The average working professional doesn’t bother learning much about disability insurance and the laws that govern such benefits. Most professionals don’t even realize how little they know about their job benefits until they find themselves in need of support because a medical condition has affected their job performance or daily lives.
For those who have disability insurance offered through their employers, the Employment Retirement Income Security Act of 1974 (ERISA) may influence what happens during the claims process. Although ERISA primarily relates to retirement benefits and pensions, the law also applies to those who need employer-sponsored disability benefits.
What makes an ERISA benefits claim different from any other disability benefits claim?
- The law requires certain disclosures
Employers and the insurance companies that they purchase coverage from have to provide clear information to the workers with benefits. There should be a written policy explaining what you need to do to successfully bring a claim and giving you information about what happens if the result of your claim is initially a denial and not an approval.
- The law imposes a duty on plan managers and employers
Insurance companies do need to comply with the law, but they have the right to put the company’s profit incentive ahead of the interests of consumers so long as doing so does not run afoul of bad faith insurance laws. The same is not true during a claim for ERISA-governed disability benefits.
Under ERISA, insurance companies and plan administrators have a fiduciary duty to beneficiaries or plan members, which means that they must put the best interests of those workers first. When a company deviates from this standard, its actions may facilitate a claim by the affected worker.
- The law protects your right to appeal
An unfavorable determination related to your disability benefits claim might leave you in a very difficult situation where you have no resources to cover your regular household expenses. ERISA grants the right to an appeal to those denied benefits, which is key for your protection, especially in cases involving unusual or severely debilitating medical conditions.
The law largely seeks to protect you as someone in need of disability benefits provided by your employer. Learning more about how ERISA helps you will lead to an easier ERISA-governed disability benefits claim.