ERISA stands for the Employee Retirement Income Security Act of 1974. It is a set of federal regulations that apply to insurance policies obtained through your employer, union, or employee organization.
Congress originally passed ERISA to protect large pension funds (hence the “Retirement Income” part of the name). As you may recall, several decades ago there was very little protection to employees’ pension funds if the employer went bankrupt or if the employer decided to raid the pension funds. Thus, Congress enacted ERISA to protect employees’ retirement pensions. Unfortunately, the insurance companies have used their power and influence to broadly expand the reach of ERISA to other “fringe benefits” and employee benefits. In 1986, the U.S. Supreme Court decided that ERISA governs employer-provided insurance benefits in addition to employer-provided pension plans. Now ERISA applies to most all employee benefits, including health, life, and disability insurance – and not just pensions. ERISA “preempts”, or supersedes, state laws that govern employee benefits plans.
Is My Claim Governed by ERISA?
If you are covered by a Group Long Term Disability Policy through your employment, your claim is probably governed by ERISA. As stated throughout the remainder of this website, if you did not obtain disability coverage through your employer or employee group, and instead purchased it as an individual policy from an insurance agent or broker, then there is a good possibility that your disability claim will not be covered by ERISA and your legal options and remedies are more favorable. Moreover, church and governmental (including most City and University) employees are also exempt from ERISA.
What to Do If You Are Denied Coverage for a Non-ERISA Policy
If you have church policy, a governmental employee policy, or an individual disability policy purchased directly from an agent or broker then you may not have to appeal the denial before filing a lawsuit. In these instances, you should consult an attorney immediately. You can reach The Ortiz Law Firm at (866) 853-7210.
What to Do If You Need to Appeal a Denial Under ERISA
If you have a disability claim that is subject to ERISA regulations, you must be sure to take all appropriate actions for a timely appeal the denial of your benefits.
ERISA requires that you “exhaust” all “administrative remedies” before you can file a lawsuit. This means you may have to file several appeals directly with the insurance company before you can take your case to court. In most instances, you must file your appeal within 180 days from the date on your denial letter. However, you should read the last few pages of your denial letter from the insurance company. The insurance company typically tells you: (1) the time limit to file your appeal and (2) the address where you should send the appeal.
You do not necessarily require an attorney to appeal your denial of benefits, but it may be to your benefit to retain the assistance of an attorney to help you in your claim with the insurance company.
What is ERISA Preemption?
Courts have determined that all State laws affording remedies to insurance claimants (insureds) for the improper denial of employer-provided insurance benefits do not extend beyond the limited remedies afforded by ERISA. State laws, including “common law” and state statutes, are “preempted” by ERISA. For example, any right under Florida law to recover “extra-contractual” damages for the bad faith breach of an insurance contract is preempted and not available under ERISA regulations.
An experienced long term disability attorney can assist you in determining whether your claim is subject to ERISA regulations or not. If your disability insurance claim has been denied or terminated call us at (888) 321-8131 or contact our office online to request a free case evaluation.