We handle cases involving disability insurance for both ERISA (employer provided) and non-ERISA (private policies) claims. The difference between these two broad mechanics is quite substantial, and each claim is unique. Non-ERISA claims are subject to different laws in each state, so it is important to seek legal help regardless. Even determining whether ERISA applies to a claim can be difficult in many cases, and insurers routinely take advantage of this uncertainty.
Disability Insurance Claims
Disability insurance provides a vital safety net for you and your family. You were smart enough to plan for the unexpected by purchasing disability insurance and providing a crucial financial safety net for yourself and your family. Whether you paid premiums for the policy from your own checking account or through payroll deduction at your job shouldn’t matter when it comes time to file your claim, but as we will explain, it does matter.
If you paid premiums on your disability policy through payroll deduction or purchased your disability insurance through your employer’s group disability policy, your claim may be governed by a little-known federal law: The Employee Retirement Income Security Act of 1974 or “ERISA.”. If ERISA applies to your claim it is not a good thing. ERISA was originally designed to protect employee benefits but over the course of over 40 years ERISA has become the law that protects insurance companies from having to pay a valid disability claim.
If you purchased your disability insurance outside of the workplace and paid the premiums directly from your own checking account, then your claim would likely be governed by state law which can provide a great benefit to you as you will soon see. When we talk about state law claims for disability benefits, we typically use the phrase “Bad Faith Claims” which is how lawyers and court’s reference the various state laws governing the wrongful denial of disability benefits. State law claims for disability benefits typically require an experienced attorney in order to get you what you should have been paid.
Disability Benefit Claim Denials: The Financial and Emotional Toll
Whether you were working in a plant making minimum wage or serving your community as a physician, when your disability benefits are denied there is a financial and emotional toll. Disability insurance is sold as a promise to make up for lost income when you’re no longer able to work. Regardless of your financial stability, losing that income stream from your occupation takes a substantial toll on you and your family’s financial ability to meet your obligations.
What is less obvious is the emotional toll that comes from a wrongful denial of disability benefits. From the very first meeting with our clients we begin addressing that emotional toll by explaining to you how the insurance company denied your benefits and what our investigation and experience with the insurance companies tells us about the denial of your disability benefits. When an insurance company denies disability benefits there is an implied suggestion that your claim is frivolous, and that you can return to work.
Understanding that the insurance company’s decision was simply a financial decision to save the insurance company money can blunt the impact of the insurance company’s suggestion that you’re simply lazy or somehow over exaggerating the impact of your medical condition. A lot of the disability benefit denials that we have seen have less to do with the merits of your claim and more to do with the insurance company’s desire to save money.
ERISA Disability Benefit Denials
The Employee Retirement Income Security Act of 1974 or ERISA was designed to protect employees. In fact, when President Ford signed the act on Labor Day, he said it was a great day for employees across the country. The law was a result of Congress being concerned about the theft of employee pensions by unscrupulous employers and third parties. The law covers not only pensions, it also covers employee welfare benefit plans. Your employee benefits; life insurance, health insurance, disability insurance and 401K’s fall within what ERISA defines as an employee welfare benefit plan.
If you have a long term disability or short term disability insurance policy provided as an employee benefit or you paid the premiums through payroll deduction it is more likely than not that you’re disability insurance policy will be considered part of an employee welfare benefit plan. If that is the case, then ERISA will apply.
If ERISA applies to your case, here are some of the things that you may face:
- the arbitrary and capricious standard of review requiring you to prove the insurance company’s decision was both wrong and without any reasonable basis;
- no right to a jury trial;
- no punitive damages;
- Often times there will not even be a trial, instead the judge will simply decide the case based upon the lawyer’s arguments contained in pleadings;
- You may lose the right to call witnesses or provide additional evidence in support of your claim;
- If you win your case the most the judge can order the insurance company to pay is the amount of your past due benefits and then send you back to the claim’s adjuster who already denied your claim once in order to get paid every month for the remainder of the policy.
When your disability claim is governed by ERISA you should not try and handle the claim by yourself. Take a few minutes to read through the details of what handling an ERISA claim requires and you may understand why we urge you to contact us regarding your long term or short term disability insurance policy. Trying to handle the claim yourself could limit your chances of winning in court if the insurance company denies your disability claim.
Bad Faith Disability Benefit Claim
Non-ERISA claims are subject to different laws in each state, so it is important to seek legal help regardless. Even determining whether ERISA applies to a claim can be difficult in many cases, and insurers routinely take advantage of this uncertainty. This is why having an expert legal team to help you navigate these complex and often confusing issues is of the upmost importance.
Sinclair Law has the experience and skill necessary to ensure your ERISA or non-ERISA disability benefit claim denials are handled correctly and we fight to ensure you get the benefits you deserve.
At Sinclair Law Firm, our legal teams handle cases involving disability insurance for both ERISA (employer provided) and Bad Faith Claims (private policy) claims.
For the better part of two decades our legal teams have handled disability insurance claims on behalf of individuals from across the nation. We have also appeared in courthouses across the country serving our clients. Call today us for a Free Consultation! 877-249-0091