What to Know about ERISA Insurance
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UPDATED: Aug 13, 2020
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ERISA law establishes Federal minimum standards for employer or group pension and insurance plans in private industry. Disability insurance ERISA laws regulate group and employer plans, protecting the interests of the insured parties. While this is a positive thing, ERISA regulations also require you to take several administrative steps in order to file a disability insurance claim and dispute denied benefits.
What ERISA Law Does
ERISA law was passed to protect the interests of employee benefit plan participants and their beneficiaries by:
- Requiring the disclosure of financial and other information concerning the plan to beneficiaries;
- Establishing standards of conduct for plan fiduciaries; and
- Providing for appropriate remedies and access to the federal courts.
ERISA laws apply to group policies obtained through your employer, an association, or other groups that offer disability insurance plans. Protection under ERISA laws means your group or employee benefit policies must follow specific ERISA regulations or guidelines in what benefits are offered, how much the plans cost, and what the process for appealing a denied claim is.
ERISA Lawsuit vs. Private Disability Lawsuit
Because employer and group plans are not tailored to an individual and private disability insurance is, there are some important differences to note when filing a lawsuit:
Under the federal ERISA law:
- Your rights and remedies are severely limited
- You may not file an ERISA lawsuit against the insurer until you file and exhaust an administrative appeal
- There are tough restrictions on where and when evidence can be introduced – limited pre-trial discovery
- Claimants have no right to a jury trial
- No punitive or extra-contractual damages are available
With a non-ERISA claim:
- Policyholders can file a lawsuit seeking coverage benefits as well as consequential and punitive damages from their insurer for bad faith
- Normal evidence and discovery rules apply
- Jury trials are permitted
Private or individual policies are governed under state contract laws. If your disability insurance claim is denied or unreasonably delayed by your insurance company, you have legal remedies available. You may work out a disability insurance settlement or file a private lawsuit.
However, if your disability insurance claim is denied by your employer’s group insurance company, according to ERISA laws, there are some rules to follow:
- You must file an appeal directly to the insurance company that denied the claim.
- Be aware of ALL deadlines! Missing deadlines can be extremely detrimental to your claim and your future rights during an ERISA lawsuit or trial.
- You are only given 180 days to gather your information for your ERISA appeal. While six months may seem like a long time, you must remember that you are essentially preparing all of your evidence.
Not knowing what ERISA law requires when appealing a claim and filing a lawsuit can result in the loss of your right to pursue legal action for your disability benefits.
TIP: The complications of ERISA law is another reason to make sure you have a private disability insurance policy to supplement your group or employer insurance.
Why You Need an ERISA Attorney
If your disability policy fall under ERISA laws, the best thing to do is seek the advice of a knowledgeable ERISA attorney that can help you decipher the many regulations and rules that need to be followed in order to make your appeal or ERISA lawsuit successful. An ERISA attorney can navigate the difficult procedural requirements of appealing a denied claim or filing a lawsuit to recover disability benefits that are owed. Federal ERISA law is not easy, or fun, to work through and an experienced attorney can be a valuable asset.
If you have disability benefits that have been denied under a policy that is governed by ERISA laws, contact an attorney today by clicking here to have one review your case for free.