Long term disability insurance for employees is regulated by federal ERISA law. As shown in our video above, it is clear that ERISA denies due process in group disability claims – allowing insurers to deny you the benefits you deserve.
What exactly is “due process” as it applies to disability insurance benefits? Due process of law refers to the constitutional guarantee to all persons of fair treatment through the normal judicial system. It is a basic principle of fairness in legal matters, especially in the courts.
So when we say the federal ERISA law – The Employee Retirement Income Security Act of 1974 – denies due process, we mean that restrictions are already working against you in various ways, depriving you of fair treatment.
Four Ways ERISA Denies Due Process in Group LTD Claims
- The insurance company (who is not an impartial reviewer) decides whether you are disabled. Whatever proof you provide to the claims adjuster in your application or on appeal, the adjuster makes the decision whether or not you are disabled.
- You cannot submit new evidence or proof of your disability once all administrative appeals have been exhausted, even if decisive medical findings become available.
- What happens if you file a lawsuit against the insurer? The judge will do one of two things: (1) if there is a discretionary clause in the Plan, this means the insurance company has authority to decide that you are disabled. In this case, the judge is held to ruling whether the insurance company abused its discretion in denying your claim. (2) If there is no discretionary authority given to the insurance company by the Plan, the judge may independently review your claim file in a “de-novo” review, and decide whether you are disabled.
- If you ultimately sue your insurance company for the wrongful denial of benefits, and you win, the insurer faces no punitive actions. They have nothing to lose, which is why so many ERISA-based claims are denied unfairly. The worst that happens in most cases is that the insurance company is told by the court to start paying you the benefits you’re entitled to. It is much cheaper for them to go to court and hope for a “win” than to pay thousands or millions of dollars in claim payouts.
Improvements to ERISA Claims Handling Are Now In Effect
As of April 1, 2018, new rules on how insurers are to handle ERISA disability claims are in force. Announced by the Department of Labor, this final rule gives employees new protections when dealing with insurance companies who unfairly deny their claims for disability benefits.
We break down the new ERISA disability regulations here and explain how certain aspects of group disability claims may start to lean more in your favor, hopefully restoring a degree of due process back into ERISA claim proceedings.
The battle with insurance companies is a never-ending one.
What you must remember is that in most cases, the burden is on you, the claimant, to provide the proof that you are totally disabled and unable to work. What you may be up against are disability insurance companies whose claims departments have perfected the process for deceptive and unfair claim denial.
If you have concerns, we urge you to speak with an experienced disability lawyer at Marc Whitehead & Associates.