Court Rules Against Unum Holding Plaintiff's Plan is Exempt from ERISA Coverage
In Paula Le v. Unum Insurance Company of America, plaintiff was severely injured in an automobile accident and was unable to return to her job. She was covered by an employee welfare benefit plan (the plan) through her employer, Opelousas General Health System (OGHS). She was awarded long-term disability benefits beginning in September 2013.
In January 2017, Unum informed her it was terminating her benefits. Plaintiff insisted the termination was done without just cause. She filed a lawsuit in a Louisiana state court, alleging her benefits had been unreasonably terminated, and that Unum had violated several Louisiana laws.
Unum removed the case to federal court and filed a motion asking the Court to rule that the plan was governed by the Employee Retirement Income Security Act (ERISA) and Louisiana law did not apply. If Unum could convince the Court of this, then Plaintiff would be limited to receiving only the long-term disability benefits owed under the plan.
Plaintiff argued that ERISA did not apply to her plan. She said since her employer “operates as a political subdivision,” the plan was a governmental plan, exempt from ERISA regulations. If ERISA does not control, it opens the door for Plaintiff to pursue state remedies such as breach of contract, bad faith, and other actions for damages beyond the long-term benefits compensation.
After an in depth analysis, the Court ruled in favor of Plaintiff and held, “that the employee benefit plan established and maintained by OGHS is a ‘governmental plan’ which is exempt from ERISA coverage.”
ERISA Coverage and Exemptions
ERISA regulates employee benefit plans, but specifically exempts “any employee benefit plan if such plan is a ‘governmental plan.'” This case is limited only to the procedural issue of whether or not Plaintiff’s plan met the criteria as a governmental plan in order to be exempt from ERISA regulations.
OGHS is a Political Subdivision of the State and its Plan is Exempt from ERISA
The Supreme Court of the United States established a test to use when determining whether or not an entity is a political subdivision as defined by ERISA. First, is the entity created directly by the state. Second, is the entity “administered by individuals who ae responsible to public officials or to the general electorate.” Plaintiff need only prove the entity is a political subdivision under either the first or second prong, not both.
After analyzing the history of OGHA, the court held that it was a political subdivision of the state, and therefore, its plan was a governmental plan exempt from ERISA coverage.
OGHS is an Agency or Instrumentality of a Political Subdivision of the State
Even if an employer is not a political subdivision, it is still exempt from ERISA coverage if it is an agency or instrumentality of a political subdivision. The Court evaluated six factors to consider when making this determination. It noted that an entity does not have to meet all six criteria, but courts make their decisions weighing the factors as a whole.
The Court determined that five of the six factors weighed in favor of finding OGHS an agency or instrumentality of a political subdivision. The Court found “the employee benefit plan is a governmental plan exempt from ERISA’s coverage.”
This case was not handled by our office, but we thought it could be helpful for those who may have state claims under an employment benefit plan exempt from ERISA coverage. If you have questions about this, or any aspect of your disability claim, contact us at Dell & Schaefer for a free consultation.
Resources to Help You Win Disability Benefits
Get Your Unum Disability Application Approved
Prevent a Unum Disability Benefit Denial
Negotiate a Unum Lump-Sum Settlement
Our goal is to negotiate the highest possible buyout of your long-term disability policy.
Policy Holder Rating
Q: Does UNUM periodically review Group Long Term Disability Insurance claims/payments? For example, do they verify medical eligibility every five or ten years?
Q: My group long term disability insurance allows me to work part time up to 20% of my pre-disability earnings without affecting my benefit. If I take advantage of this, will Unum use this to deny my benefit?
After appeal filed by Attorney Jay Symonds, UNUM overturned previous denial of long term disability benefits for South Carolina Nurse
Unum Overturns Original Decision to Deny Benefits to Disabled Account Manager Following Appeal Submitted by Dell Disability Lawyers Appeals Team
After appeal filed by Attorney Jay Symonds, UNUM overturned its previous denial of long term disability benefits for Colorado Plumber
Court Rules Plaintiff's Medical Records Was Replete With Evidence Supporting Claim of MS & Was Not A Pre-Existing Condition
After paying for 13 years Unum Denies Disability Benefits to Woman with Lyme Disease and Endometriosis
Inexperienced Lawyer Handles Unum Disability Lawsuit and Fails to Provide Evidence to Support Occupational Argument
Massachusetts court overturns Unum's decision to terminate disability benefits after paying for nearly ten years
Reviews from Our Clients
Very satisfied with the work of this team. Took well care of my case and took all the necessary time to be responsive and attentive when I had questions. Guided me through recovery and returning to normalcy. All thanks to Jason & Tabitha, thank you!
I’m extremely satisfied with the experience I have had with this firm from day one. The lawyer who has handled my case, Alex, is very efficient and attentive to all my questions and concerns. They are always aware of how my case has gone and they care about my health. I feel optimistic with them because they are very attentive during the process of my claim. I would not hesitate to recommend families and friends if in any situation they need their services. Kathleen as well has been very well and assisted me with this case. I highly appreciate everything they have done for me.
It’s unfortunate when disability insurance companies come after older disabled policyholders just to help their bottom line. It can be a living nightmare the damage they can do to a family. Dell Disability Lawyers are polite, understanding and knowledgeable. They call you back and answer any question you have no matter how unimportant it can be. The amount of stress they took off of myself and family was incalculable. I recommend them highly to take care of any disability case whether it be filing for benefits or reversing a claim decision. They are outstanding.
I could not have been happier or more appreciative of the hard work they performed on my behalf. I was well briefed on my case and it was closed in a timely manner with a financially successful resolution.
Mr. Symonds and Sonia as well as everyone else we have worked with throughout this process have been very helpful, professional and caring to our situation. We are very thankful to have this great team on our side.
Without them my LTD company was dropping my plan with me still suffering from my accident, even with doctor’s statements I’m still disabled. The LTD company didn’t want to advance my policy to the next stage of years of pay. Dell Disability Lawyers saved my policy, and helped to enforce the LTD company’s own policy (for its policy holder, me) that I would be covered still under the LTD policy I had paid for at my previous job, when my accident occurred. These lawyers know what they are doing and can help you too. LTD companies will try to drop you when you still need coverage just because they don’t want to pay on your policy anymore. Don’t let them break contract with ya because they are trying to get out of it. Hit em with legal action to ensure the continuation of your policy you paid for. Dell Disability worked very well for me and continue to do so.
I was denied long term disability benefits from The Hartford after being on it for years. I found Dell Disability Lawyers after doing research online. In a matter of days they responded and explained to me everything that would be done. Dell Disability Lawyers were able to settle my suit against The Hartford very quickly and responded to me quickly. I would definitely recommend this team of lawyers for anyone that is fighting for their disability insurance.
I have had nothing but a great experience with Dell Disability Law Firm. Mr. Alex Palamara and his team went above and beyond my expectations. They will respond to emails and phone calls in a timely manner. Thank you once again for taking my case.
This law firm is the best so far. MetLife denied me two times, they appealed two times for me and they won of course. So if you are on disability and want a chance at winning your case use this firm Dell disability lawyers, kind courteous understanding and they get the job done. You won’t be disappointed.