ERISA Long Term Disability Claims Are Different
If you've done any research about your long term disability (LTD) claim or appeal, you may have come across the term "ERISA". ERISA is a federal law that governs disability claims that are issued in a group policy by your employer. ERISA stands for the Employee Retirement Income Security Act.
ERISA was passed by Congress in 1974. It was originally introduced as a law that would protect employee's pension funds, but it was later amended to govern all employee benefits. As with many laws, it was largely written by special interest groups, the lawyers and lobbyists for the insurance industry. It shouldn’t surprise you that ERISA largely favors insurance companies. ERISA makes it very difficult for claimants like you to get the benefits you deserve.
There are many things you need to know about ERISA, but below are 5 ways LTD appeals are dangerously different from other types of legal claims:
1. A denial gets the benefit of the doubt.
Even if the insurance company is flat-out wrong about its denial, you still may lose your appeal. It’s crazy but true. To win your appeal, you must prove that the denial was not just wrong but that it was unreasonable.
This standard of review is called "abuse of discretion." ERISA and most policies give the insurance company discretion to deny benefits. To win, you must prove that the insurance company abused this discretion.
This is a different standard than most legal cases. In most cases, the standard of review is used is the “preponderance of evidence." Preponderance of evidence means you win if you provide you are right by 51% of the evidence. In ERISA, the bar is much higher. You must actually show that no reasonable person would accept what the insurance company did because it abused its discretion in denying your benefits.
2. No jury trials, no witnesses and no evidence other than the claims and appeal file.
This means the judge makes a ruling based on the documents submitted with the appeal and you can't submit anything new in the lawsuit phase. If you don't submit sufficient medical records, doctor's opinions, or any other evidence as part of your appeal, you cannot supplement and submit it later on.
Of course, the insurance company knows this and will stack the record in its favor. The implication is you have no chance of winning the lawsuit unless do everything right in the appeal.
3. No "discovery."
Discovery is the phase of a lawsuit where you are able to request the defendant answer written questions or answer oral questions (in a deposition) under oath. Discovery is important for a plaintiff like you because it allows you to get access to all the information and evidence you need to win your case. No discovery means the insurance company can hide the "smoking gun" and you are stuck with what’s in your claims file.
4. No “bad faith” penalties.
If the insurance company loses, what’s the worst-case scenario? The insurance company simply has to pay you the benefits they owe you. This means that there are no disincentives for the insurance company to wrongfully deny claims.
This is different from other insurance disputes where an insurance company may be held liable for “bad faith” damages and penalties for wrongfully denying a claim. Under ERISA, they just pay you what they owed you in the first place.
5. Very short deadlines.
The deadline for filing an ERISA appeal is usually 180 days from the date you received your denial letter, but it can be even shorter. This is much shorter than the deadlines for most other legal claims. If you don’t file an appeal on time, your right to file a lawsuit or recover your benefits will be barred.
Contact Our Kansas City Long Term Disability Lawyer
The process for appealing denials of both long and short-term disability claims complicated and full of traps for the unwary. One mistake can really hurt your chances of success, and in most policies, you have only one appeal to get it right.
If you have questions or need help with a long term disability appeal, please contact our office at 816-203-0143. If you have filed a LTD claim and received a denial letter, please contact our office as soon as possible. We'd be happy to review your denial letter for free and provide guidance on next steps to consider.
You can also download our free guide to long-term disability appeals, Danger: Proceed At Your Own Risk, which is packed with helpful information to get you back on claim. Whatever you do, don' t wait as strict deadlines apply to these claims and appeals.