Jeff McCall was a big muckety-muck for Provident, which merged with UNUM, the largest disability “insurance” company on earth, in 1998. In 1995 he authored a “Privileged Provident Internal Memorandum” – need-to-know stuff – about ERISA.
ERISA, recall, was originally intended to protect the interests of employees, not insurance companies. It was supposed to "protect ... the interests of participants in employee benefit plans and their beneficiaries."
As Mr. McCall joyfully wrote, it didn’t exactly work out that way:
A task force has recently been established to promote the identification of policies covered by ERISA and to initiate active measures to get new and existing policies covered by ERISA. The advantages of ERISA coverage in litigious situations are enormous: state law is preempted by federal law, there are no jury trials, there are no compensatory or punitive damages, relief is usually limited to the amount of benefit in question, and claims administrators may receive a deferential standard of review. The economic impact on Provident from having policies covered by ERISA could be significant. As an example, Glenn Felton identified 12 claim situations where we settled for $7.8 million in the aggregate. If these 12 cases had been covered by ERISA, our liability would have been between zero and $0.5 million.
How does this translate into your “insurance” claim being denied? Here’s Mr. McCall again:
While it is our objective to pay all valid claims and deny invalid claims, there are gray areas, and ERISA applicability may influence our course of action.
Oh, it influences their course of action, all right.
Here's a look at Mr. McCall's memorandum:
Insurance executive memo on "benefits" of ERISA
You may think this has no relevance now, in 2010, since Mr. McCall penned his master work in 1995. But it’s still indicative of the “insurance” industry mind set, as discussed in this judicial opinion issued on July 30, 2010, at footnote number 3:
Federal judge describes bad effects of ERISA