ERISA Law

Does ERISA Govern How Employers Must Handle All Employee Benefits, From The Frontline Workers All The Way Up To CEOs?

ERISA provides a uniform minimum standard to ensure that employee benefit plans are established and maintained in a fair and financially-sound manner. While ERISA does not require an employer to provide a benefit plan, if an employer chooses to do so, they have an obligation to provide promised benefits and satisfy ERISA requirements for managing and administering the plan. This applies to how they handle all employee benefits from the frontline worker all the way up to the CEO.

Is Private Individual Disability Insurance Purchased Outside Of An Employer’s Group Plan Subject To ERISA?

ERISA applies to group-sponsored benefits and is regulated by federal law. Disability insurance purchased outside of an employer’s group plan is subject to the laws of the state in which it was purchased.

Does An Employee Have To Qualify For ERISA?

ERISA is a law governing employer-sponsored benefits. Whether someone qualifies for an employer’s welfare benefit plan depends on how the plan is designed. For example, some employers have automatic enrollment upon hire without evidence of insurability. Some have an open enrollment period during which you can enroll but must without having to provide evidence of insurability; if that enrollment period deadline is missed, then evidence of insurability will be necessary.

Are All Disability Plans Subject To ERISA Law?

ERISA applies to private sector employee benefit plans, but does not apply to government plans, church plans, or disability insurance law. Therefore, not all disability plans are subject to ERISA.

Is There A Waiting Period Between The Time You Become Disabled And The Time You Become Eligible To Receive Long-Term Disability Benefits?

The waiting period between the time you become disabled and the time you become eligible to receive long-term disability benefits is referred to as the elimination period, which lasts 90 to 180 days depending on the terms of the policy.

Why Does Your Long-Term Disability Policy’s Precise Definition Of Disability Make Such A Big Difference In Your Case?

ERISA does not provide a uniformed definition of disability. Rather, the definition of disability is determined by the terms of your benefit plan or insurance policy. Some policies define disability as the inability to perform your occupation. This means that if you cannot perform your own occupation and you meet other criteria under the policy, then you will get paid.

Other policies define disability as the inability to perform any gainful occupation, which means that as long as you are able to perform some other occupation—regardless of the wages—then your claim is going to be denied. Knowing how your policy defines disability is crucial in knowing what you have to prove in order to get paid.

What Information Should I Share With My Doctor If I Plan To File A Disability Claim?

First and foremost, your doctor needs to know how your impairment is affecting your ability to function—not just at home, but also at work. If this is an own-occupation claim (which is likely the case), then your doctor needs to understand the nature of your work, the physical and mental demands required for your work, and what aspects of the work you’re unable to perform or having difficulty performing. You might even want to bring a copy of your job description with you to discuss the aspect you are having trouble performing.

How Much Does My Doctor’s Opinion And My Medical Records Impact The Decision Of My Long-Term Disability Claim?

Your physician’s opinion carries great weight, although it’s not controlling in the disability insurance claim. If your doctor’s opinion is not in your favor, the insurance company will definitely latch on to that as a basis for denying your claim. It is crucial to know what is in your medical record before you file, because there may be things that you reported to your doctor but that were not written down, or your physician may have an opinion of which you are unaware. By reviewing medical records prior to submitting the claim, you can discuss potential issues with the physician before they negatively affect the case.

Who Actually Decides Whether You’re Approved Or Denied A Settlement?

The claims adjuster under the terms of the policy has the discretion to make the determination of who is disabled and who is not. They also decide how much to pay to settle your case. The Judge does not have the power to order a settlement in an ERISA case. The Judge cannot order them to pay you a settlement; neither can they order you to accept one. The only way an ERISA case settles is if both parties want to settle and both can agree an amount to settle.

Why Are Group Disability Policies So Difficult To Fight When Denied Or Terminated?

“Discretionary authority” makes it difficult to fight a denied or terminated ERISA claim. When Congress enacted this law, they allowed the plan-sponsor (which is usually the employer) to delegate the discretion to make the determination to the insurance carrier who provides the insurance coverage for these benefits. Over the years, the courts have taken the position that as long as the discretion is properly delegated to the insurance carrier to make the determination, the court will not overturn the decision unless the claimant can establish that the insurance carrier abused the discretion that they were granted. Since the burden of proof for showing an abuse of discretion is high, it can be difficult to fight denials and terminations.

What Investigative Methods Do Disability Insurance Companies Use To Deny Or Terminate Benefits?

In these days of electronic surveillance, disability insurance companies do not even have to leave their offices in order to conduct surveillance; they can simply go online and investigate Facebook pages to see what claimants are posting. They can also conduct old-fashioned investigations wherein they follow and take photographs of claimants. They may request that physicians’ complete questionnaires regarding a claimant’s ability or inability to function, and require that the claimant undergo an independent medical examination performed by a physician of the company’s choosing. I refer to these examinations as “defense medical exams” because they’re anything but independent.

My Employer, My Doctor, And I All Agree That I Cannot Return To Work; How Can The Insurance Company Still Refuse My Claim?

Where the employer’s benefit plan delegate discretion to the insurance carrier to determine disability, the employer’s opinion carries little weight. Likewise, while your physician can speak to the limitations caused by your impairment, his opinion on whether you can perform an occupation is not controlling. Disability evaluation is a combination of both medical and vocational factors taking into account your restrictions and limitations, age, education and prior work experience. Also, a claim can be denied or terminated based on your ability to perform some other type of work, even if it is not the type of work you were performing for your employer.

Is It True That Under ERISA, A Claimant With A Denied Or Terminated Claim Must Exhaust Administrative Appeals Before It Can Be Brought To The Court System?

Most policies contain a provision which dictates the actions to take if your claim has been denied. These policies will tell you to file an appeal; some policies require two levels of appeal. Appeals are made directly to, and decided by the same insurance company that already denied the claim. There are some short-term policies where the appeal is to a group of the employer. These appeals are referred to as your administrative remedies. If you fail to follow those guidelines or complete the appeal within a timely manner (usually about 180 days), then the court will dismiss your case on the basis of you having failed to exhaust your administrative remedies before coming to the court. By filing suits prematurely, you may have then missed your timeline within which you needed to file the appeal, which could be the death knell to your claim.

What Mistakes Can Lead To A Denial Or Termination Of Disability Benefits?

There are several mistakes that can lead to a denial or termination of disability benefits. One of the biggest mistakes is failing to obtain the disability insurance policy; the policy is the roadmap that tells you what you are required to do and what the insurance company can and cannot do.

Another mistake is failing to get the claim filed. The file contains all the information the insurance carrier used or obtained in deciding your claim and you are entitled to get it free of charge. Sometimes, when a person’s claim is denied or terminated, they will quickly write a letter to the insurance company that says, “I appeal,” but fail to supply anything to combat the argument that the insurance company has made. It is important to sit back, take a breath, consider the reason for the denial or termination, and then obtain the necessary evidence for rebutting the reason for the denial or termination. Most of the time, this requires obtaining the claim file from the insurance company so you can see all the evidence they had, or did not have, when they decided your case.

Is ERISA Litigation Only Handled In Federal Court?

ERISA litigation is a federal law, which means ERISA litigation is only handled in federal court. If an ERISA case is filed in state court, the opposing attorney or the state court on its own motion will initiate a removal procedure to move the case to federal court.

How Can You, A Long-term Disability Attorney, Help Me Navigate The Federal Court System?

I can guide you through the administrative appeals process, which is the most important part of your claim because it is the last opportunity to obtain the evidence that you want the court to review. Upon the conclusion of your appeal, the record will be closed, which means you cannot add new evidence.

If your insurance company was granted discretion to make determination on your claim, once your complaint is filed, the court’s function is to review your claim in light of the insurance company. In other words, the court will look at the information that the insurance company had at the time they made their decision, and consider whether the insurance company abused the discretion they were granted based on that information.

Once the case gets to federal court, new evidence cannot be added to the file and new witnesses cannot be called to testify. It is crucial that the court has all of the pertinent information before the appeal is closed. My role is to discover any an abuse of discretion or procedural irregularities that may have occurred in the claims or appeals process. Once you get to court, the case is usually decided based on a summary judgment, which is where the attorneys will provide their memos of law (referred to as “briefs”) to the court who will make a determination based on the records and the law.

Is There Anything That Is Critical For People To Know Right Now With Regard To How The Courts Are Handling Disability Claims and ERISA Cases?

We are living in a critical time right now, but the statute of limitations has not stopped. This means that if you have a certain deadline to file your suit, you need to adhere to that deadline. One of the biggest issues for clients right now has to do with continuing treatment due to the fact that many doctor’s offices are closed and there is a general fear of leaving home. However, without ongoing treatment, it’s difficult for a person to establish that they have remained disabled. This remains an issue that we are currently trying to navigate. Many providers are offering Telehealth services. You might want to check with your provider to see if that is an option for you.

For more information on ERISA Law, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (352) 577-7746 today.