Has your group disability claim been denied? If so, you need to know that your claim is governed by the federal law known as ERISA. Not only does this limit your lawsuit causes of action; ERISA limits legal remedies in response to the insurance company’s violations.
In the video above, disability attorney Marc Whitehead explains how LTD insurers will use ERISA law to their advantage to deny your disability claim. It is actually the lack of legal remedies available in ERISA-based cases that hurts claimants—and the insurance companies are fully prepared to capitalize on that.
How Federal ERISA Limits Legal Remedies (as opposed to State Contract Laws)
A claimant in a group disability claim is limited to only such remedies as ERISA authorizes. Remedies available under ERISA generally constitute “appropriate equitable relief” – i.e., the insurance company might be directed by the court to pay the benefits you deserve and should have been paid in the first place.
ERISA does not apply to privately or individually-purchased insurance.
Individual insurance policies are more expensive to own, and the coverage is written to protect you as an individual (not a group of employees) in various specific circumstances (not generally). Individual policies are regulated by state insurance and contract laws. These laws offer claimants many more legal protections and remedies, such as bad faith contract law, Deceptive Trade Practices Act (DTPA), emotional distress, special damages, punitive damages and much more.
What Legal Remedies Are Not Available under ERISA?
In an ERISA-base claim, you must provide the case reviewer with substantive medical and vocational evidence proving that you are disabled and can no longer work. If the insurer denies your claim, you must follow the insurance company’s administrative appeals procedure according to the instructions in the denial letter. Because if the insurer denies your appeal, the final step is to file a civil action in Federal Court.
Once in court, ERISA regulations limit your rights and protections in the following ways:
- No second chances. If you failed to follow the instructions in the denial letter to appeal the denial, or do not meet the appeal deadlines, you cannot sue in court.
- No trial by jury. Claimants do not have the right to a jury trial. The judge decides the case, and will only review the same case file that the claims administrator reviewed to deny the claim and the subsequent appeal.
- No state law protections. For Non-ERISA disability claims, each state has its own statutes. For example, your state might allow protections against illegal insurance practices, including bad faith, DTPA, statutory insurance violation claims, loss of credit claims, punitive damages, and others.
- No punitive or consequential damages. Because ERISA preempts state legal remedies, if a judge finds the insurer has wrongfully or fraudulently denied your benefits, you are not entitled to punitive damages. This means the court may not punish the insurance company for monetary compensation to you. Neither can you collect compensation for emotional The only consequence the insurance company faces is to pay the benefits they owe you, and possibly attorney’s fees. Because they are not held accountable, insurers are very motivated to take the small risk of denying valid claims.
- No Discovery. Discovery is not available on judicial review. You may not engage in discovery of relevant evidence, there is no cross examination of witnesses, no requests for production, no depositions of your doctors, co-workers or family, or of the insurer’s claims personnel. No new information may be submitted to support your claim.
Fighting Back when ERISA Limits Legal Remedies – The Steps You Must Take!
ERISA law is federal and differs drastically from state contract and insurance laws. Specialized knowledge is needed to handle these cases correctly. If you have been denied disability benefits under a group plan, make sure you consult with an experienced disability insurance lawyer, because what you do not know can cause great harm.
In spite of these difficulties, we are able to help claimants across the U.S. appeal ERISA disability claim denials and win their case.