State Law Preemption Under ERISA: Recent Court Decisions, Causes of Action, Impact on Retirement and Health Plan Administration

Description

Section 514(a) under ERISA provides that ERISA preempts state laws insofar as they "relate to" any ERISA covered employee benefit plan, subject to limited exceptions. This eliminates the possibility of plans having to reconcile inconsistent state and local regulation, but could have significant implications if ERISA preemption applies to a claim.

A determination that ERISA preempts state law would change the entire framework of any litigation of ERISA claims which would then be litigated in federal court with limited possible remedies for plaintiffs. Under Section 514(a), ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA, with limited exceptions. ERISA counsel must be aware of the application of these rules to effectively manage the litigation of claims against plan sponsors and administrators.

The U.S. Supreme Court has issued decisions on ERISA preemption primarily focused on what it means to "relate to" an employee benefit plan concerning the application of the preemption rule, resulting in a very expansive application of ERISA preemption. Recently, the Department of Labor (DOL) issued an information letter reiterating this fact regarding automatic enrollment features in ERISA plans. Recent court decisions also demonstrate the expansive reach of ERISA preemption over state privacy and consumer protection statutes and other state laws that impact ERISA benefit claims.

Listen as our panel discusses the legal challenges of ERISA preemption of state laws and policies, the impact to retirement and health plan administration, lessons learned from recent court decisions, and litigation best practices for ERISA counsel.