This page provides general information about Long Term Disability Insurance and ERISA. If you have specific questions about your case, call me at 877-626-3501 or visit the Help Me Bill! page.
If you purchased disability insurance you probably did so thinking that if you became disabled you would file a claim much like any other insurance claim, and the benefits you received would offset the financial burden of not being able to work. Many people have learned through bitter experience, however, that disability insurance purchased through an employer is not at all like other forms of insurance.
Insurance purchased through an employer is governed by ERISA (the Employee Retirement Income Security Act). ERISA was enacted in 1974 to protect your retirement plan and employer-sponsored insurance benefits by forcing employers and insurers to behave responsibly with your assets and honor their commitments when you file a claim. Unfortunately, the law has been modified over the years in ways that favor the very people it was intended to keep in line.
If you file a claim and that claim is denied, you cannot just sue the insurance company as you might in other insurance disputes. Before filing a lawsuit, you must “exhaust administrative remedies” by appealing in writing to the insurance company – the same company that denied your claim in the first place! This appeal is known as an “internal appeal.” You have 180 days to appeal a denied claim, and insurers have up to 90 days to respond. By the time the internal appeal has concluded, nine months may have passed. Depending on when you filed your initial claim, you may have to survive a year or more without an income before you even get to court!
If your claim is been denied and that denial is affirmed – denied again – when you made the internal appeal, you can sue the insurance company in federal court. Even then your lawsuit is still governed by ERISA and does not amount to “your day in court,” because testimony is usually not allowed and your case will be decided by a judge alone, not a jury. Most importantly, you cannot present the judge with any evidence that wasn’t presented to the insurance company in the initial claim or the internal appeal. The judge’s decision will be based on briefings of attorneys who argue based on the evidence already in the claim file.
ERISA allows insurers wide discretion to administer their own policies. A denial can be only be overturned by a showing that the insurer abused that discretion or misinterpreted the medical evidence. This is why filing a good initial claim is so important and why having an experienced ERISA lawyer can make all the difference. To win an ERISA case, a lawyer must know how to build a case with medical evidence, must thoroughly understand how insurance policies are administered and must anticipate what tactics an insurance company may use to defeat your claim.