Ten Things to Consider and Look For in Your ERISA Short-Term and Long-Term Disability Plans When Selecting Benefits or You Want to File a Claim

1. Obtain a full copy of your plan and administrative record. The full plan will not typically be a benefit summary or a print-out from a website.  It will be fairly long and many definitions and it will recite your ERISA plan terms, policies and procedures for filing a claim and handling the claim, claim denials, appeals of claim denials, etc.  The claims administrator will likely not have a copy of the full plan.  You can request a copy of the full plan from your Employer’s Human Resources department or often from the claims administrator (the insurer or third-party administrator).  You can request a copy of the administrative record from the claims administrator, which is often an insurance company such as MetLife, Unum, and Liberty Mutual.

2. Read the Plan. Your Plan document controls the rights and obligations of the parties, including all plan participants and beneficiaries.  Thus, if you have an ERISA claim for Short-Term and Long-Term Disability benefits, you should read the plan carefully.  A human resources representative, a customer service representative for the insurance company that administers your disability benefits, or your claims administrator may tell you what your benefits are over the telephone or in an e-mail.  You cannot rely on what a representative tells you over the phone.  The Plan document controls the benefits available, not what someone tells you over the telephone or via e-mail.  If there is any confusion, ask the representative to tell you what specific Plan provision they are referencing and ask them to send you a letter documenting what they are telling you.

3. Understand the difference and transition between Short-Term Disability (STD) and Long-Term Disability (LTD). Be aware that getting STD insurance does not automatically mean that you have LTD insurance.  If you want to ensure financial stability if you suffer a long-term disability in the future, you will want to ensure that you select the appropriate amount of LTD coverage because STD benefits will only last you about three to six months.  LTD coverage will often last until your 65th birthday.  Additionally, some plans provide for an automatic transition between STD and LTD benefits, but others have a gap of time between STD and LTD benefits or require two, separate applications for the STD and then the LTD benefits.

4. Select the appropriate coverage amount. Employers often provide an automatic base STD amount and allow you to opt into higher coverage for STD.  LTD insurance coverage is often optional and offers several coverage levels for the amount of benefits you would like to receive if you become disabled.  Be sure to select the coverage that you want, and make sure you fill out any forms, like a Statement of Health, to ensure that you receive the coverage you select.

5. Confirm your coverage. Get a confirmation of coverage in writing, either a print-out of the premiums that you are paying for each insurance coverage you have chosen through your employer or a certificate that states the exact coverage you receive.  Make sure you always have a current document showing your benefits coverage, which will usually be once a year after coverage selection or two to four months after you begin new employment.

6. Time to appeal a claims decision. Read the appeals or grievance section to determine your appeal rights and deadlines.  The first appeal must be submitted within 180 days of the date you receive the initial denial, pursuant to ERISA.  However, there may be a second appeal, which is sometimes mandatory and sometimes voluntary.  Whether there is a second appeal and whether it is mandatory or voluntary is critical to pursuing your disability claim in court if it is denied.  Additionally, although ERISA requires that you have 180 days to file your first appeal, you may have only 30 or 60 days to file your second appeal.  Be aware that you can and should contact an attorney as soon as you receive any notice, oral or written, from your insurance company that your claim will be or has been denied.  An attorney can help you with your first and second appeals of the denial of your STD and/or LTD benefits, which will also help if you need to go to court to force the insurance company to pay you your benefits because the attorney will ensure that your disability claim record during the administrative appeals is complete and will help a judge understand that you are disabled.

7. Read the definitions. Terms like “disability,” “your occupation,” “physician’s care,” and other words may have special definitions under your policy.  Make sure you know what is required under your plan’s specific definitions in order to successfully claim disability benefits.  You should also look for the “Elimination Period” in your STD and LTD plans.  The Elimination Period is the time period you are unable to receive benefits under that plan, a type of “waiting period.”  For STD benefits, it is often no more than a week.  For LTD benefits, it is often the duration for which STD benefits are paid, so the LTD Elimination Period generally lasts approximately three to six months from the date of your disability.

8. Statute of Limitations and Contractual Limitations Period. These will be the period of time by which you must file a lawsuit to obtain disputed benefits.  To file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two).  The contractual limitations period may appear in a section titled, “Legal Action.”

9. Who is the Plan Administrator? Look for a name and address of the Plan Administrator in the Plan.  If your claim has been denied, send a written request to the Plan Administrator for all plan documents.  The Plan Administrator is required to provide the plan documents to you within 30 days.  29 U.S.C. § 1024.  Federal regulations allow you to file a lawsuit to seek penalties from the Plan Administrator in the amount of $110 per day for each day the plan documents are not provided beyond the 30-day period.  20 U.S.C. § 1132(c)(3); 29 C.F.R. § 2575.502c-1.

10. Calculate your STD and LTD weekly or monthly benefits. STD and LTD benefits may be paid as a percentage (e.g., 50%, 60%, 70%) or multiplier amount (e.g., 1x, 2x, 3x) of your regular earnings.  Your STD and LTD benefits amount may be different depending on what level of coverage you chose in your most recent benefits selection.  For example, you may receive only 50% of your base earnings in STD benefits but 65% of your base earnings as LTD benefits.  Additionally, almost all STD and LTD policies will “offset” your benefits with any other disability-related income you may receive, including SSDI, SSI, and state disability insurance income.  If you apply for LTD benefits, many policies will require that you apply for SSDI, which is disability insurance offered by the federal government.  If and when you are approved for SSDI, that amount will be subtracted from your future benefits payments of your LTD benefits.

If your ERISA claim has been denied, knowing when to sue may be integral to the success of your claim.  It is important to have experienced and highly qualified disability, health and life insurance attorneys, like those at the McKennon Law Group PC.  Fill out our free consultation form today to set a time to discuss your claim with one of our attorneys, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA insurance claims.

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