Key Differences in ERISA and Individual Disability Insurance Claims

Long-term disability insurance should protect you if you become disabled so that you can no longer work. However, many long-term disability claimants find that their claim is denied. If you are one of them, it’s time to learn about and pursue your legal options. The best way to accomplish this is to meet with an experienced Chicago disability attorney as soon as possible after you receive a claim denial or even before you file your claim. 

ERISA Vs. Individual Disability Insurance Claims

Most long-term disability insurance coverage is either ERISA or individual. If you have ERISA, your employer provides your coverage in their employee benefits plan. Otherwise, there are private insurance policies you can purchase without going through an employer.

Both provide similar kinds of coverage, but there are often noteworthy differences in how they function—particularly if you need to dispute a claim you think is wrongfully denied. 

ERISA details the specific requirements that employers and insurance companies have to follow to protect employees covered by the plan. That includes how disputes will be resolved when the insurance company denies a claim. ERISA is a federal law, and as such, those rules apply to ERISA-covered disability insurance in every state, including Illinois.

ERISA Denials

If your claim was wrongfully denied, ERISA provides an appeal process that you and your insurer must follow. In each step of the process, the insurer must give exact information and ensure you receive a full and fair review. If you can’t agree, you and your Chicago disability lawyer may want to try to overturn the denial in federal court so that you can receive your benefits.

Individual Policy Denials

If you purchased long-term disability insurance yourself apart from an employer, ERISA laws don’t govern your policy. Even still, you have recourse if your claim is wrongfully denied. You still have the right to appeal that decision. However, since ERISA doesn’t oversee these types of policies, the appeal process goes by state laws, which can differ between states.

Sometimes individual policies provide more options to resolve a dispute. On the other hand, with ERISA plans, every dispute follows the same rigid rules. You do have the right to sue in federal court. Be mindful that it can take a long time to get a denial overturned and receive your benefits.

If an individual insurer denies your claim, you might have the right to sue in state court right away. Under many states’ laws, if an insurer wrongfully denies your claim, you may also be entitled to receive punitive damages.

Questions about the Long-Term Disability Coverage You Have or a Claim? Call an Experienced Chicago Disability Lawyer Today

A wrongful denial of your disability claim gives you the right to appeal so that you can obtain the benefits that you are entitled to receive. This applies no matter which type of long-term disability insurance you have. Unfortunately, the regulations and laws governing appeals are highly complicated. Making an error or missing a crucial deadline can be detrimental to your claim and appeal. You can avoid errors and mistakes by speaking with an experienced Chicago disability attorney who can help you no matter what type of disability insurance you have. Contact Bartolic Law today to schedule a free consultation and learn more about how we can help.