Are Athlete Disability Claims subject to ERISA?
Professional athletes understand that injuries are guaranteed in their line of work. As a result, many pro athletes or their teams purchase private individual disability coverage to protect their livelihood and income from the risk of physical disability.
However, some athletes may also take advantage of disability plans provided by professional sports associations. Many do not realize these plans are subject to ERISA, a federal law that makes it extremely difficult for athletes to collect long-term disability benefits.
What is ERISA?
The Employee Retirement Income Security Act was passed in 1974 to protect workers’ pension benefits from the grasp of large companies by standardizing the administration of employee benefit plans. However, amendments added to ERISA in the 1990s applied the law to life, health and disability insurance in all 50 states.
Unfortunately, insurance companies and federal courts use ERISA to limit the rights of policyholders and to preempt and supersede state laws and consumer protections that “relate” to employee benefit plans.
Nearly all employer-sponsored and group long term disability plans are subject to ERISA. This includes group benefits plans administered by professional athletic associations like the NHL, NFL, MLB and NBA.
How ERISA affects disability claims
ERISA strips away most of your consumer rights and legal protections. If your disability claim falls under ERISA, you have no constitutional right to trial by jury, and no right to sue unless your first exhaust all of the policy’s administrative remedies.
These remedies generally require you to appeal within 180 days or less from the initial denial, and you must appeal as many times as the plan requires within its timelines. These appeals often cause long delays that force many disabled claimants into serious financial problems that often lead to stained credit and bankruptcy.
To make things worse, you also lose the right to ask for real damages, including punitive, bad faith, emotional distress and extra contractual damages, even if the carrier slowly pays or unreasonably denies in bad faith. There is also no right to accelerate your future benefits if you were unfairly denied.
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How to strengthen your ERISA disability claim
Know and meet all deadlines.
You will have numerous time-sensitive deadlines to meet during the claims process, and missed deadlines are the easiest way to ensure a denial of benefits. Identify and stick to all relevant deadlines outlined by your policy; missed deadlines will kill your claim for benefit faster than you can ask, “Should I have gotten help?”
ERISA requires insurance companies to make a decision within 45 days of the claim filing date. This deadline can be extended another 30 days as long as the claimant is notified. If the insurance company denies a claim, it must provide the claimant with a written explanation.
Make the most of your appeal.
If your claim is denied, you have 180 days to file an administrative appeal. Upon receiving a denial letter, many claimants mistakenly believe that all they need to do is write a one-line appeal statement to the insurance company asking to have the claim re-reviewed.
However, in ERISA disability insurance claims, the administrative appeal is your only opportunity to provide supplementary evidence of your occupation, medical and vocational demands, and an outline of pertinent ERISA law in your local circuit.
This additional information becomes crucial if you need to file a lawsuit later on. Any information submitted with your appeal will be included in the administrative record, which is the insurance company’s file on your claim. This is important because the judge will only review your administrative record during the ERISA case; generally, the court will not allow introduction of new evidence.
Your appeal must also refute all the insurer’s reasons for denial. These reasons, which are listed in your denial letter, must be refuted by rational, comprehensive, and persuasive arguments and supported by credible, objective evidence. You can also ask your insurance company for copies of relevant claim documents, including its medical reviews of your records that led up to the denial.
Appropriate supplemental evidence may include:
- A detailed, accurate description of your occupational duties and demands, both physical and mental
- Objective medical testing
- Detailed opinion letters from all your treating doctors, and why their education, training and
experience trumps the insurance company’s doctors - Functional capacity evaluations and vocational testing
- Video testimony from your family, employer and co-workers
Video testimony should cover who you were prior to disability, what your occupation entailed and why you loved it, and activities you were able to do before your disability and are unable to do now.
Since there is no trial under ERISA where family, friends and coworkers can testify, it is crucial to include their observations and opinions in the appeal.
If you seek legal counsel, find an experienced ERISA lawyer.
While many people choose to handle their ERISA claim on their own, these claims can be difficult to navigate without proper legal help. If you decide to seek legal counsel, make sure your disability insurance attorney is experienced in handling ERISA-governed claims nationwide.
Look for a top-rated ERISA disability attorney who understands the procedural hurdles and can assist you in any stage of your claim, whether you are filing the initial paperwork, appealing a wrongful denial or filing a lawsuit.
If you need help with your ERISA-governed disability insurance claim, contact DarrasLaw for a free consultation.