ERISA: Long/Short Term Disability Benefits - FAQ
Q: What is ERISA?
A:The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for group benefits provided by most private employers to provide protection for individuals in these plans. Ironically, ERISA was not originally designed to control medical or disability insurance plans, the phrase in the act “employee welfare benefit plan,” has been subsequently interpreted by Federal courts to allow ERISA control over nearly all private employee benefits, including health, disability, life and pension plans.
Q: How long does the insurance company have to make a decision on my long term disability case?
A: In general, under an ERISA plan, the carrier will make an initial decision within 45 days of your initial application. The time for decision may be extended for two additional 30-day periods. Upon appeal of a denied or terminated claim, the insurance carrier will make a decision within 45 days of the appeal, which may be extended for an additional 45 days, provided that, prior to any extension period, the insurance carrier notifies you in writing that an extension is necessary due to matters beyond its control, identifies those matters, and give the date by which it expects to render its decision.
Q: My Doctor say I’m totally disabled and my employer won’t let me return to work. Can the insurance carrier still deny my benefits?
A: Yes. Most disability plans reserve discretion to the insurance carrier to interpret the plan. Courts have held it reasonable for them to interpret the policy to require objective evidence of injury or illness, e.g., an MRI report as well as objective evidence of functional impairment e.g., functional capacity evaluation. Therefore, your physician’s conclusory statement alone will not be enough to establish total disability.
Q: What information do I need to prove that I’m disabled?
A: Documentation. A doctor’s note merely stating totally disabled and unable to work is not enough. Your doctor’s report must not only include your symptoms, limitations and diagnoses, but must also include objective evidence of your diagnosis and objective evidence of your limitations.
Q: How are my benefits calculated?
A: The calculation of your benefits is governed by your policy. In general, unless your policy calls for a flat payment amount, your benefit will be based on a percentage of your income. The relevant period, however, varies from the income immediately preceding your date of disability to wages earned as stated on your tax return the preceding year before your injury.
Q: Is there an offset against my disability benefits?
A: In general, most group disability policies offset income you make from other sources such as Social Security Disability Insurance, pension, and IRA. Some policies even allow offset for monies paid to your dependents as a result of your disability.
Q: What happens if my LTD claim is denied?
A: If you are denied under your LTD insurance plan, by either your employer or the insurance carrier, you are normally given 180 days to appeal the denial under ERISA. It is vital not to miss the deadline given in your appeal letter otherwise you could conceivable loose your right to take legal action over the benefit denial.
Q: When is it too late to submit new evidence?
A: There are certain deadlines in which you must submit medical records or other evidence of your disability. Otherwise, you will be barred from presenting them at trial. In general the administrative records “close” at the conclusion of your appeal. That means all the evidence that you would like the court to consider must be presented to the insurance carrier before the administrative record is closed.
Q: How can a Lawyer help me in my claim?
A: An experienced lawyer can help protect your rights under your disability policy. The lawyer can help you understand what is required under your policy. They can help you gather and present evidence that you will want the insurer (or, later, the judge) to look at in deciding your claim. For example, you may need to undergo certain testing to objectively prove your limitations or use creative means of presenting evidence of your disability to the insurer, such as a videotape of your limitations.
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