Many, if not most, employees are familiar with their employer’s retirement plans and health insurance plans. Employees are customarily introduced to those plans and allowed to participate early in the employment relationship. Fewer are as knowledgeable about the short and long-term disability plans also offered by those same employers. These usually employer-provided insurance plans provide a limited amount of tax-free income at a time when a worker is more or less disabled for a longer or shorter period.
In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA). Not only about retirement, but ERISA also imposed minimum requirements on all employee benefit plans, including employer-provided long and short-term disability insurance. If your employer’s plan is subject to ERISA, you will receive a brochure outlining the plan. ERISA will also impose standards relating to claims processing and individuals’ rights under the plan. Generally, only employer-sponsored disability plans are subject to ERISA.
Our law firm achieves results for our clients during their insurance claims. This includes obtaining $1,300,000 for an ERISA trial verdict, a $500,000 settlement for a disabled school teacher, and many more.
Because ERISA is a federal law, if it governs your group disability policy, we can represent you no matter where you live. Call us today for a free case evaluation, and read on for more information about what your claim may entail and to see how we can help you.
Disability isn’t something that only happens to someone else. The Council for Disability Awareness says one in four of today’s 20-year-olds will likely have a disability at some point before they retire. Disability insurance helps prepare you to deal with that eventuality.
Various types of disability insurance may cover you, including, for example, mortgage disability insurance, but the two main employer-provided types are short-term disability and long-term disability. The primary differences between the two are the length of the benefit payment period and the relative cost.
The tax status of your benefits depends primarily on whether you paid your premiums with pre or post-tax dollars. Your Human Resources department should be able to explain the tax status of your employer’s disability plans.
Short-term disability insurance (STD) pays a percentage of an employee’s salary for a specific period when they have an injury or illness and cannot perform their job. Usually, the benefit represents 40 to 60 percent of the employee’s gross base salary or wage and pays out for somewhere between two and twelve months of benefits. Independently purchased STD is also available and works much the same way. It is, however, far more expensive.
With short-term disability, coverage usually begins somewhere between one day and two weeks after the condition causing the disability begins. Benefits will likely be paid in a range from nine to 52 weeks after that initial date. Many plans require an employee to use sick days or other paid time off (PTO) before the start of benefit payments.
The employer can pay for short-term disability coverage or the employee can purchase it as a cafeteria benefit. Employer-paid plans can be purchased by an insurance company or self-funded by the employer. There can be tax implications based on who makes the payment. Some states make providing STD mandatory and mandate the coverage amounts and benefits.
Be aware that other coverage, such as Workers Compensation, may apply depending on where and how you became disabled. In the meantime, as your disability payments near the one-year mark, it’s time to start thinking about long-term or permanent disability coverage.
Long-term disability (LTD) insurance is an often employer-provided policy that protects employees from the loss of income resulting from the employee’s inability to work for an extended period due to injury, accident, or illness. LTD does not cover a disability due to work-related injuries that Worker’s Compensation disability coverage would cover.
One of the more significant problems with long-term disability insurance is that less than half of employees in the American private industry have any disability coverage, and only one-third have access to long-term coverage. Most companies that offer plans pay for the basic long-term coverage, although employees may purchase additional coverage. If not, additional coverage is available in the marketplace—though generally at a much higher cost.
Other groups, such as professional associations, may make lower-cost coverage available to their members. As a general rule, if the employer purchases the plan, the benefits are taxable, whereas if the employee pays, they will not be.
Long-term disability benefits usually kick in when short-term benefits end. LTD plans often have a defined period for payments, typically in the range of two to ten years. Others may pay until retirement age (65); obviously, this is the preferable plan.
Each LTD policy excludes different conditions and sets definitions for disability and eligibility for benefits. Some may exclude certain pre-existing conditions. Own-work and any-work policies offer different benefits. The former pays if the employee cannot do the employee’s regular job duties. The any-work policies pay only if the employees can perform no work duties at all.
Social Security Disability Insurance (SSDI) is a program administered by the Social Security Administration (SSA) that assists disabled people. Those with sufficient Social Security quarters, as defined for SSDI, may qualify for benefits.
Those who don’t meet that standard may be eligible for Supplemental Security Income (SSI) for those with limited income or resources. SSDI is not governed by ERISA because it is a government plan and not an employer-sponsored plan. It is cumbersome to apply for and notoriously difficult to receive. More than half of all first-time applications receive a denial.
Under the Louisiana Workers’ Compensation Act, you can collect permanent disability benefits under certain conditions. You can receive benefits for Permanent Partial Disability or Permanent Full Disability.
Partial Permanent Disability under workers’ compensation is available when the job injury:
Temporary Total Disability (TTD) benefits are available if an employee is physically unable to do any work while recovering from a work-related injury or illness. The disability must last at least two weeks for benefits to be available to the first week. The TTD benefit is two-thirds of the employee’s Average Weekly Wage but may not exceed 75 percent of the statewide Average Weekly Wage at the time of the injury, while the minimum benefit is 20 percent of that amount. TTD benefits will continue until the worker no longer needs regular medical treatment and doctors can determine whether there is any permanent disability.
Permanently and Totally Disabled (PTD) under the Louisiana Workers’ Comp Act will pay two-thirds of the injured worker’s Average Weekly Wage (as defined). There is a cap for the maximum weekly rate set for each year. The worker must be unable to engage in any employment or self-employment and must prove by clear and convincing evidence that the employee is physically unable to engage in any employment or self-employment.
Factors that may assist in a finding of disability include:
Accidental death & dismemberment insurance (AD&D) pays a lump sum benefit to policyholders and their dependents when the policyholder dies from an accident or loses hearing, vision, or limbs in an accident. AD&D policies only cover accidental death but may provide for double indemnity—paying double the face value of the policy – under certain circumstances. These policies are usually supplemental to life insurance and are relatively low-cost compared to other insurance policies.
At the Law Offices of J. Price McNamara, we have had some remarkable success with ERISA and Disability Cases. Remember, in any of these cases, you may appeal a denial—but you need an experienced ERISA disability attorney to handle your appeal.
ERISA AD&D Insurance Denial Lawsuit – Husband, sole breadwinner, took out expensive AD&D policy through CIGNA. ERISA covered the plan, which provided the framework for the appeal of CIGNA’s initial denial, based on their claim that the husband had been driving impaired during the accident at issue. The surviving spouse worked with Price McNamara to appeal the denial and filed an ERISA denial lawsuit against CIGNA.
This litigation revealed evidence that CIGNA knew the driver was not impaired and that CIGNA had, in fact, repeatedly withheld that evidence from the claimants. The initial appeal went again in CIGNA’s favor, but Price McNamara appealed to the Fifth Circuit, which held that CIGNA had abused its discretion in denying the claim. The Fifth Circuit remanded the case with instructions to find for the surviving spouse who received $1.3 million.
Workplace Injury Disability Settlement—An oil rig worker lost the ability to continue his regular line of work due to an injury on a rig. We filed suit in the federal court in New Orleans, eventually settling for $1.3 million.
We handle claims with all types of disability insurers, including:
If you or a loved one are involved in a disability dispute, especially one governed by ERISA, the intricacies and complexity of pursuing your claim is likely further wearing you down during a time when you’re already at a low ebb.
The Law Offices of J. Price McNamara can assist with pursuing the claim. We have extensive experience in ERISA and disability claims and will gladly dedicate that experience to your claim. Contact us or call (504) 420-6962 today for your initial consultation and case evaluation. Let us carry that burden for you!
2000 Crawford St
Houston, TX 77002
“Price is very professional, honest, and reliable. Whatever he says, he will follow through with the utmost integrity. He will turn over every stone and pays close attention to even the smallest detail.”
Following graduation from Loyola Law School in New Orleans in 1990, Price McNamara served as a Federal Judicial Law Clerk to the Honorable John M Shaw, Chief Judge, United States District Court Western District of Louisiana.
Mr. McNamara founded the Law Offices of J. Price McNamara, and began putting his past experience to work for the injured and disabled clients he now represents against the insurance companies in personal injury and long term disability and other insurance disputes in both federal and state courts