ERISA Disability Claims

5 More Ways to Avoid ERISA Preemption in your Disability Claim

Published on March 28, 2014 by


Recently we told you about how your lawsuit against your insurer can be “preempted” by ERISA if the type of policy you have falls under the guidelines for that law. This means that your case would be pulled out of a normal state court and tried in a federal one where the laws are far less friendly towards people fighting against insurance companies behaving badly.

Obviously, this is not something that you want, but there isn’t much you can do to keep it from happening. Whether or not a lawsuit will be tried under ERISA depends wholly on the type of policy that you have, and far too few of them in the US are exempt from ERISA.

Last time we mentioned five kinds of policies that ERISA can’t touch:

  • Policies from a government agency
  • Policies from a church
  • Multiple Employer Trusts
  • Plans set up by the insurance industry
  • Plans only created to comply with disability laws, worker’s compensation, or unemployment
  • Insurance through family businesses, sole proprietorships, closely held corporations, and partnerships – but only sometimes

Below you’ll find five more potential ways to avoid preemption.

Additional Plans Not Covered By ERISA

“Pass-through” plans. Sometimes the employer is just a “conduit” through which employees pay for their insurance – ERISA does not cover these plans.

Plans with no ERISA intentions. Employers have to follow the statutory directives of ERISA to set up a plan covered under the law. If they mess up or simply don’t intend to do this, ERISA won’t cover it.

Union and other professional plans. If you get your insurance through a labor union, an employee organization, or a professional association, it is not governed by ERISA.

Plans sold by entrepreneurs. If an entrepreneur sells you an insurance plan, it’s not an ERISA policy.

Plans for employers and dependents. ERISA preemption sometimes won’t occur in the case of complaints from actual employers or their dependents, but it depends on the circumstances.

As you might imagine, there’s quite a bit of nuance and complication in the law. Anyone who’s ever unsure what kind of policy they have should talk to an expert so that they know what they’re dealing with if they decide to sue.

Whatever you do, make sure you work with a disability expert you trust who knows this area of the law. Don’t play games with your health. 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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Avoiding ERISA Preemption with a Disability Claim (Part 1)

Published on March 21, 2014 by


Most people don’t know that they have an insurance policy that’s covered under ERISA law until they experience a problem with their insurer and decide to try to fight a denied claim. Instead of being allowed to sue for bad faith and get damages above and beyond what their policy is supposed to cover like someone with a non-ERISA plan, their case will be “preempted” and forced into courts that handle ERISA matters.

This means that that the actions available to you will become far more limited – as will the amount that you can expect to get if you win your case. ERISA regulations only call for claimants to get the original benefits that they were entitled to under their policy and possibly have the insurer cover the cost of their long term disability lawyer. But what about your pain and suffering? What if the insurer deliberately denied benefits they should have paid? Shouldn’t they be punished for their actions above and beyond what the policy calls for – and you rewarded for taking them to task? Not under ERISA.

Ways You Can Be Excepted from Preemption

What it boils down to is that you really want to avoid having your case preempted by an ERISA court if at all possible. Sadly, most employer-based insurance plans can’t avoid this fate, but there are some exceptions to the rule.

If you work for the government. Any policies “issued or obtained through a governmental agency” don’t fall under the ERISA umbrella.

If you are employed by a church. Religious organizations are not covered under ERISA.

If you have a Multiple Employer Trust. This type of policy is not considered an ERISA plan.

If the insurance industry set up your plan. ERISA won’t cover these policies; if you’re not sure whether or not your plan falls into this category, an ERISA lawyer should be able to tell you by looking at it.

If the policy is only maintained for compliance. Some employers keep insurance policies just to make sure that they comply with laws on disability, unemployment, and workers’ compensation. If your plan falls under this category and you can prove it, ERISA won’t touch it.

Additionally, some specific types of businesses are also sometimes exempt from ERISA laws. These can include: family businesses, partnerships, closely held corporations, and sole proprietorships.

Next time we’ll continue with five more ways to avoid ERISA preemption. If you’re ever unsure about the type of policy you have, set up a free consultation with a disability attorney. 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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Disability Insurance: What ERISA Remedies Are Available?

Published on March 17, 2014 by

ERISA insurance plan recipients who have been following me for any length of time probably know that they don’t have as many options available to them in regards to suing their insurers. You can’t punish them for acting in bad faith. You can’t get damages. You can’t sue for pain and suffering.

In fact, the only thing that you can really expect if you win your appeal is to get the benefits you should have gotten in the first place and (if you’re lucky) have the insurer pay your legal costs. Still, there are several different codes defining the “remedies” that are available to you, and if you’re considering filing an appeal it’s important that you understand them ahead of time.

The Four Codes Defining ERISA Remedies

  1. 1.      29 U.S.C. 1132(a)(1)(B)
    1. You have the ability to recover any benefits that are owed to you as defined under the terms of your policy
    2. You can enforce any rights that are given by the policy
    3. You can clarify what your rights are to future benefits under the policy
    4. 2.      29 U.S.C. 1132(a)(2) – This code acts as a remedy against a plan’s fiduciary for breach of duty
    5. 3.      29 U.S.C. 1132(a)(3)
      1. You have the ability “to enjoin any act or practice” that goes against either the terms of the policy or any provision in Title I of ERISA
      2. You have the ability to get “other…equitable relief” by:

i.     Redressing plan violations

ii.     Enforcing Title I of ERISA or any policy terms

  1. 4.      29 U.S.C. 1140 – You have the ability to bring a suit against anyone who blocks the rights that you have been granted under ERISA or the terms of the policy.

What the Four Codes Really Mean

All of that sounds really nice, but in many ways it’s just stating the same thing four different ways. Why do I say that? Because the result for you is always the same if you win – all you can get are the benefits you should have already gotten and money to cover your legal costs.

Still, it’s valuable to know so that your attorney can attack and reference the appropriate codes when filing the lawsuit and preparing your strategy. In these kinds of cases, language and procedure matter, so you absolutely need someone on your side who’s been there before.

Whatever you do, make sure you work with a disability expert you trust who knows this area of the law. Don’t play games with your health. 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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How Does Your ERISA Plan Work?

Published on March 3, 2014 by

If you’re having trouble with your employer-sponsored health plan for a long term disability issue, you’re not alone. Lots of Americans have their claims denied or receive confusing answers from their insurers, and because they don’t really understand how a health plan covered under ERISA law works, they often don’t know what to do to fix the problem.

That’s why I decided to break down the basics of how most plans under ERISA are set up. It’s not going to make you an expert, and you definitely still want to work with an attorney if you need to file a lawsuit against your insurer, but hopefully it will at least make some things clearer.

The Basic Setup for Plans Covered By ERISA

The first and most important thing to know is that if you get insurance from an employer, you most likely have a plan covered under ERISA law. After that, you have to understand that you’re probably going to need to lower your expectations for what you’ll get if you file a lawsuit. Unlike with independent plans, people covered by ERISA can’t sue for punitive damages, bad faith, emotional distress, unfair practices, and many other things that seem like they should be allowed.

How does ERISA insurance work?

There’s a plan. This includes the policy and a “core set of defining documents,” as well as any amendments.

There’s an administrator. Basically, the administrators are the ones who decide if coverage for someone is accepted or denied. Insurers like to be the ones with this power and most of the time it’s given to them.

You have to go through internal review. If your claim is denied and you disagree, you are required to have the denial reviewed internally (i.e. by the insurer) and “exhaust” your administrative options with them before filing a lawsuit. This can be quite time-consuming.

You will get a benefits denial notice. ERISA regulations require insurers to send you a denial notice that explains why you were denied and what options you have to appeal the decision within a timely manner.

If your insurer meets all of the standard requirements, it is vital that you act fast to appeal. Because of this and the specific rules that have to be followed, you want to work with a lawyer experienced in ERISA cases.

Check out our free e-book for more information on ERISA claims and be sure to check back weekly for even more long term disability claim blogs!

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