Lockton Companies Disability Benefit Ruled to Fall Under ERISA

A federal judge in California held last month that an employer’s actions brought a supplemental benefit within the purview of the Employee Retirement Income Security Act, despite ultimately finding in the insurance company’s favor.

The complaint in Whitlock v. Provident Life Accident and Insurance Co. was filed in April 2025 by Suzanne Whitlock, a participant in a voluntary long-term disability plan provided as a “top-up” benefit option by her former employer, Lockton Companies Corp. When Whitlock left the company, she kept her disability coverage and paid the premiums herself, retaining a 30% discount Lockton had negotiated with the insurer, Provident Life and Accident Insurance Co.

After Provident denied a disability-benefits claim filed by Whitlock years later, Whitlock sued the carrier. She sought past benefits owed and a declaration that Provident violated her insurance policy. Whitlock argued ERISA governed the policy, while Provident claimed it was under state law.

U.S. District Judge Andrew Schopler, in a September 30 order in U.S. District Court for the Southern District of California, found that ERISA governed Whitlock’s supplemental disability policy. Schopler ruled that while Lockton called the policy part of a “voluntary plan,” the employer’s actions—receiving commissions and fees, as well as endorsing the insurance policy as part of its own welfare benefit plan—brought the plan under ERISA’s purview.

“Lockton’s actions would lead any reasonable employee to believe that Lockton didn’t merely help make the plan available, but that Lockton exerted control over the plan or made it appear to be part and parcel of the company’s own benefit package,” Schopler wrote. “For example, Lockton negotiated reduced rates and offered the plan with its broader welfare plan.”

He added, “Because Lockton received a commission in connection with this plan, the policy fails the consideration test and does not satisfy the safe-harbor requirements.”

While Schopler found that ERISA governed the policy, he granted judgment for Provident on the grounds that Whitlock did not meet her policy’s disability test and was therefore ineligible to receive disability benefits.

Provident was represented by Burke, Williams & Sorensen LLP, and Whitlock represented herself. Neither party, nor Lockton, immediately responded to requests for comment.