Long Term Disability / ERISA Law

Denial of Long-Term and Short-Term Disability Benefits (ERISA and Non-ERISA)

We handle claims by individuals for non-payment and termination of payment for short-term and long-term disability (STD and LTD) benefits. We represent claimants in denials of benefits under short-term and long-term disability plans, both ERISA (group plans for private employees) and non-ERISA (private and public employee group plans).

What is ERISA?

ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA was enacted by Congress in 1974 to address corruption in pension plans. Although Congress did not intend ERISA to control medical or disability insurance plans when it enacted ERISA, the bill that was signed into law contained the phrase "employee welfare benefit plan." As the result of federal courts' interpretations of that phrase, today ERISA controls almost every private employee benefit, including health, disability, life and pension plans. ERISA includes the federal statute, 29 U S C § 1001, et seq., regulations, which appear in Chapter 29 of the Code of Federal Regulations, and decisional law of the Federal Courts.

When ERISA controls, most other claims are pre-empted. This means that no punitive damages are available, no matter how abhorrent the insurance company's tactics have been and no matter how unfair the denial. The claimant usually can recover only the amount of past benefits due, interest, costs and, in many cases, his or her attorney fees. This provides little incentive for insurance companies to treat claimants fairly. To go one step further, ERISA provides insurance companies with total immunity from any adverse consequences for their unfair and deceptive practices. In our experience, insurers routinely deny meritorious claims, knowing that the vast majority of their insureds do not have the means to fight their insurance plans. No matter how egregious an insurance company's conduct, ERISA provides it with a virtual license to steal.

The Administrative Appeal

If you have been denied STD or LTD benefits, you need to protect your rights. There are important time limits that you must adhere to. For example, the federal ERISA statute requires that the insurance company provide a "full and fair" review of the denial. Ordinarily, you will have 60 days after the insurance company's denial of your claim to appeal the decision (this is an appeal to the policy administrator). The federal courts have required that ordinarily, the decision must be appealed internally before f iling a lawsuit.

The administrative appeal is a critical time in the process and a trap for the unwary. In the appeal, you may submit additional documents and arguments to support your claim. Supportive chart notes, reports from your doctors, written statements by co-workers and others describing their observations of your physical condition, and medical literature describing your condition all can be helpful. It is critical that you get documents supporting your claim into the record BEFORE the insurance company makes its final decision. If you intend to hire a lawyer to represent you, you should do so as early in the process as possible.

If you lose on appeal and your policy falls under ERISA, your only recourse will be to file a lawsuit in federal court. You will not be entitled to a trial by jury. Instead, a federal judge will review only the administrative record that was developed in the claims and appeal process by the insurance company. Thus, for ERISA policies, it is often too late if you wait until after the insurance company has made its final decision to retain a lawyer.

ST&C's Palmer case makes things easier for claimants

In the case of Palmer v. University Medical Group and Standard Insurance Company, [994F Supp 1221 (D Ore. 1998)], we represented a woman who became disabled due to unrelenting back pain. We sued her employer and disability insurance company, which had denied her claim for long-term disability benefits. On January 16, 1998, Magistrate Judge John Jelderks issued his Opinion and Order, which had made several significant changes to claims evaluation under ERISA in the District of Oregon.

How do you charge for legal services?

We know that one of the most difficult problems that many people face is dealing with mounting legal and medical bills at a time when household income has dropped due to disability. We approach each case individually and try to work out a fee arrangement that allows us to handle these important cases without putting insurmountable financial pressure on our clients. Depending on the facts of your case and your ability to pay, we handle disability cases on a contingent fee basis (where our fee is a percentage of back (retroactive) benefits, or, in some cases, back benefits plus some future benefits), hourly fee basis, or a mixed reduced hourly/reduced contingent fee basis. In both ERISA and non-ERISA cases, the court ordinarily will award attorney fees to a litigant who wins his or her STD or LTD case. We do not charge for an initial consultation.

What if I am covered by a private plan or am a public employee?

ERISA covers employer-sponsored benefit plans, but does not apply to individual policies purchased privately on the open market. ERISA also excludes federal, state and local public employees from coverage. For individuals covered under these non-ERISA plans, the claim for denial of benefits is a claim for breach of contract and is tried to a jury in state court. Instead of review of the administrative records by a federal judge, the jury will be asked to determine whether the claimant is disabled, as that term is defined under the policy. The jury is allowed to consider evidence outside the "administrative record."