Serving Pennsylvania & New Jersey
What exactly is ERISA?
ERISA is a comprehensive Federal statute and a very complicated area of the law. ERISA stands for the Employee Retirement Income Security Act of 1974 that was passed in response to a significant perceived problem, where employee benefits were subject to conflicting state laws, and that employee’s rights were not adequately protected by state laws. For example if your insurance was provided through your employer, claims for long-term disability benefits, life insurance or health insurance benefits are ERISA claims in most cases.
ERISA governed group insurance is short or long term disability insurance coverage provided by, or purchased through an employer. Disability coverage is provided by employers to cover their employees. When an employee is a covered beneficiary of a group insurance policy purchased by an employer, any claim for benefits pursuant to the policy is governed by ERISA (Employee Retirement Income Security Act).
How does ERISA apply to my claim?
ERISA limits the remedy of a claim in a benefits case to the benefits that should have been paid under the plan, possibly attorneys’ fees, but precludes other state law remedies, such as claims for bad faith failure to pay an insurance claim, or fraud, and ERISA precludes punitive damages or other state law remedies.
Before filing under ERISA, a claimant must first present all evidence to their short term or long term disability insurance company and exhaust all appeals of the insurance policies before filing a suit. ERISA has strictly enforced rules, requirements, and time deadlines which are well known by insurance companies, but not by most disabled claimants. A denied claimant has only 180 days to appeal a denied claim, and insurers have up to 90 days to consider the appeal. Before any federal lawsuit can be filed, a denied claimant must “exhaust all administrative remedies” by appealing in writing to the denying insurance carrier. Keep in mind that, during the entire time, you, as a claimant are without income from your job.
Once a suit is filed, a claimant usually may not submit more evidence to be considered. If ERISA applies, most claims should be filed in federal court (except for claims that are limited to claims for benefits over which state courts have concurrent jurisdiction. Since appeals are based upon medical evidence in the claims file, it is crucial that the claims file is stacked with compelling medical evidence both supporting the disability and refuting the insurance carrier’s basis for denying the claim. It is often very difficult – without experienced legal counsel – to prove that the insurance company wrongfully denied your claim.
What is an “employee benefit ERISA PLAN?”
A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise.
Most private sector health plans are covered by the Employee Retirement Income Security Act (ERISA). Among other things, ERISA provides protections for participants and beneficiaries in employee benefit plans (participant rights), including providing access to plan information. Also, those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct under the fiduciary responsibilities specified in the law.
Who is covered under a plan?
ERISA 3(7), 29 U.S.C. 1002(7) defines a “participant” as “any employee or former employee of an employer, … who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer …, or whose beneficiaries may be eligible to receive any such benefit.” An “Employee,” is defined as “any individual employed by an employer,” ERISA 3(6), 29 U.S.C. 1002(6). However, benefits provided by governmental entities are not ERISA “plans”, nor are Church plans unless the employer “opts in” to ERISA.
ERISA Claim Buyouts
ERISA insurers will typically not discuss a settlement of a disputed claim prior to the commencement of a lawsuit. Sometimes, on accepted claims in which the benefits are being paid, the insurer will have real interest in discussing a lump sum buyout. The value of a lump-sum buyout is very case specific and is decided by several factors including, age, mortality, monthly benefits and likelihood of returning to gainful employment.
When would Social Security Disability Insurance (SSDI) come into play?
Most ERISA disability policies require a disabled claimant to apply for SSDI benefits after a designated amount of time. Your specific plan rules would specify what that is. If, as a disabled claimant, you are awarded SSDI benefits, the insurance carrier usually is able to offset your monthly SSDI benefit from any amount they may owe the claimant. Under ERISA, the insurer is not compelled to pay benefits just because a disabled claimant was awarded SSDI benefits. Conversely, you may feel like the Social Security Administration is unfairly denying or ignoring your claim? The Social Security Administration has so many claims it may feel like social security is intentionally delaying your claim or that your case has been swallowed up in the system. The best way to fight for the benefits you deserve is to have a social security disability attorney on your side that will make sure Social Security is giving your case the attention it deserves.
If you are a claimant who has been turned down for disability benefits, or whose disability benefits have been terminated, we cannot stress enough how you need competent counsel, well versed in ERISA litigation to help you with your case. From the moment the insurance company has denied your claim, it is important to seek immediate legal help. It is virtually impossible to even attempt to individually weed through the endless maze of an insurance company’s “claim’s team”.