When you first began working and were offered group long term disability (LTD) insurance as part of your compensation package, you probably did not consider the potential pitfalls you would encounter if you had to file a claim. After all, LTD insurance is supposed to provide an additional income in conjunction with Social Security disability benefits, and who wouldn’t want to have a “safety net” in that regard?
But what you likely did not consider (and were likely not told) that your LTD policy is most likely governed by ERISA, and that there are several downsides to this. First, since ERISA is federal law, in most cases it will supersede state law. This means that claims against an unscrupulous insurer for bad faith and requests for punitive damages may not be available under an ERISA claim.
Even worse, ERISA restricts the procedural options you have in the event you have to file a lawsuit for damages. For example, you are required to submit an administrative appeal before filing suit. If you do file suit, the evidence a court considers may be limited to the materials you have submitted during the claim and appeal. For this reason, obtaining legal help before appealing an improper denial can be critical to establishing a successful claim.
Fortunately, an experienced disability law attorney can help negotiate an ERISA appeal and can also determine whether the claim is not covered by ERISA which would permit an action asserting state law claims, thereby allowing you to seek punitive damages for arbitrary and capricious actions taken to wrongfully deny your claim. If you believe that your group disability insurance claim has been wrongfully denied, or if your benefits have been terminated, we invite you to contact us.