The Employment Retirement Investment Security Act (ERISA), protects employee benefit plan participants and their beneficiaries. The legislation provides pension and insurance companies with guidelines on how to administer employee benefit plans, including disability and health plans. ERISA applies to all private employers with 20 or more employees, although it does not pertain to federal or state government plans, or plans provided by churches for their employees.
While the ERISA disability claims process may seem straightforward, as we walk through the process, you’ll see how mistakes in the initial claim and appeal, as well as a federal lawsuit, can prevent any recovery in the future. First, we’ll describe the initial claim and appeals process, then we’ll discuss the most common pitfalls encountered in ERISA disability litigation.
ERISA requires employers to provide their employees with information about their disability plan benefits, including a detailed explanation of what is and what is not covered under the plan; directions on how to file a claim; and an outline of the appeal process if a claim is denied.
When an employee files a disability claim, ERISA determines the time limits for an insurance provider to resolve the claim. Generally, an insurance provider must approve or deny the claim within 45 days of filing, which the provider may extend by 30 days if they notify the employee. If the claim is denied, the provider must explain the reason for the denial in writing. ERISA then sets the time limits for the employee to appeal a claim and another deadline for the provider to decide the initial appeal.
If the disability insurance provider denies the initial appeal, the employee may then file suit in federal court under ERISA. This lawsuit essentially becomes an administrative law hearing where the federal judge will once again review the information presented in the initial claim and the initial appeal. This brings us to our first glaring mistake.
Once you have exhausted your administrative appeal and filed suit in federal court, the judge will only consider information and evidence that was in the record for your initial claim and for your appeal. If you’ve failed to submit all medical evidence of your disability during the initial claim or appeal, the judge will not consider any additional information in federal court.
Whether at the initial claim or appeal stage, your doctor’s opinion and your medical records are critical to a disability claim. Let your doctor know that you’re considering filing a disability claim and ensure that all relevant medical information is contained in your records. Your insurance company will obtain your records and send your physician paperwork to fill out, but you do not want to rely solely on the insurance-provided paperwork to support your disability claim.
If you file suit in federal court after the denial of an appeal, the standard of review can also be stacked against applicants. While there are two standards of review in federal ERISA claims, the standard is determined by the language of your disability plan. The judge will generally review all the evidence of the administrative record de novo, meaning without any deference to the decision of the plan administrator. Or, if the policy unambiguously grants the claim administrator discretion to determine the claimant’s eligibility under the policy, a judge may apply the “abuse of discretion” standard. Under this standard of review, the judge will grant deference to the decision of the plan administrator absent a conflict of interest or some other compelling reason.
In some states such as California, this standard may no longer be applicable for newer policies, but it’s important to consult an ERISA disability attorney about current law in your state. It’s also crucial to consult an attorney as soon as your initial disability claim is denied and before you file your appeal. You only have 180 days after the denial to file your appeal, and it’s important to ensure that you’ve submitted all possible medical information that could bolster your appeal.
In some cases, employees assume that they can rely on the disability determinations of their employer. If an employer says that you’re too sick or injured to work, then you should be entitled to disability benefits, right? Wrong. Your disability insurance provider, not your employer, will determine whether or not you meet the definition of disabled under the terms of your disability insurance policy. You must have additional, objective medical evidence to bolster your disability claim.
Similarly, don’t rely on your employer’s human resources department to interpret your disability insurance policy. While they may intend to be helpful, they aren’t trained in interpreting insurance contracts. If you have questions and concerns, take your policy to an experienced ERISA disability attorney before filing your initial claim.
When you receive long-term disability insurance, your insurance provider may require you to also file for Social Security disability benefits. In some cases, disability insurance providers will even provide you with one of their attorneys to help you with the SSDI application process. Beware of accepting assistance from your insurance provider’s attorneys. They owe a fiduciary duty to their employer – the insurance company – and may not act in your best interests if it conflicts with the best interests of their employer. There have been cases where insurance company attorneys have directed employees to choose certain disabilities on the Social Security benefit application that later made it more difficult for the applicant to prove their long-term ERISA disability claim.
The ERISA claims, appeals, and litigation processes are complicated and attention to every detail is important. Therefore, it’s important to hire an attorney who is well versed in ERISA disability claims and is intimately familiar with the procedural and evidentiary issues you will encounter. Hiring an attorney with little to no experience in ERISA claims or administrative appeals could result in avoidable mistakes that can result in dismissal of your case.
To find out if you believe you’ve been wrongly denied disability benefits under ERISA, please call our toll-free number 844.UNDERWOOD (844.863.3796) or send us an email to arrange your free consultation with our lawyers. Se habla español.
The Underwood Law Office in McKinney, Texas serves all of Dallas and Fort Worth, including Plano, Frisco, Allen and McKinney. Our Huntington, West Virginia attorney office serves all of West Virginia.