Although the ERISA law generally preempts state law causes of action that relate to claims for employee benefits, a recent federal court ruling from California Dale v. Reed Group, Ltd., 2015 WL 6954915 (N.D. Cal. November 10, 2015), permitted an exception to that general rule. Ed Dale, an employee of Intel Corporation who became disabled, was refused long-term disability benefits. In challenging the benefit denial, he added a claim for intentional infliction of emotional distress (IIED), which Intel and its benefit administrators tried to have dismissed on ERISA preemption grounds. He maintained that in the course of his claim, he was accused of lying or exaggerating his claims, urged to take experimental medication and forced to undergo examinations that caused pain, emotional distress and anxiety.
A recent ruling from a federal court in Alabama - Rosen v. Provident Life and Accident Insur. Co., 2015 WL 260839 (N.D.Ala. January 21, 2015) addressed a controversial issue involving ERISA preemption. Typically, ERISA is implicated only where an employer sponsors a retirement plan or offers group coverage to its employees for disability, life, or health insurance. However, several insurance companies offer employers a discount on premiums if they are able to issue a series of individually underwritten disability insurance policies, and the premiums are billed to the employer on a single bill. This often occurs with medical and legal professional practices. Many courts have held that such a practice established an ERISA welfare benefit plan.