Healthcare, pensions, retirement accounts and disability insurance are important to employees and their families. Many workers take these benefits into account when they decide what company they want to work for. Many of these benefits are protected by federal law that protects employees and makes sure companies do not wrongfully withhold benefits. However, some insurance companies and corporations still try and deny benefits to their employees, in violation of federal law. Employees are often required to take the companies to court to seek compensation and reinstatement of their rightfully-earned benefits.
What is ERISA?
ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is a federal law that sets the minimum standards for most private pension and healthcare plans, including plans for short-term and long-term disability.
ERISA covers most private, voluntary disability benefits plans. Similar plans offered to government employees or church workers are generally not covered by ERISA. Disability coverage purchased by the individual employee is also not generally covered by ERISA.
Under ERISA, employees with disability insurance plans should be provided basic information about their plan through a summary plan description (SPD) or summary of benefits and coverage (SBC). This provides the employee with information on what benefits are offered, how to file a claim, how to appeal a claim, and the employee's right to seek a legal claim.
Denial of Disability Benefits
After filing a claim for short- or long-term disability, the plan administrator has to decide the claim within a reasonable time not longer than 45 days. The insurance company can seek an additional extension for an additional 30 days. If the insurance company denies the claim, the employee has 180 days to file an appeal.
Before filing an appeal, it may be recommended that the claimant contacts an attorney to review their claim. Winning an appeal is much simpler, faster, and more cost-effective that losing an appeal and filing a lawsuit. An experienced ERISA disability attorney can identify possible red flags in the claim, supplement the record to support the disability claim, and reduce the chance of denial.
After appeal, the insurance company has 45 days to respond, plus an additional 45-day extension in special circumstances. Generally, the claimant must go through the insurance company's claims and appeals process before they can file a lawsuit in court to challenged a denial of their benefits. However, in situations where the plan's claims procedures are inconsistent with ERISA rules, the claimant may be able to file a lawsuit before exhausting the plan's procedures.
ERISA Litigation
ERISA litigation refers to the process of taking legal action involving a pension, disability, or health benefit plan governed by ERISA. Most ERISA litigation is filed by an employee or former employee against their employer or insurance company. A significant portion of this ERISA litigation involves disputes over disability benefits.
Generally, employees have been denied short-term or long-term disability benefits by their insurance company. They may file an appeal, only to hear that their appeal has been denied. Their next course of action would be to contact an ERISA disability attorney to claim benefits. The attorney may then file a federal lawsuit against the plan provider for benefits or to have their benefits reinstated.
While many people think of litigation as a trial before a judge and jury, the majority of litigation cases are settled before they ever get to court. Going through a trial can be a lengthy and costly process, which is why a settlement can be beneficial to all parties. In settling a lawsuit, it is important to understand that the client ultimately gets to decide whether or not they want to accept an offer.
ERISA Litigation Process
After a claim is denied, the disabled claimant should consider contacting an experienced ERISA disability attorney as soon as possible. There are deadlines surrounding legal claims, and failing to file in time could leave the disabled individual without any recourse. Time will also give your attorney time to gather all the relevant records and evidence to support the complaint.
Most employer-provided disability claims are handled in federal court. Under ERISA, federal laws relating to employee benefit plans preempt most state laws. There may be exceptions when state law mandates disability coverage. This means the cases will generally be filed in federal court and heard before a federal judge.
At any point during litigation, the parties may be able to settle the case. Settlement becomes more likely the closer it reaches a trial date. When a lawsuit is filed, the insurance company will evaluate the legal claim and try to determine the likely outcome. They may negotiate with your attorney to try and come to a mutually agreeable settlement that will allow the individual to receive benefits more quickly and avoid the stress and unpredictability of a trial.
If the case goes to court, a federal district judge will make a decision after a bench trial or upon submission of legal briefs. A bench trial is a trial before a judge rather than a jury. The judge may issue a decision in favor of the claimant or the insurance company, or in some cases, the judge will send the claim back to the insurance company to reevaluate. If the claimant loses the court case, they may still be able to file an appeal.
As soon as you encounter any resistance from an employer or insurance company regarding your disability claim, you may want to contact an attorney. An ERISA disability benefits attorney can increase the likelihood that your initial claim will be granted, or your appeal will be approved. If your insurance company still denies your disability claim, your attorney can file a legal claim to restore disability benefits, including back benefits, interest, and legal costs and fees.
ERISA and Disability Benefits Attorney
Greg Paul has 18 years of experience fighting for long-term disability benefits against the insurance companies. We represent individuals and families who have been denied benefits by their insurance company or plan administrator. You have a limited time to appeal your disability denial, so do not delay. If you have been denied short-term or long-term disability benefits, contact our office for a free consultation.