Is Long-Term Disability Covered by ERISA?
According to a recent report of the Centers for Disease Control and Prevention, 1 in 4 adults in the United States is living with a disability. Many of the disabilities affecting adults in the United States affect a person’s ability to work.
If you have been living with a disability for more than six months and you’re not retirement age, coverage from a long-term disability insurance plan might be a great support option for you. But is long-term disability covered by the Employee Retirement Income Security Act of 1974 (ERISA)? What happens if it isn’t?
ERISA covers some, but not all, long-term disability plans. It depends on a plan’s features. Knowing which plans are and aren’t covered lets you know how to fight an unfair denial. Read on to learn about your options and rights.
Protections for Plan Members Covered by ERISA
If ERISA covers an insurance plan, federal law requires the insurance company to follow certain procedures that protect you when you make a claim. Among others, ERISA protects claimants by doing the following:
- Requiring the insurance company to follow specific time limits when making a claim decision;
- Making the insurance company provide claimants with detailed and easy-to-read information when there’s a denial; and
- Requiring administrators to follow certain rules to avoid conflicts of interest.
As you know, insurance companies don’t always play fair with people making claims. They might drown you in paperwork and confusing jargon that makes it hard to fight a denial, or they might prolong the claim process to suit their needs. These games are particularly painful when you’re trying to manage a disability that affects your livelihood. ERISA protections can be crucial to receiving the benefits you deserve.
If you want to appeal a claim denial covered by ERISA, you have a short amount of time to do so (sometimes less than six months), and you must appeal the claim at the administrative level before you can file a lawsuit in court. The appeal deadlines under ERISA-covered plans are strictly enforced, and it’s best to bring denial notices to an experienced attorney immediately so they can meet the deadlines and fight for your benefits.
Which Long-Term Disability Plans Does ERISA Cover?
Whether ERISA covers your long-term disability depends on specific features of your plan. Generally, ERISA covers employer-sponsored group benefit plans that have the following qualities:
- The employer contributes to the plan;
- The plan isn’t completely voluntary;
- The employer does more than allow the insurance company to publicize the plan and collect premiums through payroll deductions; or
- The employer receives consideration beyond basic administrative fees.
A plan is not a covered employer-sponsored group benefit plan if benefits are paid out of an employer’s general funds. Also, government employees and employees of churches don’t normally have ERISA coverage for their long-term disability plans. If you’re unsure whether you have ERISA protections under your long-term disability plan, an experienced ERISA attorney can make that determination for you and fight for your rights.
What If My Long-Term Disability Plan Doesn’t Have ERISA Coverage?
If ERISA doesn’t cover your long-term disability plan, you still have options that allow you to appeal a denial or file a lawsuit. First, you need to understand the terms of your policy and follow any processes it provides for appealing a denial. Second, if you’re unsuccessful in an appeal, you can file a lawsuit against your insurer. You could file a lawsuit for:
- Breach of contract,
- Unreasonable delay,
- Improper claim practices,
- Unreasonable denial, or
- Bad faith denial.
While ERISA requires insurers to handle your claim within a set period of time, South Carolina law requires insurers to take many actions within a “reasonable time.” This is a tricky standard that insurance companies can twist to suit their own purposes and to deny you benefits. It’s important that you fight back against these tactics.
Understanding your rights under your insurance policy and fighting insurance companies is hard work. An attorney can do this hard work while you manage the effects of your disability.
Contact an Attorney Today to Claim What You’re Owed
Insurance companies write the policies they have to follow, and they have deep pockets that can overwhelm the average claimant during litigation. Fortunately, attorney John Peace founded the Peace Law Firm to fight insurance companies that mistreat their claimants. John has been representing claimants in long-term disability cases for more than 19 years, and he believes in stepping up for the injured and mistreated.
Don’t take mistreatment without a fight, and don’t fight without an experienced advocate like John Peace. Contact our team online or call us at 864-485-6970 for a free consultation.