No Good Deed Goes Unpunished: The Alexander v. Provident Life and Accident Insurance Company Opinion and Other Consequences of Being Generous Under ERISA

Abstract

A recent case from a federal district court in Tennessee reminds employers that they should familiarize themselves with the basic tenets of the Employee Retirement Income Security Act (ERISA) before providing welfare benefits to their employees. In that case, the employer unknowingly created an ERISA plan just by allowing its employees to buy individual insurance policies and obtain a group discount that they would not have received but for the employment relationship. Unknowingly creating an ERISA plan thus exposed that employer to a host of ERISA issues, including reporting and disclosure requirements, fiduciary responsibilities, and monetary penalties for violating those requirements and responsibilities.