What is ERISA and Why Should You Care? | Florida Disability Insurance Attorney
Your employer may have offered you a long term disability policy as part of your benefit package. Did you accept and begin paying premiums? If so, and if you are not employed by a church or a municipality, your claim is probably covered under the Empoyee Retirement Income Security Act (ERISA).
The ERISA Act was passed by Congress in 1974 to address teamster union corruption. Remember Jimmy Hoffa who used teamster dues to fund his criminal enterprise?
Congress wanted to pass a simple (not), comprehensive (not) and uniform (never) application of law for health, life, disability, and pension benefits plans. The ideas was to reduce litigation by having a uniform system that protected beneficiaires such as yourself while reducing premiums.
The reality is that ERISA, which impacts your health, life, disability insurance policies, and even your private penion or 401K plan, has failed miserably at meeting those goals.
ERISA has become a complicated regulatory maze that has only benefited administrators of ERISA plans and the insurance companies that offer these policies. ERISA has been used to deny people, like you, the benefits you paid for and the benefits you deserve.
ERISA specifically prohibits you from making any state law claims. Many state insurance laws provide consumer protection provisions such as prohibiting “discrectionary clauses” in policies.
ERISA usually presumes the claims administrator was right in making the decision to deny or limit your benefits. You, must show the claims administrator was “arbitrary and capricious” in denying your claim if you are going to win.
This is true even if the claims administrator who is making the decision to pay also pays the benefits. Talk about a conflict of interest!
Even if you proved you have been robbed, all you get are the benefits you asked for to begin with. You can’t sue for compensatory damages or punative damages. You can’t even ask that the claims administrator who wronfully denied your benefits be punished.
Even the court in Florence Nightingale Nursing Service v. Blue Cross Blue Shield, 832 F. Supp. 1456, 1457 (N.D.Al. 1993) called ERISA, “Everything Ridiculous Imagined Since Adam.”
The United States Supreme Court heard oral argument on April 23, 2008 on the question of what deference a claims administrator should be given in an ERISA plan. This decision will have monumental impact on ERISA cases in the future.
If you have any questions about your ERISA/long term disabiity insurance claiim, contact Florida EISA long term disability insurance attorney Nancy Cavey by clicking the link or calling 727-894-3188.