How ERISA impacts long-term disability insurance claims

On Behalf of | Apr 9, 2024 | Social Security Disability

People who are coping with disabling medical conditions may have several different forms of support available to them. If someone acquired their condition due to their job, they might qualify for workers’ compensation benefits. Other times, people may have worked for long enough to qualify for Social Security Disability Insurance (SSDI) benefits.

In some cases, those who find themselves unable to work due to medical challenges have private long-term disability insurance coverage available through their employers. Their workplace benefits package might include disability coverage. When disability benefits are available through an employer, they are often subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

What impact does ERISA have on a claim for long-term disability benefits?

A different company perspective

One of the most important provisions of ERISA involves how the professionals reviewing claims treat policyholders. There is often tension between insurance providers and claimants, as claims reduce company profits. However, when ERISA applies, an insurance company has a fiduciary duty to the policyholder. They should put the best interests of the policyholder above all other considerations, including the financial benefit of the insurance company. This requirement reduces the degree of conflict involved in the claims process.

The right to appeal

Although the insurance company should act in the best interests of a policyholder, unfair denials do still occur. People who believe they cannot work and should have access to disability benefits have the protected right to file an internal appeal at the insurance company. That appeals process may involve the submission of additional medical evidence. Even if the appeal is not successful, what someone submits to their insurance company can be crucial for their long-term protection. If they have to take legal action in court, the evidence used in their appeal is what they can use as part of their court case.

ERISA claims are often more complex than the average benefits claim. They also typically involve a degree of risk for the claimant, as they may have no alternate sources of financial support available. Having legal guidance when initiating an ERISA long-term disability benefits claim can be crucial to someone’s success. Those who understand how ERISA claims differ from other insurance claims may more readily acknowledge their need for support throughout the process.