ERISA is a federal law that stands for the “Employee Retirement Income Security Act.” ERISA is a body of law that governs many types of employee benefits, including group long-term disability insurance policies of private employers.
There are several different types of long-term disability insurance policies, but not all of these policies are governed by ERISA. For example, if you purchased a long-term disability policy on your own (not as part of a group provided by your employer), then it often is not governed by ERISA. In addition, long-term disability policies for public employees (such as school teachers, law enforcement officers, firefighters, etc.) are usually not covered by ERISA.
However, if you work for a company (especially a larger private employers), their policies are almost always governed by ERISA. Finding out if your disability policy is governed by ERISA is important for many reasons.
Why Does ERISA Matter to My Claim?
There are a number of reasons that ERISA matters. To illustrate the point, here's what happens if your disability claim is governed by a Non-ERISA policy.
In a NON-ERISA policy claim, the insurance policy is the definitive document. There are no special statutory rules outside the policy that impact your claim.
In a practical sense, this means:
- You need to read your policy and do everything it says to file an appeal.
- Most likely, you will get 45 (or 90) days to appeal but sometimes one isn't even contemplated.
- There are often no deadlines or timelines for the insurance company's review.
- There are little to no rules controlling how the insurance company must review your appeal.
- If you lose your appeal, you can often file suit in your local court and request a trial by jury.
- You can do "discovery" in court, which means your attorney can request documents, submit written questions and even conduct depositions (live interviews) with the insurance company to unconver evidence that may support the reverse of your benefits denial.
Most significantly, a non-ERISA disability case is analyzed under standard “contract law” rules, which means "did the insurance company violate the policy by not paying you benefits?"
In an ERISA policy, you are bound by very specific federal rules about your claim. However, these rules largely benefit the insurance company, and the complexity of these rules can make it nearly impossible for an average consumer to succeed in overturning a decision to deny benefits.
For instance, below is the typical process for an ERISA-covered long-term disability claim:
- You should receive a detailed denial setting out the reasons for the denial of benefits.
- You are given 180 days (this is a strict deadline) to appeal the denial (we strongly recommend you hire an attorney who is experienced in long-term disability cases).
- The insurer has 45 days to review your appeal, and they usually can get an additional 45-day extension.
- If you lose your appeal, you may file suit in federal district court but a judge (not a jury) will hear your case.
- Your case is determined by legal briefs submitted by both sides and the insurance company records. You do not get to testify or have live witnesses. The judge only looks at the record submitted on your appeal prior to filing the suit.
- The judge must give the insurance company deference and discretion in reviewing the denial. It will only be overturned if the insurer’s decision was unreasonable (also known as "arbitrary and capricious") given the information it had at that time.
There's a lot of case law that interprets and expands the rules contained in ERISA. These cases can be really important, especially if they describe circumstances or facts similar to your case.
What Should You Do?
Here's what all this means -- Non-ERISA claims are different than claims governed by ERISA. Not all lawyers handle both types of claims. In fact, very few lawyers handle claims governed by ERISA because the rules are so complex, and the cases can be difficult to win.
What should you do? Ask an attorney who is experienced in ERISA and non-ERISA disability claims to review your denial letter. Our long-term disability attorney in Kansas City will review your denial letter for FREE, and there is no obligation to hire our firm. We help individuals identify what kind of policy is at issue and can answer questions and provide guidance on next steps to consider so you protect your right to appeal.
If you have questions about long-term disability cases, call our Kansas City long-term disability law firm today at 816-203-0143, or fill out the form below. We'd be happy to help!