In today’s evolving healthcare landscape, mental health care has taken center stage and our society continues to better understand the effects mental health can have on peoples’  well-being and ability to function productively in daily life and in their work. In recent years, mental health has emerged as a central focus within the disability insurance claims, highlighting both the necessity for comprehensive care and the challenges claimants face when their conditions extend beyond the typical benefit durations.

For many people, mental health issues such as major depressive disorder, anxiety disorders, post-traumatic stress disorder (PTSD), and bipolar disorder are not only life-altering but also lead to significant, long-term disabilities that interfere with the ability to work. For those covered under employee benefit plans governed by the Employee Retirement Income Security Act of 1974, or ERISA, the pathway to accessing mental health benefits can be complex and can include many challenges to receiving these important benefits. A common hurdle in these cases is that most long-term disability policies limit benefits to 24 or 36 months regardless of whether a person remains unable to perform his job due to his mental health condition.

What Is ERISA?

Understanding ERISA is essential to navigating this complex landscape. ERISA is a federal law that sets minimum standards for most insurance plans offered by private employers. ERISA’s primary stated goal is to protect the interests of plan participants and beneficiaries by ensuring that plan administrators adhere to strict standards of conduct and clearly communicate the terms of the plan. While ERISA does not require employers to offer specific benefits, once a plan is in place, ERISA governs how the plan is administered, including how claims must be processed and disputes resolved. This framework is intended to protect the interests of participants and beneficiaries, but when it comes to mental health disability claims, the interpretation and application of ERISA can become particularly complicated.

ERISA and Mental Health Claims

Disability claims are generally challenging and difficult to navigate, which is compounded when the claim involves a mental/nervous condition. Many physical conditions can be objectively confirmed through physical exams and imaging. If you have a bulged disc in your spine, your claim will be supported with x-rays and MRIs. Mental health conditions typically do not present themselves in a way that can be objectively proven. There is no objective physical evidence that can be reviewed for anxiety, depression, PTSD and other mental health conditions, so it is harder to demonstrate to disability insurers that you have such a condition, and if you do, how severe it is and what are your resulting restrictions and limitations. On top of that, the claims process can be incredibly stressful, presenting an additional challenge to someone living with one or more of these conditions.

As noted above, an important feature of mental health claims is that the benefit period is typically limited to 24 or 36 months, whereas physical disability benefits can be paid until the policy term, as long as you are disabled from the condition(s). This limitation can uniquely impact a claimant with a long-term or chronic mental health condition, given the stress that comes with knowing that even if you get all the benefits available to you under the policy, you will receive them for a relatively short time.

Common Challenges with ERISA Mental Health Claims

Insurance companies have a financial interest in denying disability claims, especially mental health claims. This means they will deny such a claim for many reasons, including for the fact that there is no objective evidence to prove a mental health claim. It is common for them to challenge the severity of mental health conditions. They will downplay the medical evidence and take the position that your symptoms are not severe enough to stop you from being able to work in your occupation.  In addition to the benefit duration limitations, here are other common challenges:

·  Ambiguity in Policy Language: The language in disability policies can be vague, leading insurers to interpret the coverage more narrowly than claimants believe is warranted, especially when defining the extent and duration of mental health impairments.

·  Evidentiary Requirements: Establishing the severity and chronic nature of a mental health condition requires comprehensive and detailed documentation. Insurers often challenge whether the submitted medical evidence—such as psychiatric evaluations, treatment histories, and expert opinions—sufficiently proves the claim.

·  Discrepancies in Treatment Expectations: Insurers may argue that the claimant’s condition has stabilized or improved, even when ongoing symptoms persist, which can lead to disputes over whether continued benefits are justified.

·  Inconsistent Application of Standards: Variations in how different plan administrators interpret and apply policy terms can result in inconsistent outcomes, making it difficult for claimants to predict or understand decisions regarding their benefits.

·  Delays and Administrative Hurdles: The process for reviewing and approving mental health disability claims can be lengthy, with administrative delays that further complicate access to timely care.

What to Do If Your Mental Health Claim Is Denied

If your ERISA disability claim is denied or if the insurance company has stopped paying your benefits before the end of the benefit period, it is imperative to understand the timeline you face and act accordingly. When you receive a denial, immediately consult with an attorney with ERISA expertise, like the attorneys at McKennon Law Group PC. You will have 180 days from receipt of a written claim denial to appeal the denial. Keep in mind the amount of time it can take to get all the necessary evidence for your appeal, like your medical records, doctor certifications, personal statements and preparation of strong arguments in support of your claim. Additionally, you should gather documentation related to the policy and document your communication with the insurance company, including calls and any evidence you send them.

If the insurance company denies your appeal, you will be able to bring a legal action against them in federal court. In many cases, especially in California, the court will decide your case under a de novo standard of review, meaning that it will review the administrative record and determine whether you are disabled as defined by the policy without giving any deference to the insurer’s prior decision. The administrative record is all the evidence available to the insurance company when it made its final determination on your claim. Any evidence that supports your claim should be submitted to the insurance company before a final decision is made on your claim. Therefore, it is crucial to gather and organize all the evidence that supports your claim when your claim is denied.

Conclusion

Mental health claims under ERISA inherently present unique challenges for claimants and can be especially stressful relative to physical claims. By understanding the claims process, challenges involved, and the importance of acting quickly to gather your evidence and consulting with an attorney, you can minimize the stress associated with the process and increase the likelihood that you get the maximum benefits available to you.

The United States District Court for the Northern District of Indiana recently examined the issue of determining what constitutes the administrative record where an insurance company fails to meet regulatory deadlines under the Employee Retirement Income Security Act of 1974 (ERISA).  Essentially, this meant that the Court had to decide whether Reliance Standard would be able to introduce evidence before the Court that was gathered after the expiration of the time period to make a decision on the long-term disability (LTD) claim at issue.

In King v. Reliance Standard Life Insurance Company, 2024 WL 5165572 (N.D. Ind. Dec. 19, 2024) the Court decided the issue of whether defendant Reliance Standard Life insurance Company (Reliance Standard) improperly denied plaintiff Megan King’s LTD claim. The case centered around Reliance Standard’s failure to render a decision on her claim within the 45-day requirement of the Department of Labor’s (DOL) ERISA claims regulations.

King became disabled in 2018 and Reliance Standard approved her LTD claim and paid her benefits for four years. In September 2022 Reliance Standard determined King was no longer disabled and notified her that her benefits would be discontinued. King appealed in July 2023. As of September 11, 2023 King had not received a decision from Reliance Standard, nor had Reliance Standard invoked a need for additional time to review her appeal. The DOL regulations require insurance companies to provide a response within 45 days and allow them to take an additional 30 days when they are unable to complete the review due to something outside their control, though they must notify the claimant of the need for this extra time before the 45-day period runs. When King did not receive either a decision or notice of a need for additional time within 45 days, she considered her administrative remedies exhausted and filed a federal lawsuit under ERISA. Reliance Standard denied King’s appeal four months later.

The issue before the court focused on whether evidence gathered by Reliance Standard after the exhaustion deadline could be included in the court’s review. King argued that the administrative record should close once the regulatory deadlines expired, emphasizing ERISA’s strict procedural safeguards. The court agreed, granting King’s motion to exclude post-exhaustion evidence from the record. The court held that once a claim is deemed exhausted, the plan administrator cannot introduce additional evidence to justify its denial.

The court cited Fessenden v. Reliance Standard Life Ins. Co., 927 F.3d 998 (7th Cir. 2019) and determined that because Reliance Standard violated its obligations mandated by the DOL regulations, its late decision is not entitled to the deference provided by the abuse of discretion standard of review. The court therefore determined that the standard of review was de novo. The court further cited Dorris v. Unum Life Ins. Co. of America, 949 F.3d 297 (7th Cir. 2020), noting that the court can limit itself to deciding the case on the administrative record but should also freely allow the parties to introduce relevant extra-record evidence and seek appropriate discovery. The court thus found that the scope of the record is within its discretion.

On this basis, the court found in King’s favor and against Reliance Standard, reasoning that affording Reliance Standard extra time to gather evidence would undercut the benefits of King having exhausted her administrative remedies. The court concluded that Reliance Standard relinquished its opportunity to establish its evidence in the administrative record and that to allow Reliance Standard to submit its evidence after already missing the deadline would circumvent the purpose of the DOL regulation.

The court focused on the evidence Reliance Standard wanted to include in the administrative record and held that if the court allowed the inclusion of post-exhaustion evidence that creates a party’s administrative record rather than supplements it, the court would be impermissibly extending the DOL deadlines.

The King decision demonstrates the importance of understanding ERISA’s complex regulations governing employee benefits such as disability claims and the importance of utilizing the regulations to maximize a successful outcome. McKennon Law Group PC has similarly used this specific ERISA regulation to achieve success in handling its clients disability claims. Having the right ERISA disability insurance lawyer can make the difference between success and failure.