Chances are that you have not arrived at this page by accident. You are probably trying to understand how a 1974 congressional act that you had never heard of. Like so many Americans who have been denied benefits, you are now likely all too aware of theÂ Employee Retirement Income Security Act, better known as ERISA.
While you may feel frustrated and confused, the denial of your claim does not mean the end of the road. Now is the time to arm yourself with knowledge. The better you understand ERISA, the more likely you will be able to collect the benefits you deserve.
What is ERISA?
ERISA is an acronym for the Employee Retirement Income Security Act. The act was originally passed to protect the rights of employees who were denied their pensions due to lack of funds. While ERISA did not force employers to offer pension plans, it did subject such plans to strict oversight and regulation.
ERISA did not stop at regulating pension and retirement plans, however. With very few exceptions, the act governs all “employee welfare benefit plans,” including group disability insurance. It is important to note that disability policies purchased privately are not governed by ERISA, nor are most group disability policies provided by church or governmental entities.
How does ERISA affect my disability claim?
Under ERISA, the disability insurance policies provided by employers are referred to as “plans”. The employees covered by these plans are called “participants” or “beneficiaries”. When a participant files a claim, the fate of that claim rests in the hands of the ERISA plan administrator. The plan administrator is usually the insurance company that issued the policy, but may also be the employer that provided the plan, a committee of employees, or a registered investment advisor, as specified in the official plan document.
If you have not yet filed your ERISA disability claim, it is essential that you request copies of:
- The summary plan description (SPD)
- The official plan document
- Insurance policies and amendments
- A summary of benefits participants are eligible to claim
- All brochures, certificates, and other documents regarding the plan that have been distributed to participants
- Any documents explaining and demonstrating how benefits and eligibility for benefits are determined
- All other documents that must legally be provided to participants upon request
Of particular importance is the summary plan description, as it will outline in specific detail how ERISA claims must be submitted and the information that must be provided by claimants. Failure to file a claim properly as outlined in the summary plan seriously jeopardizes not only the initial claim but also subsequent appeals and litigation.
While it is important to communicate with your employer and human resources department, you should not rely on their counsel alone. Ultimately, your ERISA plan administrator will decide whether you have sufficient evidence and have satisfied the filing requirements. If possible, you should consult yourÂ doctor to make sure that all of the necessary medical information is in order.
What happens after my claim has been submitted?
According to ERISA, the claims review process associated with your particular plan must be “reasonable.” This means that the ERISA claims procedure:
- Must be accurately described, including a clear statement of the dates within which ERISA claims and appeals must be filed, in the summary plan description.
- Cannot require a fee or other provision that that might deter the participant from initiating the review process.
- Allows the participant to authorize a representative to act on his or her behalf.
- Has systems in place to ensure that decisions regarding ERISA claims are made according to the official plan document and are consistent with decisions made with past participants presenting similar ERISA claims.
- Cannot require participants to file more than two appeals to claim denials before seeking resolution in a civil court.
If your claim is denied after reasonable review, your plan administrator must provide you with a document that:
- Explains why the claim was denied.
- Makes specific reference to the provision or provisions in the official plan document on which the denial was based.
- Details which materials and information you must provide in order to “perfect” your claim.
- Informs you of your right to bring a civil action after you have exhausted the appeals process and the deadline for doing so.
This document must also cite any rule or scientific judgment upon which the denial was based and offer you the opportunity to request a copy of this rule or scientific judgment in full. Your claim administrator must provide this document within 45 days of your filing your claim. If circumstances beyond the administrator’s control prevent a decision from being made within 45 days, you must be provided with due notice explaining what these circumstances are and when you can expect a decision to be made. In this case, a decision must be made no later than 75 days after your filing of your claim.
What if my ERISA disability claim is denied?
This is the point in the process where the dark side of ERISA rears its head. Under state law, if you have a personally funded disability insurance policy and your valid claim is denied, you are entitled to take immediate action in a civil court. You have the right to a jury trial and can seek a wide range of compensatory and even punitive damages.
As a federal law, ERISA generally pre-empts, or takes precedence over, state law. Under ERISA, you:
- Must either accept the denial of your claim or follow the appeals processoutlined in your summary plan description.
- Must exhaust the remedies available to you through the administrative appeals process before resorting to litigation.
- Are not allowed a jury trial; rather, your court appeal will be reviewed by a single federal judge.
- Are able to collect, at most, the monthly disability benefits that you had not received due to the claim denial and, possibly, some of your attorney’s fees.
If you have already had your ERISA disability claim denied and you are at the administrative appeals stage, or if you have exhausted your appeals and are considering litigation, it is essential that you seek qualified legal counsel immediately. Please read more about ERISA claim denials and appeals and then contact the experienced ERISA attorneyÂ J. Price McNamara for a free, no-obligation review of your case.