Wagner Law Group is a nationally recognized practice in the areas of
ERISA and employee benefits, estate planning, employment, labor and
human resources and investment management.
in 1996, The Wagner Law Group is dedicated to the highest standards
of integrity, excellence and thought leadership and is considered to
be amongst the nation's premier ERISA and employee benefits law
firms. The firm has eight offices across the country, providing
unparalleled legal advice to its clients, including large, small and
nonprofit corporations as well as individuals and government entities
worldwide. The Wagner Law Group's 35 attorneys, senior benefits
consultant and seven paralegals combine many years of experience in
their fields of practice with a variety of backgrounds. Nine of the
attorneys are AV-rated by Martindale-Hubbell and six are Fellows of
the American College of Employee Benefits Counsel, an invitation-only
organization of nationally recognized employee benefits
lawyers. Five of the firm's attorneys have been named to the
prestigious Super Lawyers list for 2018, which highlights outstanding
lawyers based on a rigorous selection process. The Wagner Law Group
is certified as a woman-owned and operated business by the Women's
Business Enterprise National Council.
Wagner Law Group
Connecticut Avenue, N.W.
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
25 W. Moody Avenue
St. Louis, MO 63119
Individual Policies May Create
federal district court for the Eastern District of California has
ruled, in Bommarito v. Northwestern Mutual Life, that a
group of individual insurance policies are an ERISA-covered plan
because of the employer's actions regarding the purchase of the
Facts. An owner-employee purchased an individual
long term disability ("LTD") policy and later initiated a claim
on the policy. The insurer initially paid the claim but then
ceased payments, and demanded a refund of benefits paid, stating that
the owner-employee was not, in fact, disabled. The owner then
sued under state law for breach of contract and breach of the implied
obligation of good faith and fair dealing. The insurer
responded by saying that the individual contract was part of an
ERISA-covered plan and, therefore, these state law claims were
preempted by ERISA.
Law. ERISA preempts most state laws that relate to
ERISA-covered employee benefit plans, except for state laws that
regulate insurance, banking, or securities.
Notwithstanding the above, under ERISA's safe harbor provision, an
insurance policy will not be considered ERISA-covered if the policy
satisfies the following four criteria:
contributions are made by the employer or employee organization.
in the program is voluntary.
- The sole
functions of the employer with respect to the program are,
without "endorsing" the program, to permit the insurer
to publicize the program, to collect premiums through payroll
deduction, and to remit them to the insurer.
- The employer
receives no consideration in connection with the policy other
than reasonable compensation for administrative costs it incurs.
Decision. The court said that, "In determining
whether a plan, fund or program (pursuant to a writing or not) is a
reality a court must determine whether from the surrounding
circumstances [if] a reasonable person could ascertain the intended
benefits, beneficiaries, source of financing, and procedures for
receiving benefits." No single act alone is
sufficient to constitute the establishment of a plan, fund, or
program. For example, "the purchase of insurance does not
conclusively establish a plan, fund, or program, but the purchase is
evidence of the establishment of a plan, fund, or program."
The court then went on to note that an employer
"can establish an ERISA plan rather easily. Even if an employer
does no more than arrange for a 'group-type insurance program,' it
can establish an ERISA plan, unless it is a mere advertiser who makes
no contributions on behalf of its employees."
In this case, the court ruled that the employer
had sufficient involvement to create an ERISA-covered plan. The
owner, as employer, had signed a form specifying the eligible class
of employees, and stating that the employer would pay all or part of
the premium, as well as recommend the individual LTD polices to
eligible employees through an endorsement letter. Also,
although individual policies were involved, the employer had made
initial contact with the insurer and had facilitated discounted
premiums which meant it had "contributed" to the program,
regardless of whether it actually paid the premiums or not.
Accordingly, the court concluded that, although
this plan was created through the issuance of a number of individual
insurance policies, an ERISA-covered plan was created because, from
the surrounding circumstances, a reasonable person could ascertain
sufficient employer involvement as well as the intended benefits, the
class of beneficiaries, the source of financing, and procedures for
receiving benefits. Therefore, the court ruled in favor of the