Texas Insurance Law vs. ERISA (The Elephant)

The State of Texas regulates insurance companies by way of the Texas Department of Insurance. Texas has laws telling the insurance companies and the Texas Department of Insurance how they should be conducting their business and these laws are found in the Texas Insurance Code.

These Texas insurance laws are applicable to all citizens and businesses through-out Texas. So whether you live in Dallas, Fort Worth, Arlington, Grand Prairie, South Texas, East Texas, west to Weatherford and Parker County or all the way to El Paso, the law is the same. This is a good thing in that a person or company knows what to expect when it comes to insurance policies and the guiding principles for their interpretation.

The problem with Texas Insurance Laws is the elephant in the room most people do not know about and lawyers usually wished did not exist. This elephant is the Federal Laws that pre-empt, or trump, State Law. The relevant Federal law in the insurance arena is known as the “Employee Retirement Income Security Act“, also known as ERISA.

This law passed by the Federal Congress is a thorn in the side of Texas Insurance Attorneys. Even though an Insurance Attorney may know about this law and how it works, it has powers that severely limits rights claimants have under Texas Law. The tricky part in this area of Insurance Law is knowing the distinctions between when ERISA controls and when Texas Insurance Law is controlling. The recent case, Lone Star OB/GYN Associates vs. Aetna Health Inc., is a case where the courts allowed Texas Law to be controlling in the dispute and thus allowed for a recovery against the insurance company that otherwise would not have been allowed.

Only an Insurance Law Attorney like Mark Humphreys is going to be versed enough with ERISA to be able to properly advise a client the direction a case should take. Feel free to give us a call to discuss your situation.