ERISA - Page 2

First things first – most people don’t have non-ERISA insurance policies. If you get your insurance from an employee benefit plan, you fall under the giant umbrella of ERISA and have to follow the guidelines outlined by that law.

Those of you who individually pay for your own insurance, though (freelancers, small business owners, and so on) are not governed by ERISA. Congratulations, because it’s a law that’s designed to protect the insurance companies at the expense of policyholders. By having your own individual plan, you’ve given yourself far more of an ability to stand up to your insurer and fight for your rights.

What’s the downside? Well, for one, it’s a lot harder to talk to you about what you need to do for your workers disability claim because every single state has different rules. There are a few general things that I can tell you, though, so read on to get a start, and then call me if you have more questions.

Most group disability policies provided by employers are regulated by a federal law, the Employee Retirement Income Security Act, known as ERISA. If you’re fighting an insurance company’s denial of your medical disability claim, you’re probably wondering what happens in court and whether ERISA law allows you to argue your case in front of a jury of your peers. After all, that’s what we see all the time on TV, right? The little guy was wronged by the big corporation and now the corporation has to answer for their crimes in front of a group of regular Americans. It’s how we assume the system works.

Unfortunately, in the case of ERISA claims, this is not true. One of the little-known provisions of the code prevents claimants from having a trial in front of a jury.

ERISA does allow for your legal fees to be paid, but that happens a lot more in theory than in practice. Why? Because the way the disability laws are written makes it very hard for anyone to get their attorney paid for – even if they win their claim!

What Does ERISA Say About Attorneys’ Fees?

The language in this part of the statute is yet another way that this law hurts policyholders. Not only is the decision about whether or not your fees are covered left to the judge’s discretion, he or she has the ability to decide on the amount you will receive as well. To put that in plain English, if you owe $5,000 in fees, the judge doesn’t have to tell your insurer to pay that. Instead, they can say that it’s fair for the insurance company to pay for half of that and make you cover the rest!

When most people approach me about litigating their ERISA medical disability claim, they don’t really understand how the case might work out. After all, you either win or you lose, right?

Not necessarily. In fact, there are actually four different potential outcomes that you might face if you decide to go this route.

Is Your Case Governed by Federal ERISA Law?

What is ERISA?

ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is a federal law that regulates the handling of Employee Benefit Plans and the remedies of the beneficiaries of these Plans. ERISA applies to all employees benefit plans established or maintained by an employer engaged in commerce or by an employee organization representing employees engaged in commerce. Practically all long term disability plans offered by a private employer are governed by ERISA. A claimant challenging a disability denial under an ERISA governed plan or policy must bring the claim pursuant to ERISA regulations and procedures. All state law remedies are preempted, meaning they do not apply to an ERISA claim.

What is ERISA and how does it apply to my long term disability insurance claim? ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is a federal law that regulates the handling of Employee Benefit Plans and the remedies of the beneficiaries of these Plans. ERISA applies to all employees benefit plans established or maintained by an employer engaged in commerce or by an employee organization representing employees engaged in commerce. Practically all long term disability plans offered by a private employer are governed by ERISA. A claimant challenging a disability denial under an ERISA governed plan or policy must bring the claim pursuant to ERISA regulations and procedures. All state law remedies are preempted, meaning they do not apply to an ERISA claim.