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 (415) 678-5050 or use the contact form on our site.