I have a bank that I insure for Long Term Disability. They have self funded their short term disability for years and I just found out that they have no handbook or formal written agreement that defines their short term disability. What kind of trouble can they get into without a written agreement? Thanks.

It depends on what administrative tasks the STD involves. It might be just a wage continuation program requiring no administration. If so, ERISA would not come into play.

If to get the STD, as the name suggests, there must be 'disability', then there must be a definition of disability and determinations of who is and is not when a claim is made. That would then involve ERISA and the requirement for a written plan document.

The trouble might be that a court would 'write' the definition for you, if a denied employee pushes it.

My fault for not stating this. They want to hire a woman who is already pregnant. My concern is that without a written agreement in place there could be some discrimination suit or be setting a precedent involving her filing for short term disability. Thanks.

Check the federal Pregnancy Discrimination Act of 1978, and possible similar state law. While the PDA has a 15 employee minimum threshold for application, my state applies the federal PDA to employer's with as few as five.