You may have noticed ERISA referenced in your denial letter or disability policy, but do you know what it means for your Long-Term Disability claim?
ERISA is short for Employee Retirement Income Security Act of 1974. ERISA is an extremely complex federal law that was established to regulate and set minimum standards for voluntary group employee benefits plans. ERISA was originally designed to protect plan participants and streamline the claims process. Sadly, it is universally accepted that ERISA has actually had the opposite effect. In practice, ERISA regularly insulates insurance companies from liability and allows them to act in bad faith without fear of facing extra-contractual damages.
The insurance company is generally immune from punitive or extra-contractual damages in an ERISA case. ERISA prevents a claimant from pursuing virtually any damages other than the benefits the insurance company already owes the claimant under the policy. Among other things, ERISA also generally:
1) Limits discovery;
2) Disallows jury trials;
3) Prevents claimants from submitting evidence after the internal appeal process has ended;
4) Allows the insurance company to obtain a preferential standard of review from the courts;
5) Prolongs claim administration; and
6) Places strict and often confusing requirements on claimants that must be followed.
Simply put, ERISA completely changes the legal battlefield and gives the insurance company the high ground. If you obtained your disability insurance through your employer, your claim is most likely governed by ERISA. There are exceptions, however, such as “safe harbor” plans and certain plans established for the benefit of governmental and church employees.
If you would like to discuss your ERISA claim or are unsure whether your claim is even governed by ERISA, you can contact the long-term disability insurance lawyers at Abell & Capitan Law for a free consultation. We have extensive experience handling ERISA claims, and we know how these insurance companies operate. We can protect your rights, fight back against unscrupulous claims adjusters, and maximize your chances of recovery.