How Disability Income and ERISA Laws Affect You
A disabling injury or medical condition changes your life drastically. There is so much at stake when your claim for disability is denied. The reality is, many insurance companies resort to foul play to avoid paying benefits, and yet they are protected by ERISA laws.
ERISA Laws and Regulations
If you purchased a long term disability insurance policy through your employer, or your employer provides long term disability coverage as an employee benefit, then your disability policy is most likely governed by federal ERISA regulations.
ERISA – The Employee Retirement Income Security Act – governs your rights and requirements as the policyholder. When you file a claim for disability income and ERISA laws take over, your claim is suddenly subjected to very strict, very involved federal laws.
If your claim for benefits is denied, you are obligated to follow complex legal procedures and adhere to strict deadlines as you appeal your case.
Denied Disability Income and ERISA Appeals Process
With a denied claim, the fist step in fighting back is to file an administrative appeal. This is the most important part of the process, and tight timelines are in place. If adequate information is not submitted within the designated amount of time, you may not be allowed another chance to present further documentation as proof of your disability.
Most administrative appeals are denied by the insurance carrier. This is in the best interest of the insurer, since many claimants do not hire an ERISA lawyer to represent them, and most do not file a lawsuit.
Disability Income and ERISA – How Disability Income is Paid
After the appeal has been denied, you may file a lawsuit. One of the major drawbacks of ERISA is that, if you are successful, you are restricted on the amount of money you can win. You are limited to claiming a lump sum payout of the policy benefits, and interest on past due benefits. Depending on the circumstances, you may be compensated for a portion of the attorney fees.
Since you are only allowed to recover the money your insurance plan would have paid you for your disability in the first place, it is no surprise that insurance companies deny claims and then deny appeals. If they lose the lawsuit, they generally only have to pay what they would have owed as disability income had they not denied your claim.
Even when your insurance company denied your claim unfairly, ERISA regulations prevent you from exercising many rights and protections that are observed in non-ERISA disability claims. You may not sue your insurer for insurance bad faith, breach of contract, or punitive damages. You also are not allowed a jury trial, and in some cases, any kind of trial.
What Can You Do?
Just because your claim for benefits was denied, it does not mean that you do not have a legitimate, winnable case.
There are definite actions you can take. Your chances of winning your case are greatly increased when you have a veteran ERISA claim attorney representing you.
At Marc Whitehead & Associates, we have the knowledge, experience and resources required to litigate ERISA claims successfully.
Learn more about disability income and ERISA, and the ERISA appeals process.