This law came into being in the 1970s. It was designed to help protect your pension plans however at the last minute all sorts of employee benefits that lumped into its provisions. What this means, generally, is that if you have a dispute with your insurance company under the plan you must carefully follow the appeal procedures and timelines. Also, if you must litigate your case, you are not generally entitled to a jury trial.
Where Can I Find the Rules about My Long-Term Disability Plan?
Under the law each plan must draft a "summary plan description" which outlines both the benefits and the exclusions of your plan. Further because you exactly what you must do if you have a dispute with a benefit determination. It also tells you when you can sue in court.
Why is ERISA are so bad for me?
The worst part about this law is that it allows the insurance companies to draft a benefit plans with little governmental oversight. Many people do not realize how little coverage they actually have with a group long-term disability insurance policy. Further, an insurance company is allowed to draft into the plan a "discretionary clause" which says essentially this-if you disagree with our decision you can sue us but a federal judge does not determine whether we were right or wrong but only whether we were within the "bounds of reason" in determining your claim. This really tilts the playing field in favor of the insurance companies.
What damages can I recover if I must sue my insurance company for disability benefits?
This is where it really gets bad for the consumer.if an insurance company under a group long-term disability policy denies your claim and you must sue, the only thing you can win if the benefits they agreed to pay you in the first place. Sometimes a judge may award you your attorneys fees as well. There are no "bad faith" damages or any damages allowable for your mental distress at having had no income and the disability for years on end.
Additional resources provided by the author
for more information about long-term disability insurance claims you can get a copy of my book "Robbery without a Gun, Why Your Employer's Long-Term Disability Policy May Be a Sham."
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