The Employee Retirement Income Security Act (ERISA) is a law that was passed in 1974 to protect employees when filing claims with group health plans or plans providing disability benefits.
How Does ERISA Help Claimants?
ERISA makes the process of applying for and receiving disability from a private insurer similar to that of the Social Security Administration by:
- Protecting claimants against unnecessary delays by insurance companies in determining their claim
- Guaranteeing a claimant access to information regarding how a determination is made
- Guaranteeing claimants and beneficiaries a full review of any denied claim
ERISA has established the process for claimant application, time frames and procedures for determinations by insurance companies, and an internal appeals process for claimants.
If the internal appeals process has been exhausted, a claimant has the right to file suit against the insurance company in federal court.
Insurance Companies Acting in Bad Faith
Profit-driven insurance companies have found legal loopholes and practices that enable them to circumvent many of the ERISA guidelines established to protect claimants. Insurance companies act in bad faith by purposefully committing fraud or denying legitimate disability claims.
Examples of bad faith insurance practices are:
- A baseless denial of coverage
- Failure to communicate policy information to a claimant
- Denial of a claim without proper investigation
- Untimely or unnecessary delay of determination or payment
- Failure to pay the full value of a claim
- Refusal to enter negotiations or legal procedures with regard to the claim
Long-term disability is based upon the policies set by a private insurer and an employer. Eligibility requirements are specific to the coverage of a policy, so it is important to know the specific conditions and disabilities covered by the policy to determine eligibility.
If you believe that your long term disability insurance company has acted in bad faith by denying your claim, you need to seek the help of a long term disability attorney experienced in ERISA.