ERISA 101: What It Is, How it Works, and How it Affects Long Term Disability Claims

ERISA stands for the Employee Retirement Income Security Act of 1974. This federal law was enacted to set minimum standards for employee group benefits, including retirement, health, life, and disability benefits. Because most people receive private disability insurance coverage through their employer-sponsored benefit plan, ERISA governs most private long term disability benefits.

Claims Exempt from ERISA

ERISA does not cover individually purchased private disability policies. ERISA also does not cover employee benefit plans offered through public or church employers. Employees of public schools, including state universities such as Indiana University or Purdue University, are typically exempt from ERISA. Employees of church-owned hospitals or universities are also generally exempt from ERISA.

ERISA Has Many Effects on Long Term Disability Claims

For all other employees of private companies, ERISA will probably apply to their long term disability claims. ERISA has a tremendous affect on long term disability claims. ERISA is a complex and lengthy federal statute, and the following list is not exhaustive. However, consider the following ways that ERISA can affect your long term disability claim:

  • After benefits are denied or terminated, ERISA requires that the plan must provide claimants, on request and free of charge, copies of documents, records, and other information relevant to the claim for benefits.
  • After an adverse decision, the claimant must be allowed an appeal process. According to ERISA regulations, the claimant will be allowed at least 180 days to file an appeal.
  • Filing a timely appeal is absolutely critical to the success of a disability claim under ERISA. If a claimant fails to appeal within time, they forfeit rights to their disability claim and will not be able to later appeal or file a lawsuit. Essentially, the claim dies once the appeal deadline is missed.
  • The disability plan must make an appeal determination no later than 45 days after the written appeal is received. If the plan determines special circumstances exist and an extension is needed, the plan may take up to an additional 45 days to decide the appeal. If such special circumstances exist, then the plan must notify the claimant in writing that more time is needed to make an appeal determination. After a total of 90 days, the plan must make an appeal determination.
  • Be aware that some plans require two appeals. ERISA allows plans to mandate two appeal stages, but ERISA also specifically states that plans cannot require a claimant to file more than two appeals prior to bringing a civil action.
  • After the appeal process is exhausted, a claimant may file a lawsuit under section 502(a) of ERISA. Ordinarily, it is not until the appeal process is exhausted that a claimant can file a lawsuit. The lawsuit must be filed timely in accordance with deadlines described in the plan documents.
  • Because the claim is governed by ERISA, a federal statute, a lawsuit must be filed in federal court. ERISA preempts state law claims meaning that disability claims governed by ERISA cannot seek bad faith damages or pain and suffering damages.
  • A federal court’s review of an ERISA disability claim will ordinarily be limited to the evidence available to the disability plan at the time that their final determination was made. This is an extremely important point to consider when filing an appeal. All supportive evidence of a disability must be submitted to the plan during the appeal process, or else this evidence will not be considered in a lawsuit.
  • Limited discovery may be allowed in certain ERISA claims. When a conflict of interest applies – such as when the entity that administers the plan both determines 1) whether an employee is eligible for benefits and 2) pays benefits out of its own pocket – additional discovery may be allowed to weigh the conflict of interest. See 2008 U.S. Supreme Court case MetLife v. Glenn.
  • Unfortunately, there is an absence of law that affords ERISA claimants the right to a jury trial.

Contact an Indiana Long Term Disability Attorney Today

If your long term disability claim has been denied, we may be able to help you receive long term disability benefits that you deserve. Fill out our free contact form or call us at 1-800-253-5537 for a consultation with one of our experienced Indianapolis disability attorneys.

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