What is the ERISA “Safe Harbor” Provision And Why Should I Care?

The ERISA “safe harbor” provision is covered under 29 C.F.R. 2510.3-1(j).

If a long-term disability plan, or other employee insurance policy, is excluded from ERISA coverage if it meets the criteria under this provision. The criteria include:

1) The employer makes no monetary contribution to the policy;
2) Employee participation in the policy is completely voluntary;
3) The Employer’s only function, without endorsing the policy, is to allow the insurer to publicize the policy to employees, and collect the premiums through payroll deduction;
4) The only consideration the Employer receives is in the form of an administrative fee for the payroll deduction function.

A policy must meet all four (4) criteria in order to be exempted from ERISA coverage. If these criteria are found to exist, the plan can be exempted under ERISA. Why should Employees / Claimants care if their plan can be exempted under the safe harbor provision of ERISA? The answer is because ERISA favors the Employer/inurance company. When attempting to enforce the payment provisions under the policy, it is to the advantage of the Employee / Claimant if the policy can be exempted from ERISA coverage, thus, the Employee / Claimant can argue coverage (payment) under state law.

If you are involved in a long-term disability claim and need a qualified attorney to review your case at no charge, please call the professionals at Cody Allison & Associates, PLLC (615) 234-6000. You can also visit our website LTDanswers.com. At Cody Allison & Associates, PLLC we fight denied long term disability claims everyday. It’s what we do. If you believe you have been wrongfully denied your ERISA, or non-ERISA, long-term disability benefits, give us a call for a free consultation. You can reach Cody Allison & Associates, PLLC at (615) 234-6000. We are based in Nashville, Tennessee; however, we represent clients in many states (TN, KY, GA, AL, MS, AR, NC, SC, FL, MI, OH, MO, LA, VA, WV, just to name a few). We will be happy to talk to you no matter where you live. You can also e-mail our office at cody@codyallison.com. Put our experience to work for you. For more information go to www.LTDanswers.com.