Long Term Disability Insurance (ERISA)

Daniel A. Webb with some Peonies


Short v. Long Term

Long Term Disability Insurance (LTD) claims fall into several distinct categories and vary substantially from claim to claim.  The most common type is purchased through an employer and has a short term disability plan that turns into a LTD claim after a certain period of time, generally less than a year and often times 90 days.

As an attorney, I don’t get involved in short term claims, and the short term claims are generally easier to get approved without an attorney’s help.

What is ERISA?

I focus on the LTD benefit claims.  LTD cases are often called ERISA cases because they are usually governed by the Employee Retirement Income Security Act of 1974.  ERISA is a federal statute that was passed by congress to protect employee pensions; it also covers LTD plans purchased through an employer.  In some instances, LTD plans are exempt from ERISA and are termed ERISA exempt plans.  The distinction is important because if ERISA does not govern a claim, the person seeking benefits (the “claimant”) has a state law breach of contract claim that could be heard by a jury.  Most LTD claims are governed by ERISA, and they go to federal court where each party writes a brief citing to administrative record prepared by the insurance claims administrator.  These cases are handled entirely on paper, there is no jury and the judge may never even see the claimant.

Two types

LTD plans usually come in one of two basic types.  Either an own occupation plan or a reasonable occupation plan. Own occupation plans allow for an own occupation period of two or sometimes three years.  During the own occupation period, the claimant must prove that they cannot perform the work they were doing when they became disabled.  If the claimant was doing heavy physical work on their last job, getting approved for LTD benefits during the own occupation period may be relatively easy.  The downside to this type of policy is that when the own occupation period ends, the definition of disability becomes any occupation.  At this point, benefits are often stopped, and the insurance company asserts that the claimant can perform the duties of an easier job.

Definition of disability

Reasonable occupation plans use a definition of disability that requires the claimant to demonstrate that they cannot perform any type of work that would pay a certain percentage of their earnings before they became disabled, often times 60%.  Getting approved on these plans is difficult from the start but generally gets no more difficult as time goes on, especially if the claimant’s disabling conditions are degenerative in nature and getting worse with time.

Difficult questions

 No matter which type of policy is involved, the stakes are high and the issues are complex.  There are difficult questions of federal preemption versus the states’ rights to regulate insurance policies sold within their borders.  There are also complicated offsets between social security benefits and workers’ compensation benefits that must be addressed. 


Most importantly, ERISA cases are generally tried based on the evidence before the insurance plan claims administrator when the decision to approve or deny was made.  Accordingly, claimants cannot add evidence after the final decision has been rendered and it’s time to file a lawsuit.  This means that claimants should hire an attorney early so the record in their case can be properly developed.


If you have a LTD plan and have been denied check the deadline to appeal.  Most plans allow for at least one appeal within 180 days of denial.  Beware, that six months goes by quick, call early.

Claimants should hire a lawyer early to ensure that the record in their case contains the necessary evidence before it is too late.