ERISA Disability Claims

What to Know about the ERISA Administrative Appeal Procedure

Published on July 18, 2014 by

Filing an ERISA claim and receiving benefits is not an overnight process, and the ERISA administrative appeal procedure alone can take up to a year. Here’s what anyone filing an ERISA claim should know about the administrative appeal process and the statute of limitations.

Under federal law, a claimant cannot bring a claim under judicial review until an internal review is carried out. This internal review, or presuit administrative appeals procedure, begins when a claimant submits their proof of loss. At that point, the Plan has a set amount of time to carry out an internal review before the claim is taken to a judicial court. How does this work?

  • The Plan has 45 days to make adverse benefit determination (i.e. to determine that benefits are not a medical necessity to the claimant or that the claimant is not eligible for benefits for any other reason).
  • The Plan may use two 30 day extensions based on elements outside of their control, such as a claimant’s failure to submit documents necessary to make a decision based on their claim.
  • The claimant must appeal a denial of their claim within 180 days of that denial.
  • The Plan has 45 days to resolve any appeal with one 45 day extension.

The Statute of Limitations for Civil Action

Claimants need to pay close attention to the timeline for filing a lawsuit, because the statute of limitations for civil actions in ERISA cases has recently changed. As I mentioned before, statute 502 (a)(1)(b) requires that a claimant exhaust the internal review process before bringing their case under judicial review. ERISA does not provide a statute of limitations for actions under 502 (a)(1)(b), but a specific ERISA plan may have a limitation provision that goes into effect as soon as an individual files their claim.

Previously, the Supreme Court has been divided on whether an ERISA plan limitation provision is enforceable during the internal review process. Since the internal review process can take a year or more, it may use up a substantial amount of the claimant’s limited time to file a lawsuit. In 2013, the Supreme Court resolved this issue by ruling that a three year contractual limitation on an ERISA plan is enforceable, and the three year statute of limitations is measured from the time an individual files their claim (including the internal review process).

Claimants who are worried that the Plan is dragging out the ERISA administrative appeal procedure or otherwise trying to stop them from filing a lawsuit within the three year period should meet with an experienced ERISA attorney as soon as possible or read our free eBook to learn more.

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What to Do If You’re Told Your Disability Insurance Is ERISA

Published on May 23, 2014 by

There’s an unfortunate trend happening right now where companies that offer disability insurance are suddenly telling policyholders that their plan is governed by the Employees Retirement Income Security Act when they file a claim – even though this fact was never mentioned anywhere before then!

Why’s this going on? Because insurers know that they’re far more protected from legal liability under the Employee Retirement Act than they would be if the plan in question was independent. This has led them to attempt to retroactively alter plans so that they are covered under the federal rule, and sometimes even bend the truth or outright lie to people when they make a long term disability claim.

Luckily, there are ways that a policyholder can determine whether or not their plan really is under these far more insurer-friendly regulations, but you’re going to have to look into the matter yourself if you want to appeal a denial.

When Your Insurance Policy Isn’t an ERISA Policy

How can you prove that your policy isn’t what they say it is? Check the facts.

Was it sold to you as an individual policy? By definition, the Employee Retirement Income Security Act covers group policies. If you purchased your policy individually – even if an employer pays for it – that does not mean that it’s covered under the federal act.

Can you switch jobs and keep your insurance? If it’s possible for you to leave your current job and still maintain your current insurance policy, then there’s no way that it falls under federal regulations.

Are you the individual owner of a personal corporation? The Employee Retirement Act clearly doesn’t govern plans for these types of individuals, but that won’t stop insurers for trying to classify your policy in whatever way benefits them most.

Experienced disability attorneys can show you not only what to look for, but also how and where to find that information and what to do with it.

Check out our free disability eBook to learn more about different policies and how you can fight for the benefits that you need.

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Long Term Disability and the Two Prongs of the Miller Test

Published on April 11, 2014 by

Last time, I talked a lot about discretionary clauses and how they can hurt your ability to effectively challenge your insurance company on a denied claim and win. These clauses basically allow insurers to “construe” the language of your policy however they see fit when deciding whether or not to award your claim, which gives them quite a bit of wiggle room to deny benefits unless they are very clearly and expressly offered in your specific situation – and sometimes even when they are!

I mentioned how states are trying to fight back against these clauses, but also how – in legal battles with insurance companies –they’re currently losing. The courts are siding with insurance companies because the Employee Retirement Income Security Act has a “saving clause” that it’s hard to get around. Rules were laid down in the 2003 Supreme Court Case Kentucky Association of Health Plans v. Miller, and courts have continued to abide by the “Miller Test.”

What Exactly Is the “Miller Test”?

In deciding the outcome in Miller, the Supreme Court created a two-pronged test that defendants had to meet in order to remove discretionary clauses and have a better chance at getting benefits from their disability claim. It’s a test that’s so far proven difficult to beat. What are the two prongs?

  1. The state law being violated by the discretionary clause needs to be “specifically directed” towards insurance companies and self-insured plans.
  2. The state law has to greatly impact the “risk pooling arrangement” that exists between the insurance company and those they insure.

By far, the second part of the law is the one that’s causing the most hang-ups. In order for the state law to affect the “risk pooling arrangement,” the argument seems to be, it would need to be addressed when the contract’s created and not after someone makes a claim. At that point, it comes down to “administrative factors” and doesn’t affect risk pooling at all.

What this means for you is that it’s pretty useless for claimants to fight against discretionary clauses. However unfair they might be, that was a battle that needed to be undertaken when the plan was being drawn up. Essentially, you’re too late to do anything about it.

Luckily, there are other ways to get the benefits you need from your ERISA plan, and if you’re unsure how to go about it, you should contact a firm experienced in these kinds of cases.

Check out our free e-book for more details about ERISA disability and be sure to stay up to date on new long term disability information through our weekly blogs!

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ERISA Plans, Discretionary Clauses, and Long Term Disability

Published on April 7, 2014 by

More and more over the past several years, states have been trying to fight back against one of the more frustrating inclusions to ERISA policies. What is this inclusion? It’s called a discretionary clause, and basically it’s language in the policy that says insurers have sole discretion in construing the terms of the plan when they’re deciding whether or not to award a claim.

In theory, states still have the power to regulate insurance policies for their citizens, but their recent attempts to get rid of these discretionary clauses have proven to be less than successful so far. Why are discretionary clauses so important?

The Importance of Discretionary Clauses

Just because an insurer includes language that says they can decide what the policy really means when choosing to accept or deny your ERISA claim doesn’t mean that their word is irrefutable – just mostly irrefutable. Why? Because when a court is reviewing a policy and it includes discretionary language saying that the insurance company has the power to interpret the plan, they have to defer to this except in situations where it seems very clear that the insurer abused their privilege.

In contrast, policies that don’t give insurance companies this advantage may be looked at and interpreted solely by the court. To put it another way, when a plan includes a discretionary clause, the judge is lawfully required to assume that the insurance company is within their rights unless it can be proven otherwise. Without a discretionary clause, he or she can begin from a truly neutral position.

Doesn’t that sound fairer? More like actual justice? Unfortunately, when states have tried to keep these clauses out, most courts so far have prevented them from doing so because ERISA plans have a “saving clause” that allows them to preempt such attempts in many cases.

Still, it’s important to see that more people are trying to fight back against some of the more restrictive parts of ERISA and calling for change. Until then, if you have an ERISA policy and need to sue your insurer, you’d better make sure you work with a disability attorney who knows this area of the law.

Check out our free e-book for more details about ERISA disability and be sure to stay up to date on new long term disability information through our weekly blogs!

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