YOUR DISABILITY PLAN CONTROLS YOUR CLAIM 

A disabling injury or illness can suddenly change your life. Your disability plan may be your only hope for support right now. There are many different types of long term disability plans and it is very important that you carefully review what type of plan you have before and after you become disabled. The plan that is in effect when you become disabled is the plan that will govern your benefits. The following six questions will give you a good start in determining the strength of your long term disability plan. The six questions are:

A. What is the Standard of Review Under the Plan? This relates to how difficult it will be for a judge to overturn the plan administrator’s decision to deny benefits.

B. What is the Definition of Disability? Does your plan definition of disability pertain to full time or part time work, your own occupation or any occupation? How long is the elimination time period and are there limitations for certain physical conditions?

C. What Claims Process is Required? How many appeals will you go through with the plan administrator before you may file a lawsuit?  This is very important.  Courts have dismissed cases for failure to exhaust claims remedies.  By the time the issue is raised in Court it may be too late to go back and exhaust the claims process.

D. Is There a Setoff Against the Disability Benefit? Will only your Social Security benefits be setoff, or will your children’s benefits be setoff against your long term disability benefit? What if you obtain worker's compensation or a pension benefit, will that also be setoff?  Can the company take your Social Security benefit? Click here to read about subrogation and set offs.

E. Is There A Contractual Limitation As To When Suit May Be Filed? A very short time period to file suit may be to your disadvantage.

F. How Often Is The Provider Of Disability Benefits In Litigation? If the company is frequently being sued, that is not a good sign.  Of course, there are many more considerations but these are a good start.  Click here to read more about these questions.

HOW LONG CAN AN
INSURANCE COMPANY
TAKE TO DECIDE
MY LONG TERM
DISABILITY CLAIM?

The time to decide a claim starts when it is filed. Your plan or policy will tell you when a claim must be filed. Once a claim is filed, time frames for the insurance company or administrator to follow set out in the regulations found at 29 C.F.R. § 2560.503-1. 

The insurance company has 45 days to determine your claim.  After your claim is submitted, the insurance company or administrator can state that it needs an extension of another 30 days as long as it does so within the first 45 day time period. There should be good cause for this. Another 30 day extension may also be obtained as long as it does so within the first 30 day extension. This means that when you initially present your claim, it can take up to 105 days for the insurance company to determine your claim.

Additional time may be taken if the insurance company requests information from you and they are waiting for your response. It is therefore in your interest to always promptly respond to requests for information to keep the clock running.

If your claim is denied, then you can appeal or request a review of that decision. I would definitely have an attorney involved at this step in the process. Click here to read why.  Usually, an insurance company or administrator must allow you a minimum of 180 days after the Notice of Denial letter was received by you, to present an appeal or request for review. Once the appeal or review request is received, the insurance company or administrator has 45 days to determine the claim and then it may take another 45 days as long as it notifies the claimant or the claimant’s attorney of the need for an extension within that first 45 day time period.

If the decision takes too long, the claim is deemed exhausted and considered denied according to the regulations. It is possible you may then proceed to court. This may be favorable for the claimant because no discretion is considered to have been exercised when a claim is deemed exhausted. This means that you will obtain a de novo standard of review from a federal court judge or state court judge rather than the more deferential, arbitrary, and capricious standard of review if applicable.
 
To read more about the claims process click here.   For more information go to www.longtermdisabilitylawyer.net.  You can state your view on these and other issues about ERISA at http://erisablog.erisacase.com. 

Do You Have Your Policy or Summary Plan Description?

An important document for a disability claim is the policy, or Summary Plan Description if under ERISA. This is usually the benefit booklet you receive from your employer or the insurance company. If you do not have one you should request one in writing right away. Keep a copy of your letter and proof of mailing including the date mailed.

Under ERISA, the plan administrator is required by law to provide a copy to you. Penalties may be awarded if it is not provided in a timely manner. It is important to have this document in order to know what benefits you should receive if you become disabled. Also, if your case goes into litigation, Courts may require you to show reliance on a policy or Summary Plan Description in order for you to enforce certain terms that are favorable to you. ERISA attorneys know that this key document is vital to your case and will need a copy of the policy or summary plan description in order to help you.

Short Term Disability Plans

Short term disability plans can be governed by ERISA, but it is also possible that they are governed by state law. When they are governed by state law this means that ERISA does not preempt state law. Generally, under ERISA and regulations promulgated by the Department of Labor authorize exemption of certain short term disability plans from ERISA when they constitute “payroll practices.” See 29C.F.R. Section 2510.3-1(b).

To be a payroll practice, generally the money paid must represent an employee's normal compensation, although, it does not have to be 100% according to certain cases. However, the employer must make payment out of the employer's general assets. Finally, the plan must be making payment because of a person's physical or mental inability to perform a job. When a payroll practice falls under state law, this generally means that there is going to be a breach of contract claim litigated in state court. There may be a binding arbitration agreement in a union agreement or employee contract, so that may be the actual venue where the litigation takes place. 

Many times claimants forgo a short term disability claim and as a result, do not qualify for long term disability benefits. It is important to pursue both the short term disability claim and the long term disability claim even simultaneously if necessary. Consult with an experienced ERISA litigator.