Federal & State Regulations | Employee benefits - Tennessee

Summary of differences between federal and state regulations

Employee benefits are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. Tennessee has laws governing group life insurance and legal insurance.

The state laws for group life insurance include the following provisions:

The policyholder is entitled to a grace period of 31 days for payment of premium.
If the insurance ceases because of termination of employment, the individual may be issued an individual policy of life insurance without disability or other supplementary benefits, without providing evidence of insurability, if the application is made within 31 days after termination.
If the group policy terminates, every insured person who has been insured for at least 5 years is entitled to convert to an individual policy.
The validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from the date of issue.

The state laws for legal insurance include the following provisions:

Each contractual obligation for legal insurance must be evidenced by a policy. Each person insured under a group policy must be issued a certificate of coverage. No legal insurance policy or certificate of any kind may be issued until a copy of the form thereof has been filed with the commissioner and approved.
Policies must contain a detailed list and description of the legal services promised or the legal matters for which expenses are to be reimbursed and the amount of reimbursement. Certificates issued under group policies may summarize the terms of the master contract but must contain a full and clear statement of the benefits provided.
The Commissioner may disapprove a form if it is found that it is unfair, deceptive, discriminatory, misleading, provides coverage that is too restricted, or provides for excessive rates.
Any schedule of compensation paid either directly to lawyers or to beneficiaries as reimbursement of costs incurred for covered legal services shall be filed with the commissioner within thirty (30) days after its use.