Why You Shouldn’t File an ERISA Lawsuit Too Early (part 1)
Congress passed the Employee Retirement Income Security Act (ERISA) in 1974 to help regulate retirement plans that employers offer to their workers. It was a well-intentioned law that was expanded to cover health, disability, and other insurance plans. ERISA now sets minimum standards that your retirement and other insurance plans must meet to provide workers with adequate protection, but it also makes employees subject to onerous requirements. When workers file claims, the sick or injured often meet swift and unreasonable denials by their own disability insurers because they failed to dot that I or cross that T.
Litigating an ERISA long-term disability (LTD) claim begins after a series of denials. The process can be challenging and begins with establishing and understanding proper timing and avoiding filing incorrectly, as too early and too late have serious consequences.
Let’s look at the requirements for filing an ERISA group disability complaint and what happens if you file suit too early.
Requirements for Litigation
We’ll begin with a simple scenario: a back injury prevents you from doing the substantial and material duties of your occupation, and you file for LTD benefits. Unfortunately, your group ERISA disability claim was denied. Assuming the claim is subject to ERISA, you will have to timely and comprehensively appeal your LTD denial through your insurer before you can sue the insurance company. A prerequisite for filing a suit is to go through the appeals process, which the insurance company typically provides 180 days for you to do.
During that appeal time, you are required to leave no stone unturned as you “exhaust your administrative remedies” in trying to secure denied monthly disability benefits from your insurer. If the insurance company denies your appeal, then it is appropriate to file suit to recover the benefits through a lawsuit, along with interest on the past-due benefits and attorney fees.
Once the ERISA complaint is filed, your disability lawyer must fight for you in court by first demonstrating that you exhausted all required administrative remedies. Second, your lawyer must show that during the appeal process, you provided all the necessary and accurate occupational, medical, vocational and financial information to support your sickness and/or injury.
Your disability lawyer should:
- Cite all appropriate case law
- Provide testimonials and declarations outlining how the injury or sickness has impaired your ability to perform your occupation, or any occupation you have been trained or are suited to do
- Show claim approvals from other agencies, like the Social Security and Workers’ Compensation, or state disability
Your federal judge will apply an abuse of discretion, or de novo standard of review, and will consider the complete underlying file of the policyholder and the disability insurer.
By properly presenting your claim and loading all of the evidence into your appeal, your disability lawyer can help you recover the LTD benefits you were entitled to in court.
Consequences of Filing ERISA Litigation Too Early
Filing a suit too early is a mistake many claimants make. They have the right idea, but incorrectly assume that the initial denial is the time to sue. Insurance companies count on a denied insured to essentially “jump the gun” during the fight for their disability benefits.
Fortunately, hiring and having a disability lawyer in your corner means you have a professional watching the calendar and providing the proper guidance for filing and appearing in court.
The silver lining about filing a claim too soon is that there may still be time to correct it. While a major setback, it’s better to have filed too quickly, revisit the process and exhaust all administrative remedies, than to file too late.
Contact a Disability Lawyer
You expect that your insurance and retirement plans will be there to support you if and when a disability strikes. Unfortunately, that is not always the case.
Your disability lawyer needs ample time to put your administrative appeal together, collect all of the relevant medical, financial, and occupational evidence, and to review the exact terms of your policy. You already have a deadline for your administrative appeal, so giving your lawyer as much time as possible to compile the necessary information is paramount to the success of your administrative appeal and your later ERISA complaint.
Contact one of our Los Angeles ERISA lawyers for a free consultation, policy analysis, or claim help. Our evaluations are always free.