The Supreme Court Finds Federal Life Insurance Rules Preempt State Law in Hillman v. Maretta and Reinforces ERISA Protections for ERISA Plan Participants and Beneficiaries

Tax Management Weekly Report, Vol. 32, No. 31, p. 1040, 2013

11 Pages Posted: 7 Aug 2013 Last revised: 26 Aug 2013

Albert Feuer

Law Offices of Albert Feuer

Date Written: August 5, 2013

Abstract

The Supreme Court recently decided in Hillman v. Maretta, that state law and state equitable remedies may not be used to wrest benefits from the duly designated benefits under the Federal Employees Group Life Insurance Act (“FEGLIA”). The reasoning of the decision and the structure of the FEGLIA suggests that a state law ownership claim or associated state court order (other than one complying with plan terms), whether based on domestic relations law, property disposition on death law, contract law, constructive trust law, unjust enrichment, or other equitable principles, is preempted if it attempts to (1) compel a participant in an ERISA plan or in the Federal Thrift Savings plan to choose a beneficiary specified under state law, (2) punish the participant’s estate if the duly designated beneficiary was not such specified beneficiary; or (3) prevent a duly designated beneficiary from receiving or keeping the designated benefits. These conclusions are supported by the ringing endorsement of Hillman and its reasoning in the discussion of federalism principles within the Supreme Court’s majority opinion of U.S. v. Windsor.

Keywords: Pension, Life Insurance, ERISA, FEGLIA, preemption, equitable remedies, domestic relations, constructive trust

JEL Classification: G22, G23, H55, J12, J26, J32, J33, K12, K19, M52

Suggested Citation

Feuer, Albert, The Supreme Court Finds Federal Life Insurance Rules Preempt State Law in Hillman v. Maretta and Reinforces ERISA Protections for ERISA Plan Participants and Beneficiaries (August 5, 2013). Tax Management Weekly Report, Vol. 32, No. 31, p. 1040, 2013. Available at SSRN: https://ssrn.com/abstract=2306911

Albert Feuer (Contact Author)

Law Offices of Albert Feuer ( email )

Suite 7M
110-45 71st Road
Forest Hills, NY 11375
United States
718-263-9874 (Phone)
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