Many U.S. citizens and foreign nationals working abroad find themselves navigating the complex landscape of long-term disability (LTD) benefits. But does the ERISA law apply to U.S. residents living abroad or to non-U.S. residents living outside the United States?  The answer is generally yes; and long-term Disability benefits for expatriates or even foreign nationals who work for U.S. companies are often eligible to receive ERISA-governed long-term disability benefits, but there may be challenges in collecting benefits.  Although plans maintained outside of the U.S. that only cover persons who are U.S. non-residents would not be subject to ERISA but may still be subject to U.S. law.

 LTD Benefit Eligibility for U.S. Expatriates

The terms of the benefit plan always control the scope of eligibility to receive benefits.  Assuming that a long-term disability plan covers expatriates, such individuals are eligible to recover benefits in the event illness or injury renders them unable to work.  Indeed, many plans offer long-term disability benefits to U.S. residents working abroad as part of their employee benefits package.  Such coverage differs, though, from Defense Base Act coverage, which provides a substitute for workers’ compensation for civilian employees working outside the United States on military bases or under contract with the U.S. government to provide national security or public works assistance.  Such benefits are only payable, though, if the worker sustains an injury or is killed in the course of their employment.  Long-term disability benefits are payable regardless of whether the disability is incurred in or arises out of their employment.

Long-term disability benefits for expatriates work the same as it does in the U.S.; however, qualifying for benefits may be challenging if medical records are not written in English. Also, if an LTD claim is denied and the claimant wishes to pursue litigation against their disability insurance company, an expatriate may face the inconvenience of having to come to the U.S. for court proceedings.  Foreign courts will not hear claims based on U.S. laws such as ERISA.

If the expatriate was working in the U.S. when their disability began, that creates other problems.  Many disability plans contain exclusionary language that would not allow an expatriate to collect benefits while living outside of the U.S. or Canada.  It is important to check the language of the plan to determine whether such issues might arise.

LTD Benefits for Non-U.S. Residents Employed by American Companies

Non-U.S. residents may also be eligible to receive long-term disability benefits if they are employed outside of the U.S. for an American business. The terms and conditions of such coverage should be identical to the coverage U.S. employees have and would require the employee to provide the same type of proof as if they were living in the U.S.  As in the previous section, that may create some difficulty if the medical records are written in a language other than English.

Another issue that may arise is that long-term disability benefits for expatriates are paid in U.S. dollars and are typically paid electronically through the Automated Clearing House Network (ACH).  The insurance company may not be able to issue payment outside the U.S. either by check or through SWIFT.  Thus, expatriate and non-U.S. claimants will likely need to have a U.S. bank account to receive disability benefit payments.

Overcoming Legal Hurdles: Processes for Expatriate LTD Claims, Appeals, and Litigation

Fortunately for claimants living outside the U.S., the entire world uses the World Health Organization’s International Classification of Diseases, now in its 11th revision (ICD-11).  Therefore, a diagnosis made anywhere in the world should be the same as a diagnosis made in the U.S., which would enable a disability insurance company to understand the diagnosis made for the claimed disabling impairment.  However, there are some differences.  In the U.S., psychiatric diagnoses are made following the Diagnostic and Statistical Manual of Mental Disorders, now in its 5th revision (DSM-V).  While many practitioners outside the U.S. use the DSM-V, there are differences between the DSM-V and ICD-11 that may create issues.

In addition, a diagnosis alone is typically not enough to establish a disability, and a claimant’s functional limitations need to be evaluated and described to the disability insurance company.  Methods of evaluation in the U.S. and in other countries may differ.  It would not be enough for a doctor to simply state or issue a certification that the patient is disabled; specific functional limitations need to be identified.  If the doctor is not preparing records or reports in English or if the doctor’s English is not fluent, that could also potentially raise issues.

Fortunately, platforms such as Skype, Zoom, Teams, or even FaceTime, can facilitate communications overseas; and translations are also easier nowadays.

If a claim governed by ERISA is denied, the expatriate claimant will need to appeal the decision as a precondition for instituting a lawsuit over the denial.  That process will involve collecting additional supporting evidence to submit to the insurance company.

If the appeal is not successful, the claimant has the right to sue the insurance company.  Most cases brought under ERISA involve a court reviewing a claim record, so there may not be any need for the claimant to come to the U.S. to participate in any court proceeding.  However, there may be circumstances where a trip to the U.S. would be required, such as to give a deposition or to testify at trial.

Review Your Expatriate LTD Claim With Our Experienced Attorneys

The Role of Expert Legal Guidance for International LTD Claims

A lawyer is not required in connection with every claim, but if issues arise during a claim, and especially if a claim has been denied, claimants should immediately seek out legal advice and assistance.  For non-U.S. residents, it is extremely unlikely that they would have even heard the word “ERISA,” which is the law governing employee benefits in the U.S. and stands for the Employee Retirement Income Security Act.  Nor would such claimants be aware of or have the know-how to navigate the complexities of dealing with a long-term disability insurance benefits claim governed by ERISA.

The lawyers at DeBofsky Law not only have experience and expertise in assisting clients who have ERISA issues; they have also represented numerous expatriates and non-U.S. residents in successfully obtaining long-term disability benefits both in and out of court.  They can help guide claimants through the disability claim and appeal process, as well as the litigation process, and can advise clients on what is necessary to perfect their claims.

If you are outside the U.S. and need to submit a claim or appeal a claim denial, you should contact DeBofsky Law Ltd and seek their assistance in helping you receive the benefits you are due as an expatriate.

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