Erisa - Vapor Benefits

Employee Advocate – - August 12, 2003

Cash Balance Plans are not the only way employees are coming up short, according to The Wall Street Journal. You may find that your disability-income insurance is worthless, just when you need it.

Donya Anderson had $7.36 per month deducted from her paycheck for disability-income insurance, sold by UnumProvident. But when she needed the insurance, it was not there. Her claim was denied.

She made the reasonable decision to sue UnumProvident. She ran into one of the endless little hidden loopholes that the average employee could not possibly know about. The Employee Retirement Income Security Act (ERISA) exempts employer-sponsored pension plans from state law.

And, you thought ERISA was your friend! Not only that, but the Supreme Court has ruled that punitive damages can not be awarded in ERISA cases! The ERISA law and the Supreme Court teamed up to do Ms. Anderson in. They will be glad to do the same for you.

You could pay premiums on employer-sponsored health-care coverage for twenty years. When you have a claim, the insurance company could simply deny it and that’s the end of it!

ERISA laws were intended to protect pensions. But, now the law has migrated into other areas. And, not to the benefit of the employee. The law is protecting an entity that needs no protection – the insurance company.

Joseph Belth, professor emeritus for insurance at Indiana University in Bloomington, said “They've turned ERISA on its head. It was supposed to protect employees, and it's being used to protect insurers.”

A smoking gun was uncovered in 1995. A Provident Corp. memorandum written by a Provident assistant vice president stated: “…there are some gray areas, and ERISA applicability may influence our course of action… The advantages of ERISA coverage in litigious situations are enormous.”

Why does every good thing for employees always get perverted? One reason: employees do not pay enough attention to the sleaze bags that manage to get into Congress. If enough employees were to wake up to what is happening, the corporate toadies in Congress could be rendered ineffective in one election cycle. For good measure, the rest of them could be eliminated in the next election cycle.

It’s not that difficult. Just look at the candidates voting records. Those who give the store to the corporations should be showed the door. Until this happens, employees will continue to come up short on every turn.