. First Unum Life Ins. Co., 551 F.3d 126 (2d Cir. N.Y. 2008),
  • 3rd – Estate of Schwing v. Lilly Health Plan, 562 F.3d 522 (3d Cir. Pa. 2009)
  • 4th – Champion v. Black & Decker (U.S.) Inc., 550 F.3d 353 (4th Cir. 2008),
  • 5th – Holland v. International Paper, No. 08-30967 (5th Cir.) (July 16, 2009)
  • 6th –
  • 7th –
  • 8th –
  • 10th –
  • 11th –
  • D.C. –

Practice Tip #4B Standard of Review: Litigation Issues

From Ron Dean in his post on the BNA Pension and Benefits Blog:

Plaintiffs have several arrows in their quivers for attacking the standard: e.g.,

(a) is the discretion granting language in the appropriate documents and, if so, is it sufficient to grant discretion?

(b) if the language is in an insurance policy, has that language been approved by the State Department of Insurance – and does the state have any business regulating this?

(c) is the person/entity that was granted discretion the same as the person/entity that exercised it?

(d) was the decision within the scope of the discretion granted? and, finally, the Big Doozie –

(e) was the decision maker acting under a conflict of interest?

[This is a work in progress. If you have a tip or suggestion, suggest a topic]

Practice Tip #4C Standard of Review: Checklist

Checklist Factors

For the present, the standard of review issue can be evaluated as follows:

1. Is the plan fully insured, e.g., a group disability plan offered through an insurance carrier? (If not, proceed to #6)

2. If yes to #1, has the state where the policy is issued (N.B.) one of the states that have prohibited discretionary clauses in insurance policies?

3. If yes to #1 and # 2, was the policy issued at such as time as to be subject to the prohibition?

4. If yes to # 1-# 3, inclusive, the standard of review should be de novo.

5. If no to any one of # 1-# 3, then proceed to # 6.

6. Determine if the plan contains an adequate discretionary clause.

7. If no to #6, then the standard of review should be de novo.

8. If yes to #6, then proceed to evaluation of conflict



The following discussion assumes that the plan is an ERISA plan. For more information on that topic, see How To Identify A Self-Funded ERISA Plan .

Also, the plan fiduciary will hopefully be prepared in terms of due diligence review before claims issues arise.

Further, recall that above we divided litigation issues among the following categories:
1. benefit claims

  • pension
  • disability
  • medical
  • severance

2. breach of fiduciary duty

  • claims on behalf of the plan
  • claims on behalf of the individual

3. Section 510 Claims

For the present, we will assume a claim for benefits (category 1) as the context for the following suggestions.

Practice Tip #1 Adhere To The Plan Document Language

Plan documents should be consistent. In most cases, the language in the documents distributed to plan participants will control. In some cases, however, a variance will not be fatal to the plan administrator’s position if the claimant cannot show detrimental reliance (e.g., Eighth Circuit Requires “Detrimental Reliance” For Employee To Recover Based Upon Inaccuracy in Summary Plan Description).

Summaries of plan procedures, employee meetings and other information methods of communicating plan information has landed many an employer in court. For the perils here, see Erroneous Benefits Estimates: Informal Plan Communications Or Plan Documents?

Furthermore, even when a claims decision is viewed under the employer-friendly “abuse of discretion” standard, the claimant will typically prevail where the plan language is unambiguous and the chosen rationale does not comport with the plan language.

Practice Tip #2 Adhere To The Claims Regulations

The minimum requirements for employee benefit plan claims procedures are set forth in 29 CFR 2560.503-1. These regulations apply equally to health benefit plans and other plans and implement the ERISA § 503 requirement that plans to “afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.

Here consider the points raised in a previous post, Claims Denials – Denial Letter Must Properly State Reason.

Practice Tip #3 Maintain Contact With The Claimant and Show Good Faith

These factors aided the plan fiduciary in Hardt v. Reliance Standard Life Ins. Co, — F.Supp.2d —-, 2007 WL 2007941 (E.D.Va.) (July 12, 2007) by showing substantial compliance even though claims review deadlines were missed. See, “Substantial Compliance” Saves Deferential Review Standard In Dispute Over Untimely Review Of Appeal: Substantial Compliance Factor Checklist

Practice Tip #4 Be Mindful Of The Administrative Record

In reviewing a plan administrator’s decision, as a general rule, the court will only consider the evidence and arguments that appear in the administrative record. To determine whether a plan administrator considered and asserted a particular rationale, the court looks only to those rationales that were specifically articulated in the administrative record as the basis for denying a claim. A rejection of a claim does not equate to a rationale.

This may be an appropriate time to review the discussion in Review of Claim Denials (Unit 2): Disclosure Requirements On Administrative Appeal and Review of Claim Denials (Unit 3): Limitation Of Argument To The Administrative Record

Practice Tip #5 Determine Likely Standard of Review

If there is a conflict of interest, the fiduciary may lose the benefit of #4. Likewise, a failure to grant discretion in the plan document may also lead to a loss of the deferential “abuse of discretion” standard. See above the cases and examples provided under Part II in Practice Tip #4A Determine the Appropriate Standard of Review.

Practice Tip #6 Evaluate Possible Insurance Coverage

While this point may not necessarily be apropos, it will be placed here for convenience in view of its importance. To the extent that any fiduciary or errors and omissions coverage may be available, observe the notice requirements in the policy. Failure to do so may forfeit coverage or lead to defense under a reservation of rights.
[This is a work in progress. If you have a tip or suggestion, suggest a topic]

Practice Tip #7 Assess Removal Options

If suit is filed, the plan administrator must be alert to the proper time and procedures for removal of the case to federal court.

By removal of a case, a plan administrator can assert all of the advantages of ERISA preemption of state law claims and, depending on whether the claims can be cast as ERISA claims or not, perhaps complete victory on a subsequent motion to dismiss or for summary judgment.

On the other hand, if a case is improvidently removed, the mistake can be costly. See, The Hazards Of Improper Removal of State Law Cases To Federal Court

28 U.S.C. § 1446 provides that “[a] defendant or defendants desiring to remove any civil action … from a state court shall file in the district court … a verified petition containing a short and plain statement of the facts which entitled him or them to removal….” 28 U.S.C. § 1446(a).

In the context of group health plans, the basis for removal will be federal question jurisdiction under 28 U.S.C. § 1331. Since ERISA is a federal statute, this part of the inquiry appears simple. In practice, the issue can be more complex.

As a general rule, the defendant will need to show the following:

1. The existence of a relevant ERISA plan
2. The plaintiff has standing to sue under that plan
3. The defendant must be an ERISA entity
4. The complaint must seek relief akin to that available under 29 U.S.C. § 1132

Since the burden to show juridiction lies with the removing party, it would be advisable to provide the district court with more than a bare allegation of federal question jurisdiction under 28 U.S.C. § 1331. The basis for removal may not be apparent from the face of the complaint. Cf. Peters v. Lincoln Elec. Co., 285 F.3d 456 (6th Cir. 2002) (plaintiff’s responses to deposition questioning may constitute an “other paper” under 28 U.S.C.A. § 1446(b) which states that notice of removal may be filed within 30 days after receipt by the defendant of a copy of an amended pleading, motion, order, or other paper from which it may first be ascertained that the case is or has become removable.)

Practice Tip #8 Be Aware Of The Possibility Of Waiver Of Defenses

Rule 8(c) of the Federal Rules of Civil procedure states that “[i]n pleading to a preceding pleading, a party shall set forth affirmatively … any … matter constituting an avoidance or affirmative defense.” Where such affirmative defenses are not pled in the response to a pleading they are typically held to be waived and cannot be introduced into litigation at a later stage.

Federal preemption under ERISA has been viewed by many courts to constitute an affirmative defense under Rule 8(c). The policy of Rule 8(c) is to avoid unfair surprise, prejudice, and delay. Thus, arguments that the defense has been waived should be argued and defended on these grounds.

ERISA permits several types of civil actions (e.g., for injunctive relief, for breach of fiduciary duty, etc.) subject to exclusive jurisdiction in the federal courts. Only cases that are essentially a claim for benefits should be subject to the risk of waive. See 29 U.S.C. §§ 1132(a)(1)(A), 1132(a)(2)-(6), 1132(e)(1). See, generally, Wolf v. Reliance Standard Life Ins. Co., 71 F.3d 444, 448-49 (1st Cir.1995), ERISA Preemption Defense Lost By Waiver

(4) if the administrator or fiduciary having discretion “is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion,’ ” id., at 115. Pp. 3–5.