FAQs

ERISA stands for the Employee Retirement Income Security Act, which is a federal labor law that was passed in 1974. ERISA applies to almost all employer-sponsored benefits except when the employer is a government or church-related entity. ERISA establishes minimum standards and rules that apply to all covered employee benefit plans including how benefit plans are administered, how benefit claims are submitted and decided, how benefit claim denials are appealed to the plan administrator, and when a lawsuit can be filed. ERISA does not apply to any type insurance purchased by individuals on their own outside the workplace.

ERISA applies to two general types of benefits – retirement benefits and “health and welfare” benefits. Common examples of retirement benefit plans include defined benefit plans (like traditional pension plans), defined contribution benefit plans (like 401(k) plans), and employee-stock ownership plans or “ESOPs.” Common examples of “health and welfare” benefits include healthcare, disability (short-term and long-term), life insurance, accidental death and dismemberment, and long-term care benefits.

In the case of group-sponsored benefits subject to ERISA, you generally must appeal prior to filing suit. Otherwise, your suit could be dismissed due to “failure to exhaust administrative remedies.” There are some exceptions to this rule, so it’s best to discuss your options with an experienced benefits attorney. In the case of individual disability, life/accidental death, and health insurance policies, there is no exhaustion requirement under the law; and you may usually proceed directly to court. Nonetheless, if you are permitted an appeal as an alternative to going straight to court, that option may be worth pursuing and you should discuss the pros and cons with an attorney.

If your benefits are denied, you should not be lulled into believing you can successfully challenge the denial without the assistance of an experienced attorney. Waiting to hire an attorney until after appeals have been exhausted may have disastrous consequences because a pre-litigation appeal is often the last opportunity to submit evidence or present issues that a court may later consider. Claim appeals, particularly under ERISA, are complex and governed by an intricate body of federal regulations and legal precedents. Mistakes are easy to make. Therefore, hiring an attorney as soon as possible is the most critical thing you can do to overturn an unjustified claim denial.

A key aspect of claim appeals is that you have a right to request your claim file and a copy of the relevant benefit plan documents upon which the denial was based. Even if your claim is not subject to ERISA, you can often request those documents. The claim file provides valuable insight into to the thought process and opinion evidence underlying the denial, and the policy/plan document is essential to understanding the plan terms that apply to your claim. Claimants who do not hire an attorney to handle their appeals often skip this step to their detriment. An experienced attorney will always request the claim file and policy/plan documents prior to submitting an appeal unless it is not feasible to do so, for some reason. If your benefits have been denied, contact the experienced attorneys at DeBofsky today and we will handle this important first step as part of our appeal process.

An experienced attorney can help identify what went wrong with the claim and can help compile additional evidence necessary to perfect your appeal. An experienced attorney is best equipped to present all of the necessary evidence and will make the type of compelling arguments that are necessary in order for the claim decision to be overturned. Even if the appeal is unsuccessful, an attorney-drafted appeal letter will best prepare the claim to go into litigation, if necessary. Denial letters are often written in vague terms, and it may not be immediately apparent what additional evidence is needed to perfect your appeal. Even if the insurer or plan administrator is clear about what additional evidence is needed, it may reject that evidence, once provided, based on new evidence or rationales. The attorneys at DeBofsky have handled thousands of such appeals and can decipher the meaning of vague or obtuse denial letters based on their extensive experience. That institutional knowledge also helps the attorneys at DeBofsky spot issues and anticipate problems to avoid future denials.

Employee benefit plans subject to the ERISA statute are required to provide claimants with at least 180 days to appeal the denial of disability and healthcare benefit claims. Shorter periods of time apply for certain types of healthcare benefit claims, and claimants have 60 days to appeal retirement and life insurance benefit claims. Once the appeal is submitted, the benefit plan has a defined amount of time to issue its decision – in the case of single-employer disability plans, 45 days, and for other types of benefit plans, usually 60 days. However, the plan administrator may (and often does) extend those period of time by requesting an extension, for a total of no more than 90 days for disability benefit plans and 120 days for most other types of benefit plans.

During the claim appeal, the claimant has the right to be furnished with any evidence gathered by the insurance company, even after the submission of the appeal. For disability benefit claims, claimants are now also permitted to rebut adverse evidence collected during the appeal review process before a final claim determination is made. It is best to consult an experienced benefits attorney regarding your appeal rights.

Maybe, but it may be too late. In the case of group-sponsored benefits, the ERISA claims regulations provide that a plan administrator must provide the claimant “at least” 180 days to appeal health and disability benefit claim denials and 60 days to appeal most other benefit claim denials. ERISA plan administrators are fiduciaries; and many ERISA plans confer discretion upon the plan administrator to interpret the terms of the plan. Arguably, plan administrators should use their discretion to entertain a late appeal, particularly if the claimant provides a good reason for the delay, such as a mental incapacity. Failure to “exhaust appeals” prior to filing suit under ERISA will result in dismissal of the suit. If you think you may miss the deadline, it’s best to request an extension prior to the expiration of the initial appeal deadline, if possible. For non-ERISA claims, there is no exhaustion requirement; and you usually may appeal, or not, prior to filing suit so long as the applicable statute of limitations period (or limitations period delineated in the plan or policy, if shorter) has not expired.

You have the right to take your case to court. If your case is governed by the ERISA law, your case will likely be decided in federal court. The attorneys at DeBofsky have extensive experience litigating cases across the country at both the trial and appellate court level.

Usually. The attorneys at DeBofsky often handle matters on a contingency fee basis so long as the claim is meritorious and there are enough benefits at stake to justify such a fee arrangement. Our contingency fee arrangement is generally based on a percentage of the past-due benefits recovered or lump sum paid in litigation.

In the case of group-sponsored benefits subject to ERISA, the answer is unfortunately no. The only damages you can recover are the benefits due under the plan, plus potentially also prejudgment interest, costs, and attorneys’ fees. Some other additional remedies may exist for what is known as a “breach of fiduciary duty,” but only in very select circumstances. Therefore, it’s best to discuss with an experienced ERISA attorney. For non-ERISA claims, you may be able to pursue damages for insurer bad faith, along with reimbursement for your attorneys’ fees and costs, but the law varies from state to state.

Under the ERISA statute, you cannot recover attorneys’ fees incurred for pre-suit appeals, but a claimant may seek a court award of attorneys’ fees for time spent working on litigation-related services. Whether to award attorneys’ fees is entirely within the court’s discretion; and it is possible to win a judgment or have a claim denial overturned, but nonetheless be denied attorneys’ fees. Non-ERISA claims are subject to state law, and the laws regarding fee-shifting vary from state to state.

Short-term disability or “STD” benefits are intended to cover only short-term injuries or illnesses or the beginning of a long-term injury or illness. STD benefits generally only last between three to six months. STD benefits are sometimes paid by the employer through payroll, in which case they are generally not governed by ERISA.

Long-term disability or “LTD” benefits are intended to cover longer-term injuries or illnesses, which usually start after individuals have already exhausted their STD benefits. LTD benefits generally run through retirement age, although most disability benefit plans limit the duration of LTD benefits payable for certain types of disabilities, such as those caused by mental/nervous conditions or “self-reported” symptoms.

Whether you are applying for short-term, long-term, or individual disability benefits, it’s always a good idea to first request a copy of the disability policy/plan and, ideally, review it with an attorney. An experienced lawyer can help you understand the nature of the coverage provided and anticipate problems that may arise, for example by counseling you as to limited-duration benefits, policy exclusions, and offsets. An experienced lawyer can also counsel you as to what additional evidence might be needed to perfect your claim, and how to approach conversations with your doctors and employer to avoid problems and secure their support. Experienced benefits attorneys can also counsel you on how to preserve other benefits for which you may be eligible, such as under the Family Medical Leave Act or “FMLA” and the Consolidated Omnibus Budget Reconciliation Act or “COBRA.” Contact the experienced lawyers at DeBofsky to schedule your hourly consultation today.[MC1].

Perhaps. Most disability plans (whether group or individual) require “proof of loss” to be submitted within 30 to 90 days, but no later than one year, from the date the claimant stopped working. However, a majority of states have adopted some form of “notice prejudice rule” that requires insurers to demonstrate that they have been unfairly prejudiced to deny a claim based on late notice. However, some states require strict compliance with notice requirements and a delay in applying usually requires an adequate excuse such as mental incapacity. If you think you may have an issue with a late-filed disability claim, you should consult an experienced benefits attorney regarding your rights.

Generally, no. So long as you were “actively employed” on the date the disability began, you are covered under the disability plan, regardless of whether you are later terminated. “Active employment” usually includes regularly scheduled vacations, sick days, and holidays, but may exclude leaves of absence not related to disability, so it’s important to consult the plan documents. Some plans also exclude coverage for employees who are terminated “for cause.” Again, you should always consult the plan documents. In the case of individual policies of disability insurance, the insurance companies usually look to see if there has been a significant drop in earnings and while there is less concern about your employment status, the longer you delay applying for benefits after you stop working, the more likely the insurer may try to characterize your pre-disability occupation as that of an “unemployed person,” as we have seen some insurers do. The skilled attorneys at DeBofsky, can help you navigate these pitfalls.

Generally, yes. Unless the disability plan specifically states that receipt of short-term disability benefits is a prerequisite to applying for long-term disability benefits (and most do not), the plan administrator should conduct an independent investigation as to whether you qualify for long-term disability benefits. Although it may seem counterintuitive, if you intend to remain out of work beyond the short-term disability benefits period, you should apply for long-term disability benefits, even if your short-term disability claim was denied, because failure to do so could preclude you from suing to recover long-term disability benefits later.

Maybe. Some group disability benefit plans cover a loss of earnings due to a partial reduction in working capacity or hours. Most individual disability benefit plans also cover a partial loss in earnings. Each group and individual disability benefit policy/plan defines partial disability and calculates partial disability benefits differently, so it is important to review the terms of your specific policy/plan with an experienced benefits attorney.

Many group disability benefit plans contain a two-part definition of “disability” that provides 24 months of disability benefits if you are unable to perform your “own occupation.” After that, claimants must demonstrate the inability to perform “any occupation.” Plan administrators often use this change in definition as an opportunity to re-evaluate the claim. If your claim is denied based on your ability to perform “any occupation,” it is important that you contact an experienced benefits attorney immediately to discuss your options, as the time to appeal is limited; and failure to timely appeal will likely bar you from later pursuing litigation. Other reasons your disability claim may be denied include policy limitations for mental/nervous or other conditions. It is important to obtain a copy of your disability benefit policy/plan from your employer to confirm the claimed basis for the termination of benefits.

Although almost all disability benefit plans reserve the right for the insurance company to compel your examination by a doctor of the insurance company’s choosing, it is not required that they do so; and many insurance companies rely on reports from doctors who render opinions based on medical-file reviews. After a 2003 Supreme Court ruling, insurance companies are not obligated to defer to the opinions of claimants’ treating doctors and can reasonably rely on the findings of the doctors who they employ or retain. While courts have found that opinions from non-examining doctors have a particular weakness as far as assessing issues such as the severity of pain or a behavioral health disorder, file reviews remain common in disability benefit claim reviews. The attorneys at DeBofsky have experience dealing with adverse file reviews and can assist you in neutralizing or reversing their damage.

Yes. Unlike health insurance coverage governed by the Affordable Care Act or “ACA,” disability benefit claims may be denied for disabilities resulting from conditions that were diagnosed or treated prior to the effective date of coverage. Even If you have worked for your employer for years, but did not elect long-term disability coverage until recently, your claim could be subject to the pre-existing condition exclusion. A coverage issue can also arise when an employer switches long-term disability carriers and neglects to include language in the new policy honoring the years of coverage under the previous policy. Employees in these circumstances should demand written assurance from their employer of their grandfathered status, ideally in advance of the change in carriers. If you are concerned about losing your grandfathered status under your disability plan, or think you have a disability benefit claim that was wrongfully denied based on a pre-existing condition exclusion, the experienced attorneys at DeBofsky can help.

Yes. Your group disability policy/plan likely contains a section titled “Other Income Benefits,” “Deductible Income,” or something similar that lists various benefits or other sources of income that may be used to reduce or offset your disability benefits. Individual disability benefit policies rarely include such provisions. What sources of income are subject to offset varies from plan to plan, but almost always include Social Security disability benefits (both for you and your dependents), Social Security retirement benefits, and pension benefits. Other types of income that may be subject to offset include third-party personal injury settlements, severance benefits, and worker’s compensation benefits. 401k distributions and veteran’s benefits are usually not subject to offset, but every policy/plan is different, so it is best to consult the plan terms to confirm. If you incur attorneys’ fees in your pursuit of Social Security, worker’s compensation, or other benefits, those fees should be excluded from offset pursuant to the common fund doctrine unless the policy/plan contains language expressly to the contrary.

In some situations where you receive other income benefits, it may result in the disability benefit plan or insurance carrier telling you that you have received an “overpayment” that must be paid back. This typically occurs when you receive Social Security disability benefits after a long waiting period between when you apply and when benefits are awarded. If you received your full long-term disability benefit payment during months for which you later received Social Security disability payments, the disability benefit plan or insurance company considers the duplication of benefits an overpayment and requests reimbursement. You may be able to satisfy the overpayment by having future benefits reduced or suspended for a period of time. Although in most circumstances, the disability benefit plan or insurance company is entitled to be repaid, although a lien cannot be placed on your Social Security benefits. It gets trickier with other types of lump sum payments such as a workers’ compensation or personal injury settlement. If you find yourself in a situation where you believe the insurance company is asking for more than they are entitled to recoup, you should contact an experienced attorney for advice.

Under the Social Security Act, benefits may not be garnished, nor can a lien be placed on your benefits except in certain circumstances. To circumvent that law, disability plans characterize their lien as a lien over the long-term disability benefits that have been overpaid by virtue of the Social Security disability award. However, that overlooks the reality that by the time Social Security disability benefits are awarded, most claimants have spent the entirety of the overpaid long-term disability benefits on necessities such as food, clothing, and rent. If the only assets on hand are Social Security benefits, the insurance company usually cannot sue you to recoup those payments. Nonetheless, a disability insurer has the right to withhold future long-term disability payments to satisfy an overpayment.

Probably yes. Nearly every court to consider the issue has upheld the right of disability plans to reduce long-term disability benefits by Social Security dependent benefits, provided the plan contains language that supports it. If your children are themselves disabled, or they are receiving benefits on the account of a disabled spouse, there may be a basis to challenge the offset and you should consult with an experienced attorney.

Although the Supreme Court requires that plan administrators consider Social Security disability benefit awards in assessing group disability benefit claims governed by ERISA, plan administrators do not need to defer to those determinations unless the plan terms require it. Nonetheless, the Social Security Administration generally utilizes more rigorous criteria than most disability benefit plans for assessing disability; and a plan administrator’s disregard of a favorable Social Security award can be cited as evidence of conflict of interest. Many group disability benefit plans, and some individual disability insurance policies, also limit the duration of benefits for mental/nervous and other conditions, whereas the Social Security Administration does not apply such limitations. Private insurance policies also exclude claims based on pre-existing conditions; i.e., conditions for which you received testing or treatment during the period leading up to when your coverage commenced. You should consult your disability benefit policy/plan to confirm whether one of those limitations or exclusions applies to your claim, but generally speaking, If you have been awarded Social Security disability benefits but denied private disability benefits, you should contact an experienced benefits attorney to discuss your options.

The attorneys at DeBofsky are all knowledgeable about Social Security law and most have represented Social Security disability claimants at the hearing and federal court levels. Thus, they have a strong grasp of Social Security law and bureaucracy, and they use that knowledge to their advantage in their disability insurance practice. Though the firm no longer accepts Social Security cases, the attorneys at DeBofsky have close working relationships with excellent Social Security lawyers in Chicago and throughout the country, and can refer you to an attorney to handle your Social Security case or, if you already have representation, work with your lawyer to come up with a successful strategy for both your private and Social Security disability benefit claims.

Almost all disability benefit policies/plans contain a provision that allows the insurer/administrator to require the claimant to attend an examination with a doctor of its choosing, often referred to as an Independent Medical Examination or “IME.” Even so, there may be grounds for protesting the choice of doctor if he or she lacks the appropriate medical expertise, if the IME requires you to travel a great distance, or if the IME doctor is being flown in despite the availability of local doctors with the same medical expertise. Likewise, the timing of the examination may raise concerns if, for example, the plan waits until after a deadline to request the IME. If none of those grounds exist for protesting the IME, then you can usually try to bring an observer with you to the exam to take notes and create a contemporaneous written record of any irregularities that may occur during the examination. If you have received a notice for an IME and are unsure of what to do, the experienced attorneys at DeBofsky can help you navigate the process.

A functional capacity evaluation or “FCE” is usually a three to four hour physical test performed by a physical or occupational therapist to measure and predict your tolerance for work-like activities during a normal work day and work week. After a brief interview, the examiner will have you perform a series of standardized tasks, such as lifting increasing amounts of weight, walking on a treadmill, or placing pegs on a board, while monitoring your heart rate and other clinical signs to ensure you are putting forth maximum effort. Giving full effort during an FCE is important, as an invalid exam can negatively impact your credibility in the eyes of the disability insurer/plan administrator. At the same time, you should not overexert yourself or risk injuring yourself for fear of an invalid FCE. Many states require a doctor’s prescription before a claimant may undergo an FCE; and most FCE examiners will not perform the evaluation on a patient with a cardiac condition without a doctor’s clearance. The attorneys at DeBofsky have extensive experience with FCEs and can help counsel you, whether you are seeking to undergo one yourself or are being ordered to attend one by your disability insurer/plan administrator.

Probably not. Many disability insurance companies employ staff or utilize vendors to conduct interviews with their insureds, but the interviews do not have to be conducted at your home. You can request to meet at a neutral location such as a public library or coffee shop. In many instances, you can even decline a meeting if your disability benefit policy/plan does not mandate that you meet with insurance company representatives (although doing so may result in increased scrutiny of your claim). If you are contacted by your disability insurance company or plan administrator for a meeting with a field representative, we strongly advise you contact an attorney who may wish to schedule the meeting at a law office and protect you against improper intrusive questioning.

When you apply for disability benefits, there is a strong likelihood that the insurance carrier or plan administrator will conduct a social media search, either as part of its initial research on the claim or later. Part of that investigation may include a search of public records and video surveillance. To minimize the visibility of your social media profiles, consider using an “alias” instead of your full legal name. You can also increase your privacy settings so that your pictures and posts are visible only to friends, but you should always assume that anything your friends can see, can also be seen by the insurance company or plan administrator. Increasingly, disability insurers and plan administrators are using face recognition software that enables them to find pictures of you not only on your social media pages, but on those of friends and family as well. Thus, even with the most robust privacy settings, be mindful about what you post on social media and do not misrepresent your activities or work status.

Much like video surveillance, social media is only useful to the insurance carrier or plan administrator to the extent it conflicts with a claimant’s account of his or her activities. Unfortunately, though, social media is not known for its accuracy; and photos can be taken out of context. For example, it is often difficult to tell on social media how old a photo is; and we have seen disability benefits interrupted due to old social media photos of family vacations and other activities that pre-date the claimant’s disability.

Similarly, there is strong pressure on social media to present a rosier picture than reality. This pressure can be particularly acute after a career-ending illness or injury; and you may be tempted to post a photo of you engaged in a staged activity to give the appearance of normalcy. It’s important to avoid these temptations, as such photos can be difficult to explain to a plan administrator/insurer and may cause a needless interruption in benefits.

LinkedIn, in particular, presents a unique set of challenges, in that you may wish to conceal a gap in employment due to disability. You may be tempted to post that you are enrolled in a degree program or engaged in a “consulting” business. While those activities are not inherently inconsistent with disability, they raise questions that could easily be avoided by leaving your LinkedIn profile untouched, as we recommend. Contact the experienced attorneys at DeBofsky for more answers to your social media questions.

There is very little predictability as to whether or when a disability plan or insurer will order surveillance. However, common times to expect surveillance are on the way to/from a pre-scheduled medical appointment or examination; when first applying for benefits; while receiving benefits; and after appealing a denial of benefits. During the time after your disability benefits have been denied or terminated, but before you have appealed, you are less likely to be placed under surveillance because the claim is in “closed” status; and disability plans/insurers are unlikely to spend money on video surveillance to bolster a denial that may never be appealed.

For the most part, video surveillance is only useful to a disability plan or insurer to the extent it undermines a claimant’s account of his or her capabilities/activities of daily living. If you tell your disability plan or insurer that you do not drive or leave the house except to go to doctors’ appointments, but then are seen on surveillance driving to a restaurant or store, the plan/insurer may seize on that inconsistency as evidence that you are not credible. Similarly, if you claim to have difficulty walking long distances or lifting more than five pounds ,but then are seen engaged in sports or other physically demanding activities, the disability plan/insurer may cite that inconsistency as evidence of untruthfulness, even if you are simply following your doctors’ orders to exercise more. Thus, it is best to be as transparent as possible about your activities when completing disability paperwork and phone interviews to avoid inconsistencies that the disability plan /insurance carrier can later capitalize on to challenge your credibility.

Maybe, but it depends on how the premiums are paid for. Generally speaking, if the plan is funded by 100% employee contributions on a post-tax basis, the disability benefits are not taxable. On the other hand, if the plan is funded entirely by the employer, without employee-contributions, or by 100% employee-contributions on a pre-tax basis, then the disability benefits are usually taxable. You should consult your tax preparer for further clarification because we cannot offer tax advice.

It depends. One of the benefits of the Affordable Care Act or “ACA” is that when insurance companies or healthcare plans deny claims on grounds of medical necessity or refuse to cover services such as residential treatment for behavioral health conditions, claimants are entitled to seek independent external review. While a favorable opinion from an external reviewer triggers the reversal of a denial of benefits in most situations, an unfavorable opinion could make it very difficult to win a subsequent lawsuit. The attorneys at DeBofsky can help guide you in these circumstances, and it is important to seek legal advice before deciding to pursue external review.

No. In 2008, The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act or “MHPAEA” was passed, which requires that most health plans that cover mental health treatment do so in parity to medical/surgical treatments. The Patient Protection and Affordable Care Act or “ACA” also requires that all health plans cover “essential health benefits,” which include mental health and substance use disorder treatment. MHPAEA specifically prohibits what are referred to as quantitative treatment limitations, such as numerical limits on the number of mental health services an individual can receive or co-pay/deductible amounts, and non-quantitative treatment limitations, such as network adequacy considerations and how “medical necessity” determinations are assessed.

Life insurance pays benefits whenever someone who has coverage dies, regardless of the cause of death. Accidental death insurance only pays benefits when someone dies as a result of an “accident” – a sudden and unforeseen occurrence. Accidental death insurance policies exclude death due to natural causes and may also exclude deaths due to misuse of drugs or alcohol. Accidental death claims can be very difficult, so consulting an experienced attorney as soon as possible is critical to avoid making statements or taking actions that an insurance company can later use against a claimant or to obtain needed evidence such as a post-mortem examination.

If an employee seeks additional life insurance coverage beyond the employer’s basic policy, or

If an employee fails to elect life insurance coverage when they first start working for an employer, but later want it, they may be required to complete an “evidence of insurability” form and employers often fail to obtain such forms, leading to a loss of coverage. There may be ways of challenging an employer’s failure to obtain evidence of insurability and contacting an experienced benefits attorney is important.

When you stop working due to a sickness or injury, you may be able to continue your employer-sponsored life insurance. In fact, many group life insurance plans provide that disabled employees can maintain their life insurance coverage at no cost pursuant to a “waiver of premium” benefit. Others group life insurance plans have provisions that allow for portability or conversion of the coverage, and errors often occur when employers fail to advise employees of their life insurance continuation rights. If this has happened to you, contact the attorneys at DeBofsky. We may be able to help.

Long-term care or “LTC” insurance is extremely complex, and the coverage depends on when the policy was written and the terms that govern your specific policy/plan. You may need assistance in dealing with an insurance company that is being difficult about paying a long-term care benefit claim. If so, talk to the attorneys at DeBofsky, who can help advocate for your rights.

Defined benefit plans, also known as pension plans, pay a defined amount upon retirement, frequently based on salary and years of service. Defined contribution plans include 401(K) plans, as well as 403(b), 457(b), and 401(a) plans. Defined contribution plans are funded by contributions from the employer, the employee, or both; and while the employees make their own investment decisions, the financial risks are also born exclusively by the employees.

Yes. Your employer owes you a fiduciary duty to act in your best interest. That fiduciary duty includes giving you complete and accurate information about your retirement benefits, and reducing your retirement benefit plan-related costs to a minimum. If you believe your employer has given you inaccurate information about your retirement benefits or is mismanaging your retirement plan, contact the attorneys at DeBofsky for further assistance.