What is ERISA?
ERISA is shorthand for the Employer Retirement Income Security Act of 1994. It’s Federal legislation that governs how insurance companies handle disability claims and it gives disability carriers a “get out of jail free card.”
In most ERISA governed claims, a court can only overturn the long term disability carrier’s decision if you prove that the denial was “arbitrary and capricious.” That’s the highest burden of proof in a civil court and it’s the “get out of jail free card” that disability insurance companies, like UNUM Provident, MetLife, Cigna/LINA, Aetna, Lincoln Financial, Prudential and The Hartford use to “play hardball.”
Claims denial and appeal
If your long term disability claim has been denied or terminated, the ERISA rules provide that you’ll have 180 days in which to file an appeal. You should request a copy of your complete file from the long term disability carrier and hire an experienced long term disability attorney to represent you in the appeals process.
Once the appeal letter is submitted under the ERISA statute, the long term disability carrier will have 90 days in which to review the material and decide whether it’s going to overturn or uphold the denial.
Filing the law suit
Once the internal appeals process is exhausted, you’ll have the right to file a lawsuit in Federal court. However, no additional evidence can be submitted. The Judge is limited to reviewing the claims file. There are no depositions, hearings or even trials. That means that neither you or your treating physician is going to be able to testify.
The court will simply review the medical and vocational proof in the claims file. The appeals letter is, quite frankly, your trial and that’s why it’s crucial that you have an experienced disability attorney represent you in the appeals process.
How the Federal Judge makes a decision in an ERISA case
In most ERISA governed cases, the Federal court must defer to the long term disability decision so long as there is a “rational basis” or a “reasoned explanation for the decision.”
The Federal court will only overturn the insurance company’s denial, if you can show the denial is “arbitrary and capricious.” Even if you’ve been accepted as being disabled by the Social Security Administration, the long term disability carrier isn’t bound by that determination. The discretionary clause in the disability insurance company is their “get out of jail free card.”
When you file a lawsuit the best you can hope for is to recover the past due benefits that you are owned and have your monthly disability check reinstated. Unfortunately, there are no bad faith or punitive damages and attorney fees are rarely awarded. Most cases settle for 10% to 50% of the past and future value of your benefits.
What you should do today
Let’s be frank. Long term disability insurance claims are complicated. There are short deadlines and the appeal is your trial. There are a number of legal issues in many appeals including limitations, benefits due to mental illness or self reported conditions, exclusions for pre-existing conditions and even arguments about overpayments or reduction of benefits.
You would owe it to yourself to get help with your long term disability claim, appeal or lawsuit regardless of whether or not your long term disability policy is a group sponsored long term disability plan or an individual disability income policy.
Contact long term disability attorney, Nancy Cavey, who has helped hundreds of people with the long term disability insurance. She’ll personally consult with you, review your claim, prepare your appeal, and if necessary, file suit and represent you in court.