Many employees receive an ERISA short-term disability and/or long-term disability insurance policy as a part of their employee benefit plan, but they don’t know exactly what they are entitled to when the time comes to apply for disability benefits. If you are thinking about applying for ERISA disability benefits, you should consider the following important facts:
- Your Eligibility to File a Claim for ERISA Disability Benefits
Your eligibility to file a claim for ERISA disability benefits depends on whether you meet the coverage requirements in the disability insurance plan. Some plans only cover employees who work a minimum number of hours (e.g. “Employees working a minimum of 30 regularly scheduled hours per week.”) whereas other plans cover employees by the type of work they perform (e.g. “All active, Full-time Employees of the Employer classified as Senior Director level 10 and above and regularly working a minimum of 20 hours per week.”).
In addition, many plans have an eligibility waiting period which requires you to work a certain number of days before being able to establish eligibility for ERISA disability benefits (e.g. “If the Covered Person is employed by the Sponsor on or after the policy effective date – First of the month following the date of hire.”) Note that a “policy effective date” can be different from your date of hire.
- Whether ERISA Disability Benefits Are Payable
ERISA disability benefits are payable if a claimant meets the disability insurance policy’s Definition of Disability AND if the claimant’s medical condition does not fall within one of the Exclusions or Limitations of the disability insurance policy.
- Your Disability Insurance Policy’s Definition of Disability
The Definition of Disability sets forth the standard that a claimant must meet in order to be found “disabled” under the disability insurance policy, and therefore eligible for either short-term disability or long-term disability benefits. The Definition of Disability is based on whether a claimant is able to perform the material duties of his or her own occupation, or any occupation, depending on the wording of the policy. A claimant can also be found disabled if s/he is unable to earn a certain percentage of pre-disability earnings.
It is important to note that in most disability insurance policies, the Definition of Disability can change after a certain amount of time (e.g. 24 months) from the less stringent “own occupation” standard to the “any occupation” standard. Many claimants who are disabled from performing their own occupation can still face termination if they are found capable of performing other work at the time of their 24-month review.
- Whether Your Claim Falls Under an Exclusion or Limitations Clause
Many policies have Exclusions and Limitations that can limit or prevent you from receiving monthly ERISA disability benefits. An Exclusion identifies conditions for which a claimant cannot receive disability insurance benefits. Examples can include intentionally self-inflicted injuries, loss of professional licenses or certifications, engaging in violent or criminal conduct, or disability caused or contributed to by an act of War.
A common exclusion that is invoked by insurance companies is the Preexisting Condition Exclusion, which prevents a claimant from receiving benefits if the claimant received treatment for a mental or physical condition during a specified period of time (e.g. 90 days) before his or her insurance became effective. However, this exclusion generally only applies to employees who file for disability insurance benefits in their first year of coverage under the policy.
Separate from Exclusions, Limitations Clauses limit payment of disability insurance benefits for a certain period of time (e.g. 24 months) depending on if your disability is caused or contributed by a specific type of medical condition. Typical medical conditions that invoke limitations clauses include mental disorders and disabilities caused by substance abuse. In addition, some policies include limitations for other conditions such as chronic fatigue conditions, and chronic pain conditions.
- The Amount You Receive in Monthly ERISA Disability Benefits
The disability benefits policy will have a provision explaining the maximum and minimum monthly disability benefits that are payable to you under the policy, usually as a percentage of your monthly earnings from your job (e.g. “66.67% of Basic Monthly Earnings not to exceed a Maximum Monthly Benefit of $10,000.00 less Other Income Benefits and Other Income Earnings.”).
- The Number of Months ERISA Disability Benefits Are Payable
Your disability insurance plan sets forth a Maximum Benefit Period which determines over how many months disability benefits would be payable to you. The Maximum Benefit Period is usually a function of age at which a claimant is found disabled. Typically, your Maximum Benefit Period will be to your Social Security Normal Retirement Age, but there are exceptions.
- Whether Your ERISA Disability Benefits Will Be Offset by Other Public Benefits
Most disability insurance plans have a provision that offsets ERISA disability benefits by other public benefits that you receive, including Social Security Disability Benefits, Social Security Child’s Benefits, and Disability Benefits under Workers Compensation. Your ERISA disability benefits also can be offset by formal or informal sick leave or salary continuation plans.
- When You Should File for ERISA Disability Benefits
You should file your initial application within the time limit established in your disability insurance policy. A Notice of Claim is often required to be filed within 30 days of when you cease working, and Proof of Claim normally must be filed within 90 days after the ERISA elimination period. The ERISA elimination period is typically 90-180 days after the date you cease work.
- The Information That the Disability Insurance Carrier Will Request From You
The disability insurance carrier will likely ask you to provide information regarding your most recent job, including a position description and financial documentation, clinical records from your treating medical providers, an Attending Physician’s Statement from your treating physician explaining the symptoms and limitations that prevent you from working, and information regarding any other public benefits that you are currently receiving.
- What to Do If the Disability Insurance Carrier Denies or Terminates Your Disability Claim
If your application for disability insurance benefits is denied or terminated, you have the right to file an administrative appeal. Generally, an administrative appeal must be filed within 180 days of the denial decision. Under ERISA, you are entitled to a complete copy of the insurance policy and the complete claim file, including all of the medical records that were submitted to the carrier, to use on appeal. You also have the right to file new evidence and argument in support of your application.
- How Soon to Expect a Response From Your Carrier on an Appeal
For ERISA disability insurance policies, a carrier must make a decision on the appeal within 45 days, but it can grant itself an extension of up to an additional 45 days. If the carrier requires additional information before making its decision, the carrier must provide a claimant at least 45 days to provide the requested information.
- What to Do If You Are Denied Again on Appeal
If you are denied again on appeal, some carriers will allow you to submit a second voluntary appeal or to request reconsideration upon submission of new and material evidence of your disability. However, the insurance company is not obligated to reconsider its denial decision if you have exhausted your administrative appeals. If the carrier will not permit a second-level administrative appeal or a request for reconsideration, you will then have to appeal by filing an action in federal court within the time period specified in the Policy (e.g. “three years after the time written proof of loss is required to be furnished.”).
As you can see from the above, winning and keeping disability benefits is not simple. It is vitally important to obtain the insurance policy, frequently referred to as the “Plan Document” or the “Plan” to know what is required of you to win and maintain these benefits. In addition, we strongly recommend that you obtain experienced counsel to assist you through this process.
At Andalman & Flynn, we have helped workers successfully through this process for over 20 years. We know how to maximize your chances of winning.
Andalman & Flynn, P.C. serves clients throughout Maryland and the District of Columbia, offering compassionate, quality service and results-driven representation across a broad range of legal areas. With a concentration on disability benefits law and family law, the firm focuses on cases that impact the rights of everyone, and they are there for clients when responsive legal help is most critical. For more information about Andalman & Flynn, please visit our website or call 301.563.6685.