What Is ERISA for Long Term Disability Insurance?

If you have long-term disability (LTD) insurance through your employer, you may have heard the term “ERISA” thrown around. But what is ERISA, and how does it impact your LTD coverage? Understanding the basics of this federal law can help you navigate the complex world of disability benefits and protect your rights as an employee. A seasoned LTD lawyer can explain everything you need to know.

The Basics of ERISA

ERISA stands for the Employee Retirement Income Security Act, passed by Congress in 1974. The primary purpose of ERISA was to establish minimum standards for employer-sponsored retirement plans, such as pensions and 401(k)s. However, the law applies to other employee benefit plans, including health and disability insurance.

Under ERISA, employers who offer benefits must adhere to specific rules and regulations. These include providing employees with a summary plan description (SPD) that outlines their rights and benefits, following a claims and appeals process, and acting in the best interests of plan participants. ERISA also grants employees the right to sue their employer or plan administrator if they believe their benefits have been improperly denied or managed.

ERISA and Long-Term Disability Insurance

For LTD insurance, ERISA sets standards for processing and reviewing claims. If ERISA governs your LTD policy, you must follow specific procedures when filing a claim or appealing a denial. Adherence to these rules can ensure your ability to receive benefits or take legal action.

One key aspect of ERISA is the requirement for a full and fair claims review. When you submit an LTD claim, the insurance company must provide written notice of its decision within a reasonable timeframe, usually 45 days.

You can submit additional evidence supporting your claim during the appeals process, such as medical records or expert opinions. The insurance company must consider this evidence and provide written notice of its decision on the appeal within 45 days, with one 45-day extension allowed for special circumstances.

If your appeal is denied, ERISA allows you to file a lawsuit in federal court. However, there are strict deadlines and procedures you must follow. You must exhaust all administrative appeals before filing suit, and you may have only 180 days from the date of the final denial to take legal action.

Limitations of ERISA

While ERISA provides some protections for employees, it also has some limitations and drawbacks regarding LTD insurance. One major issue is the deference given to insurance companies in their claims decisions.

Under ERISA, courts must apply an “arbitrary and capricious” standard of review to benefit denials. The court must uphold the denial if the insurance company can show a reasonable basis for its decision, even if it is not the only possible interpretation. This can make it difficult for employees to overturn claim denials and obtain the benefits they deserve.

Another limitation of ERISA is the restrictions on damages and remedies. If you sue your employer or insurer under ERISA and win, you can generally only recover your benefits, plus attorneys’ fees and costs. You cannot receive punitive damages or compensation for emotional distress, as you might in other types of lawsuits.

Finally, ERISA preempts state laws that relate to employee benefit plans. You cannot rely on state consumer protection or bad faith insurance laws to hold your insurer accountable for wrongful denials or delays. You must rely solely on the rights and remedies provided by ERISA.

Tips for Understanding ERISA Claims

If you need to file an LTD claim under an ERISA-governed policy, there are several steps you can take to improve your chances of success:

• Read your summary plan description carefully and follow all procedures for filing a claim and submitting evidence.
• Gather all relevant medical records and documentation of your disability, including treatment notes, test results, and physician opinions.
• Keep detailed notes of all communications with your employer, insurer, and healthcare providers, including dates, names, and what you discussed.
• Consult an experienced ERISA attorney who can guide you through the claims and appeals process and help you understand your rights and options.
• Be persistent and keep going if your initial claim is denied.

How Capitan Law Can Help

At Capitan Law, we understand the overwhelming challenges that accompany an ERISA long-term disability claim. Our compassionate attorneys have extensive experience handling these complex cases and fighting for the benefits our clients deserve.

If you have questions about your ERISA long-term disability insurance or need assistance with a claim or appeal, do not hesitate to reach out. Call (267) 419-7888 or contact us online today to schedule a consultation and learn more about how we can help.