Employers use many different types of long-term disability plans (sometimes known as income protection plans). Most plans are provided by insurance companies to whom your employer pays a premium. You may contribute money from your paycheck for part of that premium.
When you need to use your disability insurance: navigating the application/appeal process
When you have a long-term disability insurance claim, you must apply to your disability insurance provider within the timeframe stated in your disability plan. Your application and appeal, if necessary, should be based on strong medical support of a condition (mental or physical), which disables you from continuing in your occupation. If you are denied benefits, you appeal to the insurance carrier for reconsideration. If the insurer continues to deny your benefits, you have the right to take your claim to court. When your disability insurance is provided through your employer you must file the lawsuit in federal court.
Federal laws relating to group benefit claims are part of ERISA – the Employee Retirement Income Security Act of 1974. ERISA also sets forth administrative rules for the procedures of handling a long-term disability insurance claim. The rules and regulations set forth in ERISA must be followed, but they are often not what you may logically expect, and are complicated. When appealing a denial you may want to consult with an attorney who specializes in long-term disability insurance claims to avoid your claim being barred by procedural violations.
Typically, you have 180 days to appeal the insurance company’s denial of your benefits. If the appeal is also denied, you may then proceed to federal court for a lawsuit against the insurance carrier, based primarily on the medical records, witness statements, and all other documents contained in the insurance claim file, including internal claims department records. Be aware that in ERISA governed cases (employer provided insurance programs) there are very strict limits on what, if anything, can be used in court outside of documents in the claim file. Thus, it is critical to have all the supporting documentation in your insurance claim file.
Employer provided or group long-term disability policies have many limitations and are often not what they may appear. The benefits you receive may be a fraction of what you thought you would receive if you became disabled from working. You may want to carefully review your policy with a knowledgeable attorney if you believe you may need to file an application for disability benefits.
—Randy Noah, a lawyer specializing in the representation of individuals denied long term disability insurance benefits. For more information please visit prandallnoah.com.