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How the law protects those denied ERISA disability benefits

On Behalf of | Nov 9, 2023 | ERISA |

Having the right insurance coverage can protect people from a variety of challenging scenarios, including situations in which they can no longer work to support themselves and their families. Someone who is temporarily unable to work from due to health issues may apply for short-term disability benefits, for example. Those facing longer-term medical challenges may require long-term disability benefits until they reach retirement age.

The benefits available through Social Security are often not enough for people to live comfortably, so workers may supplement that minimal protection with private insurance coverage. Although some people purchase private insurance to obtain protection from the possibility of future disability, others obtain insurance coverage through their employers.

Workplace benefits are subject to legal oversight

When a business provides short or long-term disability benefits as a perk of employment, federal law actually governs what happens with that coverage. The Employee Retirement Income Security Act of 1974 (ERISA) applies to a host of different important employer benefits. Those with an employer-sponsored disability insurance policy have certain rights and protections under ERISA.

Insurance companies providing ERISA-governed coverage are subject to vastly different regulations than other insurance providers. For example, they have a fiduciary duty to policyholders to act in their best interests instead of prioritizing company profit above all else. What happens if the insurance provider refuses to approve someone’s benefits claim while they are unable to work?

ERISA protects the right to appeal

When people can’t obtain the benefits they need, ERISA guarantees the right to an appeal. If the insurance company denies someone short-term or long-term benefits that they require to support themselves and their families, a policyholder can appeal that decision.

ERISA only allows for a single appeal, and it is therefore very important that people adhere to best practices during the appeals process. They will need to gather evidence to support their claim that the company made the wrong decision. That documentation can be crucial if the appeal is unsuccessful. While it is not possible to demand another appeal, it is sometimes possible to initiate litigation against the insurance provider. In that scenario, the documents used during the appeal will comprise the main evidence for the lawsuit.

Learning more about ERISA protections for those who need disability coverage can benefit those who are not currently able to work due to health issues.