ERISA Payroll Practice Exemption in Alabama and Mississippi

Money that is deducted from an employee’s paycheck is applied to payment for employee benefits such as health insurance, life insurance, short-term disability insurance and long-term disability insurance. Employees trust their employers to withhold the proper amount of money to pay for premiums.

Employees may not know which benefits fall under the umbrella of The Employee Retirement Income Security Act of 1974 (ERISA), which are covered under state law and which are not governed by any particular laws. Most employees are unaware that their short-term disability claims or appeals can be affected. In fact, their claims for short-term disability can be denied.

Was your short-term disability claim denied? It may have been denied if your short-term disability insurance was considered an ERISA payroll exemption and therefore not governed by ERISA. For more information about ERISA payroll exemptions in Alabama and Mississippi, or for help if your claim was denied, contact us for a free consultation.

The legal classification of an employee’s benefits may depend on how premiums show up on a paycheck:

  • Paid for by the employee, perhaps with matching funds paid by the employer
  • Paid for by the employer on top of regular pay

When payroll deductions occur regularly, the money paid to insurance companies is considered a “payroll practice.” A payroll practice may be considered exempt from ERISA when a plan does not pay “normal compensation” under 29 C.F.R. § 2510.3-1(b)(2).

Our Montgomery ERISA Attorneys Are Ready to Help

Request an analysis of your case after an insurer has denied your short-term disability claim. Discover whether your pay out of benefits should be affected by ERISA payroll practice exemptions, ERISA liens related to subrogation or any other complicating legal factor. Call The Martin Law Group, LLC ERISA Case Lawyers to schedule a consultation with an experienced local ERISA attorney. We provide ERISA law services throughout Alabama and Mississippi, including major cities such as Huntsville, Mobile, Birmingham, Montgomery, Dothan, and Florence, Alabama; as well as Columbus, Meridian, Jackson, Hattiesburg, Tupelo, and Gulfport, Mississippi.