Questions you may have about ERISA
as it relates to Long Term Disability claims
Author: Attorney Lonnie Roach
1. WHAT DOES ERISA STAND FOR?
The Employee Retirement Income Security Act of 1974.
Most states have laws which punish insurance companies when they engage in unfair settlement practices and insurance bad faith.
These laws were designed to protect consumers from an insurance company’s wrongful denial of a claim. Unfortunately, most people with long term disability insurance plans whose benefits were either wrongfully denied at the beginning or were cut off later on find that their state’s laws pertaining to insurance bad faith and unfair claims practices do not apply to the long term disability insurance carrier.
Most people obtain their long term disability benefits from their employer and as a result the disability insurance plan is considered an employee benefit plan regulated by federal law.
The federal law which regulates employee benefit plans is the Employee Retirement Income Security Act (ERISA). ERISA was enacted with the primary purpose of establishing uniform standards to be applied to employee benefit plans, including disability plans provided by employers. Many employer benefit plans cover employees in several states and having to comply with each state’s regulations was thought to be too difficult for the plan administrators. It was thought that having a uniform set of federal regulations would not only ease these burdens, but would also give consumers uniform rights.
The way the federal government made ERISA the one uniform law pertaining to employee benefit plans and employer provided disability plans, was to include within ERISA language which pre-empts state law from interfering with these plans.
Unfortunately, ERISA did not provide consumers with the variety of protections that states have adopted to prevent deceptive practices and insurance bad faith. This means that a consumer’s rights with regard to these plans are for the most part governed solely by ERISA. As a result, when a long term disability insurance carrier acts in bad faith and wrongfully or unfairly denies a claim or cuts off or reduces benefits in a LTD plan governed by ERISA the consumer must seek his or her relief within the confines of ERISA.
If you have been denied disability don’t give up! Contact a Disability lawyer at 512-454-4000 for a free consultation and get the benefits you deserve.
ERISA was enacted to ensure that employees receive the pension and other benefits promised by their employers, and to encourage employers to provide benefits to their employees.
Since its enactment, it has been broadly interpreted to cover most employer-provided benefits, including long term disability insurance benefits. Most Americans today receive their health insurance through “welfare benefit plans” that are governed by ERISA. Life insurance and Long Term Disability (LTD) insurance are also commonly provided as employee benefits, and thus subject to ERISA law.
In order to provide a uniform system of regulating employee benefits, ERISA preempts most state laws and regulations that would otherwise govern employer-provided benefits.
While this increases efficiency for multi-state employers and ERISA plans by not subjecting them to differing states’ regulations for the same plans, it unfortunately leaves little in the way of regulation for most of these plans. ERISA was never intended to provide the regulatory framework for day-to-day issues such as administering a claimant’s health insurance claim; that job was traditionally done by the states. In the years since its adoption however, most courts have ruled that state regulations, such as the Texas Insurance Code and States’ common law, simply do not apply to ERISA plans.
2. DO I NEED TO HAVE A LOCAL LAWYER?
No, insurance attorneys with specialized knowledge in ERISA law and long term disability insurance law are far more likely to obtain the maximum Social Security disability and other disability benefits than a local lawyer without the same experience.
Our clients find it very convenient to work with us by telephone and e-mail on a regular basis. If you have been denied disability benefits, you can raise your odds of prevailing by working with a skilled attorney like the insurance attorneys at the disability law firm of Bemis, Roach & Reed. Our law firm’s office is located in Austin, Texas; we represent individuals throughout the State of Texas helping them obtain and recover their needed long term disability and social security disability benefits.
3. UNDER WHAT CONDITIONS WILL THE LONG TERM DISABILITY INSURANCE COMPANY HAVE TO PAY MY ATTORNEY’S FEES?
If your case goes to trial and you prevail, a court can make an award of attorney’s fees.
Remember, different parts of the country have different rules as to grants of attorney’s fees. It is also possible to obtain an allowance for such fees in mediation, though that amount is generally incorporated in a “lump sum” settlement.
4. IF I AM INVOLVED IN A LAWSUIT, HOW LONG WILL IT TAKE TO REACH A CONCLUSION?
The reality is that most long term disability cases settle, but every case is different.
Cases that settle may take 6-12 months, depending on where you are in the appeals process. If the case goes to trial, expect the matter to take more than 12 months, especially if there is an appeal to the Circuit courts.
Bemis, Roach & Reed has successfully handled cases against the following insurance companies:
- Connecticut General Life
- Life Insurance Co. of North America
- Lincoln Financial
- Northwestern Mutual
- Unum Life
- Liberty Mutual
- Life Insurance Co. of New York
- Paul Revere
- Unum Provident
Author: Attorney Lonnie Roach has been practicing law for over 29 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion rated by Martindale Hubbell. Through his extensive litigation Mr. Roach obtained board certifications from the Texas Board of Legal Specialization. Lonnie is admitted to practice in the United States District Court - all Texas Districts and the U.S. Court of Appeals, Fifth Circuit. Highly experienced in Long Term Disability denials and appeals governed by the “ERISA” Mr. Roach is a member of the Texas Trial Lawyers Association, Austin Bar Association, and is a past the director of the Capital Area Trial Lawyers Association (Director 1999-2005) Mr. Roach and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.
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