We have warned several times before that ERISA disability cases are not to be trifled with. The presently ongoing matter of Gearlds v. Entergy Mississippi, Inc., 2012 WL 1712441 (S.D., Miss 2012) adds new emphasis to this warning.

The big problem with being unsure of how to proceed is that ERISA law is that sometimes the ERISA statute requires a decision which is counterintuitive to what ordinary common sense (even legal common sense) would indicate.

Gearlds, which at this writing is an undecided appeal, involves an employee who was thoroughly misled by his employer, Entergy, into early retirement in 2005, based on the assurance that he would continue to be covered by the employer’s health insurance plan. He was actually covered for those benefits until 2010, at which point his coverage was terminated by Entergy. After several years of paying, the plan “discovered” it had been mistaken in 2005 and that Gearlds was not an eligible employee under the plan after he retired.

To add insult to injury for Mr. Gearlds, his wife retired from her employment between 2005 and 2010, and he could have received benefits under her policy but turned them down because he believed he was covered under Entergy’s plan.

This case clearly illustrates the importance of knowing ERISA law before claiming a benefit. ERISA rights result from Federal statutes and regulations issued by the U.S. Department of Labor. If a claimant doesn’t meet what’s required in that law and those regulations, the claimant is most likely going to fail in seeking benefits.

Gearlds is a prime example of ERISA litigation that seems to defy common sense. Mr. Gearlds was clearly misled, whether by intention or negligence, by his employer, to do an act which he would not have done if he were properly informed. Yet, because ERISA requires strict interpretation of an employer’s plan, he has so far been denied relief while his employer is permitted to deny him benefits which the employer told him he had.

In ERISA, the plan is the lodestone for benefits. Not only that, under ERISA, the plan administrator interprets the plan and decides what the plan covers. And, courts give deference to the administrator’s decision so long as it is not “arbitrary and capricious”.

What a person can ordinarily do with his property may not hold true if the property is an insurance policy or benefits covered by ERISA. To be certain that your wishes are carried out, the plan administrator’s approval must be obtained.

Otherwise, the administrator may reject what you want to do and your beneficiary may be forced to go without your largesse.