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Supreme Court says ERISA trumps state beneficiary laws

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in Employee Benefits Program,FMLA Guidelines,Human Resources,Maternity Leave Laws

The U.S. Supreme Court recently gave payroll administrators a break under the Employee Retirement Income Security Act (ERISA) by ruling that they don't have to monitor conflicting state laws regarding beneficiaries.

The case: David Egelhoff died about two months after divorcing Donna Egelhoff. He never removed her as beneficiary from his life insurance and pension plans, which are covered by ERISA. His kids from an earlier marriage sued to get the money, because Washington state has a law that automatically revokes the designation of a spouse as a beneficiary after a divorce.

The justices ruled, however, that ERISA trumps such state laws. Other-wise, they noted, ERISA administrators would not only have to monitor every state law but would also have to settle complex issues such as arise when the plan administrator, participant and former spouse are all in different states. (Egelhoff v. Egelhoff, No. 99-1379)

 

Watch states for FMLA expansion

More than a dozen state legislatures are debating proposals to add new mandates to their state family and medical leave laws, including making more small businesses comply.

Fifteen states already mandate some type of family or medical leave for employers with fewer than 50 employees, according to the National Partnership for Women and Families. Eight states require leave for children's school activities.

The biggest issue this year: whether states should use unemployment insurance funds to offer paid family leave benefits for workers.

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