Employer Paid Bennies…Beware!

Benefits – bennies – paid by your employer are hard to pass up, right? But, did you know that if your employer pays ANY of your disability policy premiums or you receive employer premium discounts, your policy can be converted into an ERISA case making it difficult, if not impossible to receive the benefits you deserve.

Take the case of FRANK D’ELIA, M.D. v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Civil Action No. 15-3040, Slip Copy (2016).

Dr. D’Elia, a urologic surgeon, purchased five occupation-specific disability insurance policies through Unum Insurance Company’s Flexbill program through his employer, where he received a premium discount. Unum’s sales representative assured Dr. D’Elia that these policies would protect him should he become unable to perform surgery. Additionally, over the thirty years of coverage, for unknown reasons, his employer paid eight (8) of his disability premiums.

While making household repairs in June 2012, Dr. D’Elia permanently injured his left index finger. As a result of the lingering pain and weakness in his finger, he could no longer perform surgery. After three decades of paying his disability insurance premiums, the good doctor thought he would be covered. Wrong. Unum denied all of his claims.

When Dr. D’Elia filed a lawsuit against Unum in state court, Unum removed the case to federal court where the case is subjected to ERISA rules and that’s where Dr. D’Elia was destined to lose. Why? Because his employer paid an occasional premium along with receiving employer premium discounts. These two facts prevented Dr. D’Elia from receiving benefits under ERISA’s Safe Harbor regulations and cost him millions of dollars.