The Employee Retirement Income Security Act of 1974 (ERISA) governs more than just employer-sponsored retirement benefits. The law also applies to other key forms of benefits provided by businesses for employees. If a worker’s employment benefits package includes private disability coverage, ERISA rules may also apply to those benefits. ERISA requires that the insurance professionals handling claims look at the needs of the policyholder before considering the financial priorities of the business.
The law also entitles an applicant to an appeal if the insurance company reaches an unfavorable decision about their claim. People usually assume that an appeal should lead to vindication and a paid claim. Yet, things don’t always turn out that way. What options does someone have if their appeal is unsuccessful?
The rules only guarantee a single appeal
Those dissatisfied with the legal decision during a criminal trial may have the option of repeatedly appealing to higher courts to review the decision made by the criminal courts. Those seeking certain types of federal benefits may also have multiple different types of appeals available if their first appeal proves unsuccessful.
Unfortunately, usually a single appeal is all that ERISA guarantees for workers in need of long-term disability benefits. (There are some policies which require two appeals before it considers the administrative process exhausted, so read your policy very carefully.) An insurance company must offer an internal appeals process and review claims made by claimants who assert that the denial of their benefits was inappropriate. The claimant usually has 180 days to file their appeal.
If that appeal is not successful, litigation can still be an option. The evidence that someone submits during an ERISA benefits appeal later becomes the evidence that they can use during a legal case against the insurance company.
Therefore, even if someone is uncertain about their chances of success during the appeals process, it is beneficial to submit as much evidence and documentation as possible before proceeding. If the appeal proves unsuccessful, the frustrated claimant may still have the opportunity to secure benefits by taking legal action against the insurance company.
Such lawsuits differ from internal insurance appeals and can lead to an applicant getting the long-term disability benefits they deserve. Understanding the limitations of the ERISA appeals process – and the need to seek legal guidance accordingly – may benefit those recently denied the benefits they need because they cannot work.