In Helfman v. GE Group Life Assurance Company, No. 08-2168 (6th Cir. 2009), the Court faced the question of whether a program, which consisted of two insurance policies that paid long-term disability benefits to employees (the “Program”), was subject to ERISA. The plaintiff did not want the Program to be subject to ERISA, because he was bringing a state law claim against the insurers under the Program which ERISA would preempt. The case centered on whether the Program was exempt from ERISA under the “safe harbor” found in the Department of Labor’s regulations at 29 C.F.R. § 2510.3-1(j). For the safe harbor to apply to the Program, among other requirements of the regulations, no premiums may be paid to the Program by an employer (the “No Premium Condition”).
In the case, the plaintiff’s employer paid all of the premiums under the Program, except as to the plaintiff, since the plaintiff had reimbursed the employer for the premiums the employer had paid to the Program on the plaintiff’s behalf. The plaintiff argued that, since he paid his own premiums, the No Premium Condition is satisfied as to the plaintiff, and the Program should not be subject to ERISA with respect to the plaintiff. The Court responded to this argument by stating that the purpose of ERISA preemption is to avoid conflicting federal and state regulation and to create a nationally uniform administration of employee benefit plans. Thus, a program providing employee benefits cannot be subject to ERISA as to some employees, but not subject to ERISA, and thus subject to state law, as to the others. Where, as here, the employer pays the premium due on behalf of at least one employee, and regardless of whether the other employees pay their own premiums in full by direct payment to the insurer, by reimbursing the employer or by some other means, the No Premium Condition is failed as to all employees, and ERISA must apply to the program in question in its entirety. Thus, the Program is subject to ERISA, as to all employees.