The Employee Retirement Income Security Act of 1974 (ERISA) is one of the most important statutes protecting employee benefits. Under ERISA, companies have certain obligations to employees who earn pensions or other employer-sponsored retirement benefits.
ERISA also applies to short-term and long-term disability coverage. Workers who find themselves unable to perform job functions due to medical challenges may be able to make a claim for benefits. Those in need of ERISA-governed disability benefits should take care to avoid the three common mistakes outlined below.
1. Applying without medical evidence
ERISA protections help workers by imposing certain requirements on insurance providers. The insurance company has a fiduciary duty to policyholders for ERISA-governed coverage. That means the company should make a decision in the best interests of the policyholder.
However, the policyholder has to establish that they have qualifying circumstances. Applying without adequate medical documentation can lead to denied claims and major delays. Applicants generally need compelling medical documentation affirming the extent of their condition.
2. Ignoring medical recommendations
Particularly when workers need long-term disability benefits, medical compliance is crucial for their protection. Insurance providers can sometimes assert that a worker’s continued functional limitations are the result of their refusal to comply with medical recommendations or instructions.
Workers who want to preserve their eligibility for long-term disability benefits need to comply with treatment instructions such as attending physical therapy or undergoing surgery. In scenarios where they question a health care professional’s treatment plan, they may need to seek a second opinion and document doing so instead of simply ignoring the recommendations.
3. Settling the claim early
Disability benefits are often paid regularly until a worker is no longer eligible. Occasionally, insurance companies may offer a lump-sum settlement based on the extent of the injury, the worker’s condition and other factors.
A settlement generally absolves the insurance company of any future liability. Workers feeling the financial pressure of being unable to do their jobs might accept a settlement that is too low given their overall losses.
Those navigating a complex ERISA disability benefits claim generally have the right to retain legal representation during that process. Workers with disabling medical conditions who hire attorneys may have an easier time maximizing the benefits that they receive and minimizing the stress of the ERISA claims process. Getting support early can help people avoid common mistakes that could limit their financial recovery.