Industry protected under ERISA as Texas state law is pre-empted

August 1, 2004

On June 21, a unanimous U.S. Supreme Court held that state law is completely pre-empted by the Employee Retirement Income Security Act (ERISA)of 1974 with respect to disputes over denial of benefits under ERISA-regulated health benefit plans. The Court's ruling appears to insulate managed care organizations from punitive and extra-contractual damages related to denial of benefits. In its decision, the Court overruled two lower court rulings.