ERISA Preempts State Law

Analysis of Claim for Services Requires Review of ERISA Plan

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Brainbuilders LLC appealed an order dismissing plaintiff’s complaint against defendants IBEW Local Union 456 Welfare Fund (the Plan), Trustees of the IBEW Local Union 456 Welfare Fund (Trustees or Plan Sponsor), I E Shaffer & Co., and Penn Medicine Princeton Health Princeton Employee Assistance Program (Penn Medicine).

In Brainbuilders, LLC, v. IBEW Local Union 456 Welfare Fund, et al No. A-3484-20, Superior Court of New Jersey, Appellate Division (May 24, 2022) the appellate court applied ERISA preemption to resolve the dispute.

FACTS

Judge Craig L. Wellerson dismissed the complaint after he concluded that the parties’ dispute over payment for medical services that plaintiff, an out-of-network provider, provided to a patient was preempted by federal law because its resolution required consideration of the subject Plan’s terms, which had to be resolved in accordance with the Employment Retirement Income Security Act of 1974 (ERISA).

In granting the motion, the judge explained that because the parties disagreed as to whether the authorization that stated it lapsed in 2021 contained an alleged clerical error, in order to resolve it, reliance on the Plan’s governing provision was required.

ANALYSIS

The court was satisfied that all of the language of the Plan is critical to the determination of whether or not the plaintiff has a right to be reimbursed, and the court was well satisfied that the claims of reimbursement are so tied to the language of the Plan that it is inescapable for the court to conclude other than that the dispute relates to the Plan itself. Accordingly, the court granted defendant’s motion to dismiss the plaintiff’s complaint.

Resolution of the parties’ dispute would at the very least require a court to refer to, interpret, and apply the clerical error provision of the Plan-clearly not a cursory task such as verifying payment rates in a chart.

ZALMA OPINION

ERISA is a federal program. Disputes over plan benefits are subject to federal law. State law with regard to ERISA is preempted by Federal law and the disputes over an ERISA plan belongs in federal court and the rights the plaintiff might have are limited and that is why the plaintiff tried state court. Plaintiff’s attempt failed because of preemption.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE is available at http://www.zalma.com and zalma@zalma.com.

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