If your disability insurance is provided through your employer, understanding how ERISA may impact your disability claim can be confusing. However, the following overview of how disability insurance and ERISA generally work together can provide you with some important insight as to what to expect moving forward.
- Background on ERISA – Taking effect in 1974, ERISA (the Employee Retirement Income Security Act) is a federal law that establishes standards for many voluntary pension and health plans in order to protect the policyholders of these plans (according to the U.S. Department of Labor).
- Disputes regarding disability insurance – When disputes regarding a disability insurance policy related to an employee benefit plan arise, ERISA outlines the procedures that policyholders must follow as legal recourse. In particular, with disputes regarding disability insurance, ERISA typically mandates that policyholders who have been denied benefits have to pursue all possible internal review procedures (or appeals) provided by the insurer.
- Possible financial recovery – When pursuing financial recovery for denied benefits, ERISA only provides options for seeking back benefits, interest and, when a lawsuit is successful, legal fees. However, ERISA does not provide options for recovering incidental losses, such as living expenses, damage to credit rating or emotional distress (even though the denial of a claim can lead to significant losses in each of these categories). Basically, the recovery only includes the benefits which were denied.
- Exceptions regarding disability insurance and ERISA – In some cases, ERISA does not apply to employee benefits. For instance, if your employer is a religious or government institution, then ERISA will not govern your plan, and the applicable state law will usually come into play to resolve benefit plan-related disputes and often allow for far greater categories of recoverable damages/harms.
Disability Insurance and ERISA: Additional Important Info for Policyholders
- Know your policy – If you are not sure whether your disability insurance policy is part of a benefits plan governed by ERISA, make sure you find out. Once you know this, you can make an informed decision regarding whether you may want to purchase a disability insurance policy on the open market, rather than through your employer.
- Have a savings – If possible, try to build up your savings so that you have a financial buffer if you do end up getting hurt and need to file a disability insurance claim. These claims can take some time to resolve, and having a savings can support you in the interim.
- Talk to a lawyer – If you are getting ready to file a disability insurance claim that may be governed by ERISA – or if you are preparing to appeal a denial of your claim, don’t wait to talk to an attorney. An experienced disability attorney like Shawn E. McDermott can help you successfully navigate the complexities of the process.
Denver, Colorado Disability Insurance Lawyers at McDermott Law, LLC
Are you getting ready to file a disability claim or an appeal to a denied claim? If so, you can turn to Denver Disability Insurance Attorney Shawn E. McDermott for experienced help and aggressive legal advocacy. Dedicated and experienced, Shawn McDermott has a record of success when it comes to helping injured people file disability claims, navigate the complexities of the legal system, stand up to insurers and ultimately obtain the benefits they need and deserve.
From our offices in Denver, we provide the highest quality legal services to injured people throughout the state of Colorado.