The Employee Retirement Income Security Act of 1974 (ERISA) is a crucial legal protection for modern employees. Companies often attract the best workers by offering competitive pay and a comprehensive benefits package. The most common and useful employee benefits include disability insurance and pension contributions. ERISA applies to both of those types of benefits.
ERISA establishes several legal requirements for benefits claims. The company offering the policy has a fiduciary duty to act in the best interests of the person who holds the policy, not the insurance company. If an insurance provider denies a claim, a policyholder typically has the right to file an appeal. Unfortunately, the law only mandates one appeal, and the process is an internal one at the insurance company.
What option does someone have after a denial of their short-term or long-term disability benefits governed by ERISA?
Failed appeals may lead to court
Insurance providers do not need to offer more than one appeal after denying someone’s claim. Therefore, applicants usually need to be as thorough as possible when submitting paperwork for an internal appeal of an unfavorable decision for a long-term or short-term disability benefits claim.
Submitting adequate documentation affirming with severity of someone’s medical condition is of the utmost importance for obtaining favorable results during an ERISA appeal. The evidence submitted during the appeals process can also help someone if the insurance company still does not make a decision that is in their favor. Specifically, evidence submitted during the appeals process can also play a role in insurance litigation which may follow a denied benefits claim.
The civil courts typically can only consider evidence that the insurance company had access to during the appeals process when evaluating whether the insurance provider violated the law and the company’s own policy with a wrongful denial of benefits. Many people give up after a denied claim, and even more may decide not to pursue the matter further after an appeal proves unsuccessful.
Those who are unfamiliar with their rights can end up at a major disadvantage when they cannot secure the benefits that they deserve because of their employment history. People need information about ERISA and about their policy if they hope to secure benefits when they become unable to work due to medical issues.
Understanding what happens during and after an ERISA appeal may benefit policyholders. Those who take the time to learn about ERISA and disability benefits may have an easier time responding to an unfavorable decision made by an insurance company.