How to Make a Claim for STD or LTD Benefits Under ERISA

The Required Administrative Process in a Claim for Benefits under ERISA

The key to an ERISA disability benefits claim is make sure to follow all required steps in the administrative process.  Claimants must “exhaust” their administrative remedies before filing a lawsuit.  Failure to exhaust one’s administrative remedies may result in significant limitations on the standard and scope of court review in a lawsuit.  This is why everything you do in the the administrative claims process may determine whether you are ultimately successful in your claim should you have to go to court.

Step One

Step One is to bring a claim to the plan administrator. A claim is a “request for plan benefit . . . made by a claimant in accordance with a plan’s reasonable procedure for filing benefit claims.” 29 C.F.R. §2560.503-1(e). As set forth in Abdel v. U.S. Bancorp, 457 F.3d 877 (8th Cir. 2006), a claim for benefits is made when claimant seeks benefits.  Compare another case, Layes v. Mead Corp., 132 F.3d 1246 (8th Cir. 1998, wherein the court decided that there was no claim for benefits until formal procedures for filing claim are satisfied.

Typically, an application for benefits consists of three parts: (1) an application with detailed information from the claimant, (2) detailed information from the employer, and (3) the attending physician statement. Failure to complete any of these forms can be fatal to a claim. In the case Mitchell v. Equitable Life Assur. Soc’y of U.S., 310 Minn. 219, 224, 245 N.W.2d 618-620-21 (1976), the claimant was barred from filing suit for failing to supply the employee’s statement and physician’s statement.

There is also usually a requirement of timely notice of claim and a proof of loss or proof of claim consistent with your state’s insurance laws.  However, late notice will usually only bar a claim where there is prejudice to the plan’s insurer. The notice prejudice rule that applies to an insured ERISA plan was set forth in UNUM Life Ins. Co. of America v. Ward, 526 U.S. 358, 369 (1999).

Step Two

Step Two is to exhaust all mandatory administrative appeals. Most long term disability insurance policies/plans have an internal appeal process, whereby you have the right to file an appeal of a denial directly with the insurance company. This right becomes a duty if you want to file a lawsuit. That’s because you cannot file a lawsuit unless you have gone through all mandatory appeals directly with the insurance company.

Most LTD policies have one of the following appeal structures: (1) two mandatory appeals; (2) one mandatory appeal; or (3) one mandatory and one “optional” appeal.

Why is it so important that I appeal?