Is My Long-Term Disability Claim Subject to ERISA Compliance?

September 13, 2023 | J. Price McNamara
Is My Long-Term Disability Claim Subject to ERISA Compliance?

When you have a disability and cannot work, you can seek disability benefits for financial support if you have disability insurance coverage. In some situations, you will file a claim just like any other insurance claim. However, for some policies, a law called ERISA will govern the claim process.

Read on to learn when ERISA applies to long-term disability claims. If you need to file a claim or have questions, consult an ERISA long term disability attorney immediately.

What Is ERISA?

ERISA, or the Employee Retirement Income Security Act, is a federal law enacted in 1974 to establish standards for employer-sponsored benefit plans, primarily focusing on safeguarding the rights and interests of employees and beneficiaries. Here's a brief overview of ERISA.

Purpose of ERISA

ERISA addresses concerns related to retirement, healthcare, and other employee benefit plans. It aims to protect plan participants, provide transparency, and set standards for the administration and management of these plans.

Unfortunately, it’s so complicated that those without lawyers will miss out on ERISA’s protections.

Types of Benefit Plans Covered

ERISA applies to a range of employer-sponsored benefit plans, including:

  • Pension plans: Providing retirement income.
  • Health and welfare plans: Offering healthcare, disability, and other non-retirement benefits.
  • 401(k) plans: Defined contribution retirement savings plans.
  • Employee stock ownership plans (ESOPs): Plans that allow employees to become partial owners of the company through stock ownership.

Key Provisions of ERISA

ERISA includes several key provisions:

  • Fiduciary duties: Plan administrators and trustees must meet a high standard of care in managing plan assets and making decisions.
  • Reporting and disclosure: Employers must provide detailed information about the plan's features, funding, and financial health to participants.
  • Vesting: ERISA ensures that employees have a legal right to their accrued pension benefits after a certain period of service.
  • Benefit claims procedures: The law establishes rules for how participants can appeal denied benefit claims.
  • Enforcement: ERISA provides a framework for legal action against plan administrators who breach their fiduciary duties or otherwise violate the law.

Impact on Employee Rights

ERISA empowers employees by providing them with legal protections and rights related to their benefit plans. This includes access to information about their plans, the right to sue for benefits, and safeguards against arbitrary denial of claims.

ERISA has evolved over the years through various amendments and court interpretations. These changes reflect the evolving landscape of employer-sponsored benefit plans and the need to adapt to new challenges and developments.

ERISA plays a critical role in safeguarding employees' rights and interests in employer-sponsored benefit plans. However, the law can also cause challenges for employees trying to obtain their rightful benefits. If you need to file a claim and ERISA plays a role, always discuss the matter with an ERISA benefits attorney.

What Is a Long-Term Disability Claim?

A long-term disability (LTD) claim, particularly in the context of private disability insurance, is a legal and financial process by which individuals who become disabled and unable to work for an extended period seek financial assistance through their disability insurance policy. This insurance provides income replacement to policyholders who cannot perform their regular job duties due to a qualifying disability.

Below is an overview of what a long-term disability claim entails. Seek legal help regarding a possible disability claim for you.

Purchase of Private Disability Insurance:

Individuals can purchase private long-term disability insurance policies individually or through their employers. This insurance differs from government programs like Social Security Disability Insurance (SSDI).

Qualifying Disabilities

To make an LTD claim, the policyholder must have a disability that meets the criteria outlined in the insurance policy. Common qualifying disabilities include injuries, illnesses, mental health conditions, and chronic illnesses that significantly impede the ability to work.

Waiting Period

Most LTD policies have a waiting or elimination period before benefits kick in. This period can range from a few weeks to several months, during which the policyholder must be unable to work due to their disability.

Proof of Disability

Policyholders must provide thorough medical documentation proving their disability. This typically includes medical records, physician statements, diagnostic tests, and other evidence demonstrating the severity of the condition.

Filing the Claim

To initiate the claim process, policyholders must submit a disability claim to their insurance provider. The claim should include detailed information about the disability, the policyholder's medical history, treatment plans, and any additional documents requested by the insurer.

Review and Assessment

Once you submit a claim, the insurance company will review it to determine if the disability meets the policy's definition and eligibility criteria. This review often involves consulting with medical professionals and claims adjusters.

Approval or Denial

After evaluating the claim, the insurance company will either approve or deny it. Approval means the policyholder will start receiving disability benefits, while denial means the insurer does not believe the disability qualifies for coverage.

Benefit Payments

If the claim gets approved, the insurance company will make periodic benefit payments, usually on a monthly basis. The policy outlines the amount of these payments. You will typically receive a percentage of your pre-disability income.

Ongoing Medical Reviews

Some policies require policyholders to undergo periodic medical reviews to assess their ongoing eligibility for benefits. This is to ensure that the disability still prevents the policyholder from working.

Rehabilitation and Return-to-Work Assistance

Some LTD policies offer vocational rehabilitation services or return-to-work programs to help policyholders transition back to work when they are medically able.

Appeals Process

Policyholders have the right to appeal the decision if a claim gets denied. This often involves providing additional evidence or documentation to support the claim.

In cases of denied claims or disputes with the insurance company, policyholders may seek legal assistance from disability insurance attorneys who handle these matters. These attorneys can help navigate the appeals process or take legal action if necessary.

Long-term disability insurance provides financial security to individuals facing extended periods of disability, ensuring they can continue to meet their financial obligations even when they cannot work. Understanding the claims process, knowing the policy's terms and conditions, and seeking legal assistance when necessary are essential steps to maximize the chances of a successful LTD claim.

Policyholders must have an attorney carefully review their insurance policies, review medical records, and be ready to advocate for their rights and address challenges during the claims process.

When Does ERISA Govern Long-Term Disability Claims?

The Employee Retirement Income Security Act (ERISA) governs long-term disability (LTD) claims when certain conditions exist. ERISA's applicability to LTD claims primarily depends on the nature of the insurance policy and the employer's involvement.

Here's a breakdown of when ERISA governs LTD claims:

  • Employer-sponsored group plans - ERISA typically governs LTD claims when the insurance coverage is through an employer-sponsored group plan. These plans are established and maintained by employers for the benefit of their employees.
  • Private or individual policies - ERISA does not apply to private or individual long-term disability insurance policies that individuals purchase on their own, outside of their employment. These policies are not employee benefit plans under ERISA.
  • Employment relationship - For ERISA to govern an LTD claim, there must be an employer-employee relationship. ERISA aims to regulate employee benefit plans, and therefore, claims must involve employees and their employers.
  • Employer involvement - ERISA typically applies when the employer plays an active role in administering the LTD plan. This includes decisions related to plan eligibility, contributions, and the selection of insurance providers.
  • Voluntary plans - Even if an employer offers long-term disability coverage, if it is entirely voluntary and employees pay the entire premium, ERISA may not apply. ERISA generally covers employer-sponsored plans where the employer contributes to the cost.
  • Self-funded plans - Self-funded LTD plans, where the employer funds the benefits directly from its own assets rather than purchasing an insurance policy, are subject to ERISA.

ERISA also mandates that employers provide participants with certain information about their employee benefit plans. This includes plan documents, summary plan descriptions, and other disclosures to ensure transparency and protect employees' rights.

ERISA imposes fiduciary responsibilities on those who manage and administer employee benefit plans. These fiduciaries have a legal obligation to act in the best interests of plan participants and beneficiaries.

ERISA establishes specific procedures for handling claims and appeals related to employee benefit plans. These procedures include timelines for making claim decisions and notifying claimants of denials, as well as providing opportunities for appeals.

ERISA-governed LTD plans must offer a formal appeals process that allows claimants to challenge denials and provide additional evidence in support of their claims. If an LTD claim gets denied, ERISA provides a legal framework for claimants to file lawsuits in federal court to seek remedies. However, these lawsuits are subject to certain restrictions and limitations under ERISA law.

The applicability of ERISA to LTD claims can have significant implications for claimants. ERISA restricts the types of damages and legal remedies available to claimants. Additionally, ERISA preemption can limit the ability to pursue state law claims in certain situations.

Given the complexities surrounding ERISA and LTD claims, individuals facing denials or disputes with their long-term disability insurance providers often seek legal counsel.

Disability insurance attorneys who handle ERISA matters can provide guidance, navigate the appeals process, and advocate for the claimant's rights, ensuring compliance with ERISA regulations while pursuing the best possible outcome for the claimant.

Ways an ERISA Long-Term Disability Lawyer Can Help You

Hiring an ERISA long-term disability (LTD) lawyer can be instrumental in navigating the complex process of pursuing an LTD claim. ERISA law is intricate, and insurance companies often have substantial resources and legal teams to handle these claims.

Here are ways in which an ERISA LTD lawyer can benefit you:

  • Explaining your policy - An experienced ERISA attorney will thoroughly review your long-term disability insurance policy to understand its terms, conditions, and coverage. They can explain your rights and obligations under the policy, ensuring you have a clear understanding of what is at stake.
  • Advising on claim documentation - ERISA LTD claims require extensive documentation to support your disability. Your attorney will guide you in collecting and organizing the necessary medical records, doctor's opinions, and other evidence to strengthen your claim.
  • Filing an accurate claim - ERISA claims must adhere to specific requirements and timelines. An attorney can prepare and submit a complete and accurate claim to your insurance company, minimizing the risk of administrative denials due to procedural errors.
  • Negotiating with insurance companies - Your attorney will engage in negotiations with the insurance company on your behalf. They will work to secure a fair settlement and avoid unnecessary delays or litigation when possible.
  • Handling the appeals process – If your insurer denies your initial claim, your ERISA attorney will manage the appeals process. This includes preparing and submitting an appeal, compiling additional evidence, and addressing any issues that led to the denial.
  • Filing lawsuits when necessary - If you receive a denial of your appeal, your attorney can file a lawsuit in federal court to seek the benefits you deserve. ERISA lawsuits require specific legal knowledge, and an experienced attorney is essential in this process.

ERISA has strict regulations governing LTD claims, including specific timelines and procedures. An attorney will ensure that your claim complies with these regulations and that you meet all deadlines.

If your case goes to court, an ERISA LTD attorney has the legal experience necessary to navigate the complexities of ERISA litigation. They understand the nuances of federal court procedures and can present a compelling case on your behalf.

Many ERISA attorneys work on a contingency fee basis, which means they only receive fees if you win your case. This arrangement can alleviate the financial burden of legal fees while fully motivating your attorney to secure a favorable outcome.

Navigating the process of an ERISA LTD claim can be challenging, particularly when dealing with a disability that already poses significant stress and uncertainty. An experienced attorney can level the playing field with insurance companies, provide guidance, and increase your chances of successfully obtaining the benefits you deserve.

If you face an LTD claim, consult an ERISA lawyer to discuss your specific situation and explore your legal options.

J. Price McNamara Author Image

J. Price McNamara


Losing my own brother, then my father and sister after long, disabling illnesses just a few months apart drove a career change for me. Before that experience, I never truly understood the place you’re in. I never understood the dramatic impact that receiving (or not receiving) the disability and life insurance benefits you paid for and counted on can have on your life especially when you need to focus on family and healing. What I experienced with my own family now drives the way I view my clients and my work, and I will never forget it!

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