Four Challenges Consumers Face With Group Disability Policies and ERISA
Basic disability monthly benefits are the same under most individual or group long-term disability insurance plans—that is, you should receive income-replacement payments if you are sick or injured and rendered either totally or partially disabled. Each individual or group long-term disability insurer will draft specific contractual language that will govern your claim.
While it is great to have coverage, insurance policies are not always drafted with your best interest in mind. You do not want to take a financial hit after an injury or prolonged sickness limits you from working. Let’s discuss four challenges you may encounter when filing a disability claim with your group carrier.
1. Understanding The Definitions
Many clients come to us shocked to learn their condition did not qualify as disabling under their individual or group policy. The hard lesson was that essential terms like “injury” do not always mean what you think. Even a Webster’s Dictionary definition is not always the ultimate authority.
Below are examples of commonly misunderstood terms in group long-term disability insurance policies:
- Disability– Generally defined as when an individual or employee is (1) unable to perform the important duties of his or her regular occupation as a result of a qualifying injury or illness or (2) cannot earn a certain percentage of his or her income working in his or her regular occupation at the onset of the claim.
- Pre-existing condition– An injury or illness for which you either (1) sought treatment or consultation, took medication, or (2) reasonably should have sought treatment within a specified period prior to your disability insurance’s effective date. This timeframe will vary depending on your particular individual or group long-term disability insurance plan language.
- Injury– Accidental bodily harm resulting directly from a qualifying accident.
- Regular occupation– The occupation in which you were working when you became disabled. Occupation in group (Employee Retirement Income Security Act) ERISA policies is generally defined by how that work is performed in the national economy, not by the tasks you are doing for your specific employer.
The list above is not finite. Even common terms like “employee,” “income” and “physician” can be ambiguous and there are variants of the definition of “occupation.” Consulting with a disability insurance lawyer will help you understand the features, advantages, and limitations your policy contains.
2. Limitations
The more restrictive your policy is with regard to its definitions and features, the less access you will have to its benefits. Understanding the scope of your regular occupation and the definitions above will clarify your perspective on your job and how it will be impacted by a disabling injury or illness.
For example, some group disability insurance policies may define your regular occupation as the occupation you specifically perform. This definition can prove crucial in your fight for group long-term disability benefits. For example, assume you are an accountant and also provide concierge services to your clients by driving to their homes and offices while carrying their heavy files. If you break your leg and can’t, which most accountants around the country do not ordinarily do, then your eligibility for group long-term disability benefits will hinge on the definition of this term.
3. Establishing Financial Security
When long-term group disability benefits pay you less than you need to get by, you may consider purchasing an individual disability insurance policy from an agent or broker to supplement your income if you become disabled. These individual disability insurance policies are not generally governed by ERISA or its onerous restrictions, and if you paid the premiums, the benefits generally flow tax-free.
4. ERISA and Trial Challenges
Denials are par for the course when it comes to ERISA. Plus, you typically will not be granted a trial with witnesses and a jury, and there is a limited amount of justice you can achieve regarding financial recovery.
Your ERISA administrative appeal following the initial group denial is the very last chance you have to make your case because whatever information is not included with the administrative appeal will not be considered later when your ERISA complaint is filed. Do not try filing an administrative appeal alone. Partnering with a skilled and experienced ERISA long-term disability lawyer ensures you will provide comprehensive medical, financial, and vocational evidence to support your claim.
Contact a Disability Claims and ERISA Lawyer
Understand your policy and your consumer rights before filing a valid claim for individual or group long-term disability benefits. Our experienced Los Angeles ERISA attorneys and award-winning individual disability attorneys at DarrasLaw can review the terms of your disability insurance policy, help you understand your rights, and recommend claim suggestions.