ERISA preempts state laws relating to employee benefit plans. Claims for benefits under a covered plan are governed exclusively by ERISA, which provides limited remedies confined largely to the benefits owed plus in some cases attorney's fees.
Extracontractual and punitive damages are generally unavailable.
Alternative Names:
ERISA Preemption, Employee Benefit Plan Preemption
Why it Matters?
Preemption is why a wrongful benefit denial by a self-funded employer plan produces dramatically less exposure than the same conduct by a state-regulated insurer. It also drives lien analysis, since self-funded ERISA plans can enforce reimbursement provisions that state make-whole and common fund doctrines would otherwise limit. Determining whether a plan is self-funded or fully insured is the threshold question in both contexts.
Frequently Confused with
Related terms
Frequently asked questions
Why does self-funded status matter?
What remedies does ERISA provide?
