Imagine this scenario: Awhile back, you got into a pretty serious car accident. Your recovery included a few surgeries and outpatient visits, not to mention countless hours of physical therapy. Right now, you are miles ahead of where you started, but still not quite able to go back to work.
During your recovery, you have been drawing on first the short-term disability and then long-term disability benefits provided by your employer. However, you just received notice that your benefits are being discontinued because your employer's insurance policies have changed, and now you are in fact required to pay back all of last year's benefits due to overpayment.
Is this even legal?
ERISA claims 101
The short and standard lawyerly answer to this question is that it depends. What you likely have is an ERISA claim. You may have come across this term while doing some initial research into what options you have for fighting this sudden denial of benefits.
The Employment Retirement Income Security Act (ERISA) of 1974 governs what employers can and cannot do in relation to certain benefits they provide for employees. Those benefits include retirement benefits like pensions or 401(k)s, health insurance benefits, disability benefits and life insurance benefits.
In general, ERISA requires employers to provide a number of things, including:
- Clear information about the various plans offered and how they're funded
- Accountability for plan managers or those who control assets in the plan (often referred to as fiduciary responsibility, as we discussed back in February)
- A process for and information on appealing denied claims or addressing grievances about benefits management
- Protection from retaliation should employees exercise their right to sue for benefits or because of breach of fiduciary duty
In the scenario above, then, it's possible that your employer's insurer is within its rights to terminate benefits, but it depends on the language in your policy. This is where a lawyer who regularly helps employees with disability benefits issues can help you. He or she can review your policy and other documents carefully and help you determine whether you have a leg to stand on. If you do, he or she can help you gather the appropriate medical documentation and evidence needed to make your appeal.
Important considerations when filing an ERISA appeal
Unlike appeals for Social Security Disability benefits or private long-term disability benefits, ERISA appeals have a few caveats that you should be aware of:
- You may not file a civil lawsuit until you have exhausted all administrative options for appeal.
- Any lawsuits are determined by a bench trial, or a trial held only before a judge. ERISA lawsuits are not eligible for jury trials.
- You cannot seek additional damages beyond what is covered in your plan. Private LTD claims allow you to seek punitive damages for breach of fiduciary duty, for example, but in an ERISA claim, such damages are not available.
Most importantly, you must file an ERISA appeal within 180 days of having your claim denied. Furthermore, if you do not include all pertinent medical records and other evidence in your initial filing, it cannot be added later if litigation becomes necessary.