If you receive disability insurance through your employer, your claim is likely governed by ERISA—the Employee Retirement Income Security Act. ERISA creates a unique legal framework that differs significantly from other insurance disputes. Understanding ERISA's impact on your claim helps you navigate the process effectively.
What Is ERISA?
ERISA is a federal law governing employee benefit plans, including employer-provided long-term disability insurance. If your disability coverage came through your job, ERISA almost certainly applies. Individual policies purchased directly from insurers aren't covered by ERISA.
ERISA creates federal jurisdiction—claims are handled in federal court, not state court. It also preempts most state law remedies, which significantly affects what you can recover.
The Administrative Record
ERISA claims are different from regular lawsuits. Courts generally limit their review to the "administrative record"—the evidence and documents in front of the insurance company when they made their decision. New evidence not submitted during the claims process usually cannot be considered.
This makes the claims process critically important. Everything that supports your disability must be submitted during the administrative process, not saved for litigation. Build the strongest possible record before denial becomes final.
Standard of Review
How courts review insurance denials depends on your policy language. If the policy gives the insurer "discretion" to interpret the plan and decide claims, courts apply abuse of discretion review—very deferential to the insurer. Under abuse of discretion, you must show the insurer's decision was unreasonable, not merely that you disagree.
If the policy lacks discretionary language, courts apply de novo review—deciding for themselves whether you're disabled. De novo review is more favorable to claimants.
Mandatory Appeals
ERISA requires you to exhaust administrative remedies—complete internal appeals—before suing. If you don't appeal through the insurance company's process, your lawsuit will be dismissed.
Appeals are your chance to strengthen the administrative record. Submit additional medical evidence, vocational evidence, and arguments addressing the reasons given for denial. Treat appeals seriously—they're not just formalities.
Limited Damages
One of ERISA's most significant impacts is limiting recoverable damages. Under ERISA, you can generally only recover benefits owed plus attorney's fees. You cannot recover emotional distress damages, punitive damages, or damages for insurer bad faith—remedies available in regular insurance disputes.
This damages limitation removes financial incentive for insurers to treat claims fairly. They can deny legitimate claims knowing the worst outcome is paying what they owed anyway.
Conflict of Interest
When the insurance company both decides claims and pays benefits, an inherent conflict of interest exists. Courts must consider this conflict when reviewing decisions, though how much weight it receives varies by circuit.
Evidence that the conflict actually influenced the decision—like relying on biased medical reviewers or ignoring favorable evidence—can help overcome deferential review.
Protecting Your ERISA Claim
Document everything thoroughly from the start. Obtain detailed statements from treating physicians specifically addressing your policy's definition of disability. Get functional capacity evaluations. Submit all medical records, not just summaries.
Respond completely to insurer requests for information. Incomplete responses give insurers grounds for denial. If requests seem unreasonable, explain why you can't comply rather than ignoring them.
Meet all deadlines. ERISA plans have strict timelines for appeals—missing them can forfeit your rights.
The Claims Review Process
Insurers must follow certain procedures under ERISA. They must provide reasons for denial, give you access to relevant documents, and allow adequate time to appeal. Procedural violations can affect how courts review the decision.
Vocational Evidence
Long-term disability policies often shift from "own occupation" to "any occupation" coverage after a period. Vocational evidence becomes crucial for proving you can't perform any work. Consider vocational expert reports addressing your work capacity given your limitations.
Getting Legal Help
ERISA claims require specialized knowledge. Attorneys experienced in ERISA disability know how to build administrative records, handle appeals, and litigate in federal court. Given ERISA's complexity and limited remedies, professional representation significantly improves outcomes.