Another way that the ERISA law actually favors insurance companies over individual policyholders is in the fact that your “remedies are limited” if you ever have any problems with your insurer on your disability claim.
Basically, what it means in layman’s terms is that when your insurance comes through your employer, there’s not much that you can do to punish your insurance company if they treat you poorly or otherwise violate the terms of your policy or even the law. Someone who buys their own policy on the free market, for example, could then take their insurer to court if they believe they were abused in some way and sue them for all the damages they were sustained because of the wrongful denial of benefits.
Private policies hold insurance companies much more responsible for their violations. For example, what if they refused treatment for your allergies and you then developed an expensive, chronic condition? You could take them to court and ask for pain and suffering or mental anguish damages. If your policy was not governed under ERISA law, and you could show the insurance company acted in bad faith, they could be sued for bad faith or punitive damages. Perhaps help for your painful back issue was delayed and now you need multiple surgeries? That could be extremely expensive. Of course, nothing is guaranteed, but at least with an individual policy you have the option. Not so much with policies that fall under ERISA Law.
The law only lets you sue for enforcement of the terms of the policy, meaning they only have to pay you your monthly benefits and back benefits.
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Something else unfortunate that ERISA does is to make it incredibly difficult to force your insurer to pay for your legal fees. In most cases, this is considered par for the course for the winning party in a claim that goes to court, but not under ERISA. While some people have been able to make this happen, it’s not automatic.
This is just a few of the ways that gaining disability insurance benefits is made more difficult under ERISA Law, but it’s a big reason why reform is needed.
Though it seems that ERISA Law was only enacted to protect the insurance companies and their denial of your benefits, there are ways to use ERISA Law to get you the disability benefits that you deserve. Marc Whitehead and Associates has over 20 years of experience in ERISA based claims and we can help you win your benefits.
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