ERISA
The Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1001 et seq.), the principal federal statute governing private-sector employee benefit plans, including retirement plans (401(k), pension) and welfare benefit plans (health, disability, life). Imposes fiduciary duties, vesting requirements, reporting obligations, claims procedures, and a comprehensive enforcement scheme. ERISA preempts most state laws "relating to" covered plans, among the broadest preemption doctrines in federal law.
ERISA, the Employee Retirement Income Security Act of 1974, is the principal federal statute governing private-sector employee benefit plans. ERISA covers two principal plan categories: (1) pension plans, defined benefit plans, defined contribution plans (401(k), profit sharing); (2) welfare benefit plans, health, disability, life insurance, severance plans. ERISA imposes fiduciary duties, vesting requirements, reporting obligations, and claims procedures, with comprehensive federal enforcement. Most importantly for litigators, ERISA preempts state laws "relating to" covered plans, channeling most benefit-plan disputes into federal-law analysis.
Plan categories
ERISA covers two principal plan categories: (1) retirement (pension) plans, including defined benefit pensions, defined contribution plans (401(k), 403(b), profit-sharing, ESOP), and money purchase plans; (2) welfare benefit plans, group health insurance, dental, vision, disability, life insurance, severance plans, EAPs, and similar plans. Government plans, church plans, and certain other plans are exempted.
Fiduciary duties
ERISA imposes specific fiduciary duties on plan fiduciaries (trustees, plan administrators, investment managers, named fiduciaries): (1) duty of loyalty, act in the exclusive interest of plan participants and beneficiaries; (2) duty of prudence, act with the care, skill, prudence, and diligence of a prudent person; (3) duty to diversify, investment diversification to minimize large losses; (4) duty to follow plan documents; (5) prohibited transactions, avoid self-dealing, conflicts of interest, transactions with parties in interest. Breach of fiduciary duty can result in personal liability for losses.
The preemption doctrine
ERISA preemption, 29 U.S.C. § 1144, is among the broadest preemption provisions in federal law. ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA. The "relate to" test is expansive: state laws are preempted if they have a "connection with or reference to" ERISA plans. Common preempted state laws: state insurance bad-faith claims (Pilot Life); state fraud claims arising from benefit denials; state law actions for tortious interference with benefits. Saved from preemption: state laws regulating insurance, banking, securities (saving clause); generally applicable state criminal laws. The "deemer clause" prevents states from regulating self-funded ERISA plans through the insurance saving clause.
Civil enforcement, § 1132
ERISA civil enforcement (§ 1132) provides specific remedies in federal court: (1) (a)(1)(B), recover benefits, enforce rights, clarify rights to future benefits, most common claim; (2) (a)(2), fiduciary breach claims for plan losses; (3) (a)(3), equitable relief for ERISA violations; (4) (g), discretionary attorney's fees. Federal courts have exclusive jurisdiction over most ERISA claims. ERISA remedies are limited compared to state-law alternatives, no compensatory damages for emotional distress, no punitive damages, no jury trials in most claims. The remedy limitations are a principal disadvantage of ERISA preemption for plaintiffs.
Standard of review for benefit denials
The standard of review depends on plan terms: (1) de novo review, default if plan does not grant discretion to administrator; (2) arbitrary and capricious / abuse of discretion, if plan grants discretionary authority (Firestone v. Bruch). Most ERISA plans grant discretionary authority; abuse-of-discretion is the typical standard. Glenn v. MetLife (2008) requires consideration of conflicts of interest as a factor when administrator both decides claims and pays benefits, common in self-insured plans. The deferential review standard makes plan-level claim denials difficult to overturn in litigation.
Claims procedures
ERISA imposes specific claims procedures (29 C.F.R. § 2560.503-1): (1) initial claim decision, within 90 days for disability, 30 days for health (with extensions); (2) denial notice, must include specific reasons, plan provisions, additional information needed, appeal rights; (3) internal appeal, typically 60 days for claimant; full and fair review by different reviewer; (4) final decision. Failure to exhaust internal appeals can bar litigation; failure to follow procedures by administrator can result in de novo review (loss of deference).
For Texas employers, ERISA touches almost every benefit decision involving covered plans. Best practice: (1) ensure plan documents grant discretionary authority to administrators (preserves abuse-of-discretion review); (2) follow claims procedures rigorously; (3) coordinate fiduciary committees and document fiduciary decisions; (4) maintain compliance with reporting obligations (Form 5500, summary plan descriptions); (5) for self-funded plans, leverage preemption against state-law claims; (6) coordinate with COBRA, FMLA, ACA obligations. For employees and beneficiaries: (1) exhaust internal appeals before suit; (2) understand abuse-of-discretion vs. de novo review; (3) recognize ERISA's limited remedies (no jury, no compensatory/punitive damages); (4) preserve fiduciary breach theories where applicable. Common pitfall: parties pursuing state-law claims in benefit disputes, generally preempted, leaving the claim subject to ERISA's narrower remedy framework.