logo

ERISA Disability Insurance Appeals vs Private Disability Insurance Appeals

Nov 09, 2020

DL Law Group

Our San Francisco ERISA Attorneys Explain the Differences

Life after an illness or injury can be far more difficult. For some people, the prospect of working at a regular job is no longer possible. Some people may purchase disability insurance to cover a portion of their expenses should they become ill or seriously injured. In other cases, employers may offer disability insurance for these purposes.


Insurance companies are primarily concerned with making money. Unfortunately, this means an insurance company may unfairly deny a disability claim when you need it most. Your options for appealing a denied claim may vary depending on whether your policy is privately held or offered through an employer.


Employer-based insurance policies fall under ERISA’s umbrella. ERISA, also called the Employee Retirement Income Security Act of 1974, is a federal law that covers benefits packages offered by employers. If you have a private plan that you purchased on your own, then ERISA would not come into play during the appeals process.


ERISA Disability Appeals and Bad Faith

If you have a long-term disability insurance policy through your employer, chances are ERISA will come into play should you have to go through the claims appeals process.


You have the right to file an appeal if your policy carrier denies your claim. Depending on the circumstances, you may be able to appeal the carrier’s decision. If your injury occurred due to your job duties, then you have to go through your employer’s workers’ compensation carrier instead.


Insurance companies may wrongfully deny your claim through a process called “bad faith.” If your employer’s carrier is guilty of insurance bad faith, then you may be unable to file a bad faith claim. ERISA is a federal law that does not protect policyholders against bad faith. Since it is a federal law that trumps California state laws on bad faith, you may have much more difficulty recovering what you are owed under the policy.

Even if you succeed in appealing the denied claim, the insurance carrier only has to pay what they should have paid out originally. You would be unable to recover damages caused by the bad faith denial. You can learn more about ERISA policies and bad faith on our website.


Private Disability Insurance and Bad Faith

If you have a disability insurance policy that you purchased privately, you have more options during the appeals process.


California law governs private insurance policies, so restrictions on insurance bad faith apply. If your carrier denies a claim in bad faith and attempts at appealing the denial are unsuccessful, then you may be able to hold the carrier accountable for a breach of contract. Unlike with an ERISA policy, you could recover what the carrier owes you under the policy and additional damages from the bad faith claim. Our San Francisco bad faith attorneys can help you determine whether it is possible to sue an insurance carrier for a breach of contract.


Contact Our San Francisco ERISA Attorneys to Learn More

Questions about appealing a disability claim? We encourage you to contact DL Law Group for a free initial consultation. We can explain your potential options for appealing the claim. To schedule a consultation with us, dial (888) 910-3980 or use the contact form on our site.

RELATED POSTS

What Is an ERISA Plan?

By DL Law Group • 15 Jan, 2022
ERISA stands for the Employee Retirement Income Security Act of 1974. It is a piece of federal legislation that governs employer-provided benefit plans. It sets up minimum standards that employers must adhere to when they offer their employees benefits. These standards include: Informing employees of their benefits packages Requiring that insurance providers and administrators follow strict policies for managing employee benefits Employees may receive legal recourse through federal court

Proving Pattern And Practice Depositions, Documents and Experts

By DL Law Group • 06 Dec, 2021
Discovery is tedious, monotonous, boring, repetitive, time consuming and unexciting. Nevertheless, most victories at trial or good settlements depend on the quality of the discovery that takes place before. Plaintiffs’ firms are usually much smaller and have fewer resources than defense firms. Therefore, from a plaintiff’s perspective, much discovery is defensive-fending off the massive discovery requests. Plaintiff’s, however, are increasingly using discovery in a cost-effective and offensive manner.  For example, let’s say you file multiple claims in different cases or jurisdictions against the same corporate defendant. These often involve essentially the same or similar allegations. Thus, it makes little sense to depose the same witnesses over and over again. Likewise, where internal company documents are an important part of the litigation, it makes no sense to have to separately depose the custodian of records repeatedly in order to establish authenticity. In addition, many businesses face mergers and acquisitions. Unfortunately, this means litigants increasingly find that the company they thought they were suing has been acquired, merged with or sold to another entity. Often key officers and managers that were part of company number one, continue in their role with companies two or three. Attorneys may try to hide the ball on this issue. This is especially true if they are aware that a predecessor corporation or individual managing agents may have previously made damaging admissions.

Can I Pursue A Bad Faith Claim Under Erisa?

By DL Law Group • 26 Oct, 2021
Insurance benefits operate as a contract between the policyholder and the insurance company. The policyholder pays premiums over time in exchange for coverage later if needed. This contractual understanding leaves many individuals shocked when their claims later get denied . Insurance companies must weed out invalid claims to protect the insurance pool. However, they may also engage in bad faith tactics to intentionally deny valid claims. In this situation, the policyholder may file a bad faith lawsuit for damages . This option is only available to people with certain types of policies. Below, our insurance lawyers in San Francisco explain bad faith claims under ERISA. Individual Insurance Policies vs. Group Plans The type of insurance plan you have directly affects your options for disputing a bad faith denial. You should determine whether your plan is an individual policy or a group plan. An individual insurance plan is not purchased through a group or employer. Typically, individuals purchase individual policies if they are contract workers, self-employed or desire supplemental benefits. Individual insurance plans are subject to state laws, including laws about bad faith practices. Plans purchased through a group or employer , however, are subject to a federal law called ERISA. Within this law is a provision about preemption. Essentially, ERISA pre-empts, or trumps, any state laws about the benefit plan. This means that plans subject to ERISA do not play by the same rules as individual plans when it comes to bad faith claims. Can I File a Bad Faith Claim Under ERISA? While ERISA was initially designed to protect certain workers’ benefits, the law does not protect policyholders against bad faith. In other words, you cannot file a bad faith claim under ERISA. If ERISA governs your policy, then your options for overturning a denied claim differ in significant ways. Further, recoverable damages are significantly limited. ERISA damages only include the amount owed under the insurance contract, and sometimes attorney’s fees. An insurance company is not punished for getting caught denying a group policy claim in bad faith. They must pay out what they should have paid out originally. Can I File a Bad Faith Claim Under an Individual Policy? State laws cover individual policy claims for a breach in contract. This means states can hold insurance companies accountable for engaging in bad faith practices in regard to a contract. Damages awarded in these cases may include: Punitive damages Attorney’s fees Awards for other costs Prejudgment interest Secure Your Insurance Benefits With Help From a San Francisco ERISA Attorney While pursuing a bad faith claim under ERISA is not possible, you still have options . Your best bet for overturning a denied claim is to work closely with an experienced ERISA attorney. After a denied claim, your next step is to appeal the decision, but the appeals process is also subject to ERISA. The appeals process is your very last chance to submit new evidence for your claim. If your appeal fails, then you can sue the insurance company, but your suit cannot introduce new evidence. For this reason, you will want an experienced San Francisco ERISA attorney on your side. Schedule a free consultation with us to learn more about DL Law Group’s legal services. You can contact us by phone at (888) 910-3980 or through our online messaging porta l .
More Posts

CONTACT US FOR A FREE CASE EVALUATION

You Won't Pay Until We Win

Contact Us

Share by: