The answer to this question depends on the type of long-term disability coverage you have. Most employees have disability coverage through a group plan with a private sector employer. If your employer is large enough, or if you got your policy through an employee organization or union, then ERISA rules and regulations come into play.
When You Can Sue
Under ERISA, you must “exhaust” your administrative remedies before filing a lawsuit. This means that you must follow the terms of the insurance policy terms and go through each step of the appeals process directly with the insurance company. Most insurance policies only allow claimants to file one appeal, but some may offer an optional appeal, so you should review your policy carefully.
FREE RESOURCE: Appeal a Long-Term Disability Denial with our LTD Appeal Guide
When You May Not Need to Appeal
There may be other situations where you do not have to file an appeal before filing a lawsuit. Generally, you do not have to appeal if you have an individual policy purchased directly from an insurance agent or broker, or if your policy is sponsored directly by a government or church employer (in other words, if the policy is not through a union or employee organization). In these situations, you may be entitled to file a lawsuit after your initial denial.
How Long Do I Have to File a Long-Term Disability Lawsuit?
If your LTD policy does not specify a time limit for filing a lawsuit, then the time limit is the same as that for a breach of contract claim in your state. However, most LTD policies have a specific time limit for filing a lawsuit. This specific language is usually found towards the back of an LTD policy. Typical time limits range from 1 to 3 years, but I have seen a time limit as short as six months.
Can a Policyholder Sue for Future Policy Benefits and Attorney Fees?
An insurance company cannot be forced to pay all future benefits. As for attorney’s fees, it depends on the nature of the claim.
Schedule a Free Long-Term Disability Case Review
You may have questions about whether you are required to file an appeal or whether you should participate in the optional appeal process. If you have such questions, you should immediately seek legal advice from an attorney familiar with ERISA disability cases. Please call (888) 321-8131 for a free case review.
