New regulations will now govern the ERISA disability claims and their appeals proceedings. These regulations will take effect on all disability claims that will be filed in 2018 - starting from the very first day of January.
The Employee Retirement Income Security Act (ERISA) has been a headache for many people who have been hurt on the job since it was passed by U.S. Congress in 1974. Before the law was passed, many employees would try to file long-term disability claims from companies who promised them rock solid insurance policies and benefits, only to find out the company that owed them money was bankrupt or out of business.
Some insurance companies offer lifetime disability benefits. They usually come at an additional fee (or premium) and are attached to the policy as an "endorsement" or "rider" to the policy. But not all lifetime coverage is created equal. Some policies - usually those that were issued in the 1980's or 1990's - merely continue your benefits for life without any restrictions or limitations. Benefits under these policies can even increase over time pursuant to a Cost of Living Adjustment (COLA) provision. These policies offer the broadest possible coverage. Other policies are not so generous. Their coverage may be contingent on when you become disabled or the type of disability that you are suffering from. For instance, some policies provide reduced benefits if you are disabled after age 60. Others provide for reduced benefits if you are disabled as a result of a sickness rather than an injury. The point: it pays to read your policy and know your rights.
Many workers will have their disability insurance policies governed by ERISA. ERISA is extremely complicated and there are several things that must be done in order for the claims to be approved. Frequently, these claims are denied, leaving workers in a terrible position. This posting discusses some of the things that you should do to ensure that you are taking the appropriate steps with your ERISA disability coverage claim.
When you're a worker for a company who has offered you disability insurance, you may not be aware of ERISA, or the Employee Retirement Income Security Act. Why would a retirement act impact your disability claim? And how could it possibly cause a denial of that claim? You need to know how the insurance system works so that you can recover from an ERISA disability claim denial.
Most of us are covered by disability policies through our employers. Premiums are paid by payroll deductions and coverage is described in a summary plan description. Those policies (subject to a few exceptions discussed below), are governed by federal law, specifically, the Employee Retirement Income Security Act of 1974 ("ERISA"). These laws provide strict requirements for appealing a claim denial, as well as limited remedies for those whose disability benefits are wrongfully cutoff by their insurance carrier. No matter how misguided an insurer's decision is, the only remedy for insureds under ERISA is (1) the payment of past disability benefits owed by the carrier and (2) the possible recovery of attorneys' fees. In most circumstances, nothing else is recoverable.
You did everything right: you promptly submitted your claim to the insurance company, dutifully documented the facts surrounding your claim, obtained supporting evidence, completed all the insurance company's forms, and were always responsive to the insurer's claim handlers. Yet you just received a letter from the insurer notifying you that your claim is denied. That letter probably contains a notice that you "may" appeal the denial by submitting an appeal to the insurer. But why should you go to the effort of preparing an appeal to a company that's already indicated a bias toward your claim? It seems counterintuitive. Besides, the insurance company says you "may" appeal, doesn't that mean it's not mandatory?