Review Questions #3

[Rip Verkerke <ripv@virginia.edu>]

A student asked:

I have a couple of questions I hope you wouldn't mind answering:

1. For the QPSA, I take it that if the worker dies before retirement the
spouse is entitled to 1/2 of whatever the worker would have received had he
retired at that moment.  I also take it that the spouse has no election
opportunity for QPSA.  Is that correct?

2.  FMLA-- I am confused about the 3-day incapacity requirement-- is it
required when the ee has had inpatient treatment or only when the ee has had
continuing treatment?

3. Met Life-- as I understand it, the Court said that the state law
indirectly but substantially relates to an ERISA plan, but that because the
savings clause allows the states to regulate insurance plans that the law is
not preempted.  Thus the only way for an er to avoid state insurance laws is
to own the actual health plan because under the deemer clause it could not
be considered insurance.  Is this accurate?

Rip answered:

(1) You are correct that the QPSA consists of half of the normal retirement
benefit that the employee has earned.  However, it is possible for the
spouse to elect to receive the QPSA in lump-sum form.

(2) As my earlier email message entitled "FMLA clarification" explained, the
"more than 3 days of incapacity" requirement only applies to the "continuing
treatment" prong of the statute.  Thus, in-patient care is enough by itself
to establish the existence of a "serious health condition."

(3) Right you are.  By regulating the content of insurance contracts, the
state law "relates to" the content of ERISA benefits.  And the savings
clause permits the state to enforce coverage mandates that regulate the
business of insurance.  However, a self-insured plan finds protection from
the mandate because the deemer clause prevents an ERISA plan from being
treated as an insurer for the purposes of state laws that the savings clause
protects from preemption.  The net effect of these statutory interactions is
the so-called "self-insurance anomaly."

Regards,

Rip