In this post, we answer some common questions regarding ERISA, particularly in the context of long-term disability claims. If you have additional questions, or if you would like more information, please reach out to our St. Louis ERISA disability lawyers. We know you are anxious to receive your benefits, and we will respond promptly.
WHAT IS ERISA?
The Employee Retirement Income Security Act (”ERISA”) is a federal law that applies to both retirement plans and welfare (such as disability) plans. The primary goal of ERISA is to ensure that when an employer promises benefits to its employees, the employees will actually receive them. ERISA sets out to achieve this goal by:
- Establishing standards for plan “fiduciaries”;
- Providing minimum claims procedures and protections;
- Requiring disclosures to plan participants and the government.
WHO IS A FIDUCIARY?
ERISA does not require an employer to offer a disability plan. However, if an employer chooses to do so, then ERISA confers responsibilities on plan “fiduciaries.” A fiduciary is a person who has discretion in administering and managing a plan. In the context of a disability plan, the following may be fiduciaries:
- The Insurer;
- The Employer;
- The Administrative Committee.
There may be more than one fiduciary. Depending on how the employer and insurer decide to allocate duties, the insurer may be a fiduciary with respect to administering claims and the employer may be a fiduciary with respect to hiring/monitoring service providers and issuing plan disclosures.
Regardless of who the fiduciary is, the fiduciary must act solely in the interest of plan participants, carry out his or her duties prudently and follow the plan documents. Otherwise, there may be a breach of fiduciary duty.
WHAT IS AN ERISA DISABILITY PLAN?
In order for disability coverage to be governed by ERISA, it must meet the definition of a plan “established or maintained” by the employer. While this may seem like a fairly easy determination, there is some gray area.
On one end of the spectrum, if your employer pays for a portion of the coverage, it is almost certainly an ERISA plan.
On the other end of the spectrum, if you purchased your coverage outside of the scope of your employment, and you pay for the entire cost of the coverage, your policy is almost certainly a non-ERISA policy.
Lying in between the two ends of the spectrum is the gray area. If your employer has made available to you the ability to purchase “voluntary” disability coverage but you pay for the entire cost of the coverage (through payroll deduction or otherwise), your coverage may or may not be governed by ERISA. This involves a facts and circumstances analysis for which you should seek expert advice.
WHAT IMPACT DOES ERISA HAVE ON DISABILITY CLAIMS?
The classification of your coverage as ERISA or non-ERISA could have significant consequences for you. In addition to the presence of ERISA fiduciaries, whether your disability coverage is considered an ERISA plan or not will also impact:
- The claims and appeals process;
- Whether your case will be decided by a judge or jury if you need to bring a legal action if your claim/appeal is denied;
- The “standard of review” that will be used in a legal action;
- The damages that may be available to you should you prevail in court.
Despite the federal protection, it is not always in your best interest for your coverage to fall under the ERISA umbrella. If your plan is an ERISA plan, the “standard of review” in a lawsuit may be less favorable (more on this below). Likewise, the damages available to you through an ERISA plan may be less than through a non-ERISA policy. Accordingly, it is critical that your claim be properly positioned as either ERISA or non-ERISA.
HOW DO I FILE AN ERISA DISABILITY CLAIM?
- Summary Plan Description: The first step is to ensure that you have a complete and updated Summary Plan Description (“SPD”). The SPD provides you with detailed information about your benefits, identifies the fiduciaries, and outlines the claims procedures. It is required to be provided to you within 90 days of the date that you are covered by the Plan. If you are not sure whether you have a current SPD, request one in writing from your employer.
- File Your Claim: Pay attention to claim filing deadlines in the SPD! When filing your claim, the accuracy and scope of the information submitted is critical. For example, disability policies frequently have pre-existing condition exclusions. One incorrect date with respect to the onset of the condition could impact your claim. Likewise, the definition of disability, at least for the initial period of disability, is usually directly related to your specific job duties and responsibilities. Accurately and appropriately describing the actual duties of your job is crucial.
- Review of Your Claim: ERISA requires that disability claims be decided within 45 days of receipt. In limited circumstances, the insurer may get a brief extension.
Unfortunately, the claims review process presents many potential pitfalls. For example, in the course of reviewing the claim, the carrier may request that you undergo an independent medical examination. Before doing so, you will want to be sure the policy authorizes the insurer to do so and what limitations are set for the exam. Even if your claim is approved, you will want to ensure the basis upon which it is approved does not unnecessarily limit benefits down the road. An experienced St. Louis disability lawyer can help you avoid the pitfalls.
WHAT ARE MY RIGHTS IF MY CLAIM IS DENIED?
You have at least 180 days to file an appeal and ERISA requires the reviewer to provide, on request and free of charge, copies of all information relevant to your claim. Your appeal must be reviewed by someone new, who will give no consideration to the determination made by the initial reviewer.
The plan must issue the determination of your appeal within 45 days. Again, there are certain provisions for extension of that timeframe. The plan may require you to submit two levels of appeals before you are permitted to file a lawsuit in court.
HOW CAN A ST. LOUIS ERISA DISABILITY LAWYER HELP ME?
The disability claim/appeal process can be laden with pitfalls for the claimant. An ERISA disability lawyer can help you avoid the pitfalls along your path toward a successful claim in several ways. For example:
- The initial claim that you submit should take into consideration the elimination period, the pre-existing condition exclusion provision, the definition of disability and any potential exclusions that may result in a denial. A St. Louis ERISA disability lawyer can ensure that your initial claim takes into consideration all of the technicalities and potential exclusions/limitations of your policy.
- The information that you submit in your appeal is of critical importance. Should your appeal be denied, you may wish to file a legal action. If so, the “standard of review” with ERISA cases is frequently the “deferential” or “arbitrary and capricious” standard. This means that the judge will not consider new evidence. Rather, only the existing records on file will be reviewed and the judge will determine whether or not the plan administrator abused its discretion in making its decision based on the records. An ERISA disability lawyer can ensure that the appeal you file is sufficient.
- In certain cases the standard of review can be switched to “de novo,” which will allow the court to review new materials and make its own determination of whether you are disabled, rather than giving “deferential” consideration to the insurer’s decision. An ERISA disability lawyer can ensure that, to the extent possible, the standard of review applied to your legal action is the most favorable one allowed.
ERISA is a complex federal law, and the disability claim filing process is generally not a “user friendly” one. By getting a St. Louis ERISA disability lawyer involved as early as possible, you increase your odds of a successful outcome. To schedule your free consultation, use the email form on this page or call us, at 888-588-0001.