The topic of today’s video is ERISA preemption. ERISA stands for the Employee Retirement Income Security Act of 1974. It is the federal law that governs most group long term disability claims.
To preempt means to displace something. ERISA preemption means that in a dispute over a group disability claim, federal ERISA law displaces state law and commandeers the entire process. All state laws (that otherwise would play a role in insurance disputes) become void in an ERISA disability case.
The real significance of ERISA preemption is, if your insurer acts in bad faith and engages in fraudulent claim denials, you lose important protections and remedies. You cannot sue or take legal action against your insurer for a number of unfair denial tactics.
ERISA Preemption Protects Insurance Companies, Not Disabled Claimants
If your group disability claim was unfairly denied and you proceed to fight the denial, you cannot immediately sue the insurance company. You must first go through an administrative appeal to the insurer. This process takes many months during which you are not receiving benefits, and may result in a continued denial because the insurer is reviewing a case it already doesn’t want to pay.
If the administrative appeal is denied, you may now bring a federal ERISA lawsuit. However, you lose out on five crucial recourses or remedies. Under an ERISA claim, the insurance company is not exposed to bad faith or punitive damages as they would be under state laws, such as:
- mental anguish / emotional distress damages
- consequential damages (out-of-pocket expenses paid because of the denial, such as lost profits and attorney’s fees)
- punitive damages
- deceptive trade practices
- wrongful death damages
When an insurance company denies or terminates a legitimate claim, the financial harm imposed on the claimant can escalate in many ways, such as loss of home through foreclosure, loss of vehicle, loss of credit, loss of retirement or savings and bankruptcy.
With ERISA preemption, you lose the ability to sue for significant monetary awards that could, if they were awardable, help rectify such huge financial losses.
If, however, you were to file a claim under a privately-held disability policy, these legal recourses would be available to you. Private claims are governed by state insurance and contract laws. Under state law, you can recover damages for much more that what the disability policy provides as monthly disability benefits.
What recourse does this leave a claimant?
There actually are many ways to fight back and win your claim. Here is what you can and must do to prevail.
The first thing to understand is that your case must be approached in a different manner than a claim that is governed by state insurance law. Choosing the right attorney to handle your ERISA disability claim can have a major impact on your case, and is perhaps the most important decision you can make. ERISA is a highly specialized area of law, and not all disability law firms are equipped or trained to take these cases on.
You need experienced ERISA lawyers to advocate for you.
Our attorneys are knowledgeable of the insurance plan document that covers your group disability claim. We have a deep understanding of various plans’ terms and language. Just as important, we have experience in understanding how the courts have interpreted those policy terms and will apply that to your situation. Understanding your plan’s language and terms are crucial to winning your claim. Attempting to handle this yourself may do irreparable harm to your case.
We are well-versed in assembling evidence. Putting together the evidence you need to prove your claim is the most important aspect of your case. Many claimants think that if they submit their medical records or a note from their doctor stating that cannot work, that is all the insurance company needs.
Far from it. Proving you cannot work requires much more documentation and even additional steps, such as opinions from your doctors, supplemented by expert opinions from vocational experts, or documentation from special tests to support evidence of disability that you have never considered. Our attorneys will help you arrange and compile the right evidence to develop a strong, winnable claim.
We know the tactics the insurance companies use to delay and deny valid claims. Insurers know how to use ERISA preemption to their advantage. For example,
- an insurance company can often twist the Plan’s terms and wording in a way that supports claim denial and hurts your chance of approval;
- the insurer might look at your medical records and selectively use bits of information that helps them, suppressing evidence that supports your claim;
- the insurer might hire an investigator to surveil you with a video camera, producing a spliced and edited film that makes you appear to be anything but disabled.
We’ll Answer Your Questions in a Free Case Evaluation
Our disability attorneys focus on ERISA law and group long term disability denials. As your attorneys, we give you the leverage and ability you need, in and out of the courtroom, to stand up to the insurance company.
Consult with us and learn the next steps to make sure you get what you’re entitled to.