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Fourth Circuit Concludes That State Law Claims For Life Insurance Benefits Are Preempted

Fourth Circuit Concludes That State Law Claims For Life Insurance Benefits Are Preempted
Friday, February 3, 2017

The Fourth Circuit recently concluded that a Sears employee’s state law claims seeking money damages based on denial of insurance benefits (for failure to submit evidence of insurability questionnaire) was preempted by ERISA.  The Court explained that resolution of the state law claims required examining the plan to determine Sears’ obligations as plan administrator and making determinations on how Sears performed in its administration of the plan.  In so ruling, the Court rejected plaintiff’s argument that his claims were not preempted because he only challenged Sears’ actions prior to the denial of benefits, i.e., the deduction of premiums from his pay and informing him that he had coverage, as a “distinction without a difference.”  The case is Prince v. Sears Holdings Corp., No. 16-1075 (4th Cir. Jan. 27, 2017).

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