ERISA stands for “The Employee Retirement Income Security Act of 1974.” That act covers many employee benefits, one of which is private employer disability insurance policies.
There are two types of disability insurance policies, only one of which is governed by ERISA. One type is given to public employees (school teachers, police officers, firefighters, etc.). These are not ERISA governed. The other type is given to private employees (General Electric, Verizon, Comcast, etc.). These are governed by ERISA. The distinction is important.
So what does ERISA coverage do? Well, it does many things. Let’s talk about what happens in NON-ERISA cases to illustrate what ERISA does.
In a NON-ERISA covered claim, the claimant has no rights. The insurance policy specifies everything involved in the claim. There are no “outside rules.” Most likely this means the following:
ERISA gets you rules, and it gives those rules some teeth (if an insurer breaks them). In general, ERISA is considered to be a very weak law that largely favors insurers.
This is the process with an ERISA covered claim:
Tons of case law exists which expands the rules governing ERISA covered claims. This case law may, or may not, be held to apply to NON-ERISA covered claims. This case law can be very important. For example, some case law says “Fibromyalgia is a legitimate disabling condition,” or “failure to consider reviewing an expert’s bias makes a decision unreasonable.”
What does all this mean: There are benefits to both types of claims. With NON-ERISA cases, you lose some rules, but you get a trial by jury. The distinction, however, is hugely important and determines everything. Furthermore, not all attorneys will know how to handle both types of cases. Be prepared ahead of time, know what type of claim you have.
Being covered by ERISA is supposed to be a benefit. Unfortunately, It’s more of a double-edged sword.
If you have questions about ERISA long-term disability cases, you can order our free report on long-term disability claims. If your claim has been denied and you would like to have your denial letter reviewed for free, call us and we will connect you with the expert ERISA team.
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