HomeNewsHow Do ERISA Disability Plans Differ From Individual Plans?

How Do ERISA Disability Plans Differ From Individual Plans?

As with any other type of insurance, you may have many options when selecting long term disability insurance, which provides benefits in the event you become disabled and cannot work for an extended period of time. There is the option to purchase an individual insurance policy on your own by simply choosing a provider, signing a contract, and paying premiums directly to the insurance company. However, in many cases, your employer may provide a group plan for long term disability insurance. If you choose to participate in a plan through your private employer, the plan will be regulated by the Employee Retirement Income Security Act (ERISA), which is a federal law enforced by the Department of Labor.

There are many important differences between ERISA long term disability plans and individual plans, many of which can affect your benefits should you become disabled. Some examples of differences include the following:

  • ERISA plans often define “disability” more narrowly than individual plans, and provide more basic coverage for a lower cost. Individual plans can be more tailored to possibly cover additional disabilities for a higher premium.
  • ERISA plans are generally paid with before-tax dollars and individual plan premiums are paid with after-tax dollars. ERISA benefits are taxed as income, while individual benefits are not taxed at all.
  • ERISA sets out specific claim procedures for all plans, while individual plans can set their own claims process.
  • If you want to appeal a claim denial under an ERISA plan, you must first exhaust all administrative and internal appeals before you have the right to file a legal claim in court, which can significantly delay benefits. In addition, you usually may not present any new evidence if you do file a lawsuit, and the court may only review the administrative decision. Appeals of claims under individual plans do not have these restrictions.

While ERISA plans do have more procedures to follow and more restrictions on appeals, these plans can be an affordable way to obtain important long term disability insurance. If you are unsure whether an ERISA plan is right for you, you should discuss your options with a quality long term disability insurance lawyer who understands ERISA benefits.

Discuss Your Claim With An Experienced Chicago ERISA Attorney Today

Long term disability plans that are provided through your employer and governed by ERISA can be very different from plans that you purchase on your own. If you have any issues regarding your long term disability group benefits, it is important to consult with a long term disability attorney who has specific knowledge of ERISA. ERISA is a complex law that can have many implications in your case, and many lawyers who handle cases involving individual disability plans may not be able to adequately handle a case involving ERISA. At Bartolic Law in Chicago, we focus on ERISA cases and have the knowledge and experience to assist you with an ERISA long term disability claim. Please call 312-646-4366 to discuss your situation today.

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