Ninth Circuit Upholds Determination that State Law Claims for Disability Insurance Benefits Are Preempted by ERISA

In Steigleman v. Symetra Life Insurance Company, No. 23-4082, 2025 WL 602175 (9th Cir. Feb. 25, 2025), the Ninth Circuit delved into the complexities of ERISA preemption and the criteria for establishing an employee welfare benefit plan. This case, on its second trip to the Ninth Circuit, sheds light on the nuanced processes involved in ERISA litigation.

Plaintiff-Appellant Jill Steigleman sued her disability insurance provider, Defendant-Appellee Symetra Life Insurance Company, challenging the applicability of ERISA preemption to her state law claims. The core issue revolved around whether the disability insurance provided by Steigleman’s employer, the Farm Bureau Agency, qualified as an ERISA-governed employee benefit plan. Initially, the district court granted summary judgment in favor of Symetra, but the Ninth Circuit reversed and remanded this decision due to unresolved factual questions surrounding the ERISA preemption defense.

Upon remand, the district court held a bench trial and considered additional evidence. Ultimately, the court ruled in favor of Symetra, determining that the Farm Bureau Agency had indeed established an employee welfare benefit plan governed by ERISA. This ruling was based on several critical findings.

The court noted that the Agency’s involvement extended beyond merely paying insurance premiums. Steigleman had selected specific insurance coverages for her employees and imposed limitations on who could receive paid premiums, specifically excluding family members. This level of customization suggested an “ongoing administrative scheme,” a key factor in establishing an ERISA plan.

Additionally, the deduction of premiums from Steigleman’s commission checks and the classification of these deductions as contributions to an employee benefit plan on tax filings further evidenced the existence of an administrative scheme. Such financial coordination and oversight align with the characteristics of an ERISA plan, as outlined in Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 12 (1987).

For these reasons, the Ninth Circuit agreed with the district court and found that the Agency established an ERISA-governed employee benefits plan, thus Steigleman’s state law claims for disability benefits are preempted by ERISA.