Disability Insurance

The Importance of Appealing Denials and Terminations of Disability Benefits and What You Need To Do.

You can hear a podcast about this topic hosted by two ERISA attorneys here.

Appealing denials and terminations of disability benefits is absolutely crucial to having disability benefits reinstated. 

If your disability insurance is governed by the federal ERISA statute then failing to appeal a denial of benefits is fatal to your claim.  You have to appeal any denial or termination to the administrator of the claim (typically the insurer that denied it) and they must issue a final determination before you can go to court.  If you try to go to court before there has been a final determination the court will not hear your case because you have not yet ‘exhausted your administrative remedies.’  If your policy states that you must apply within 180 days (and virtually all such policies do) and you have failed to submit a timely appeal, then the administrator will not accept a late appeal and will not issue a final determination.  You claim for benefits is at that point dead.

You must file a timely appeal.  But you must also submit any and all documentation necessary to establish your disability as part of your appeal.  This is absolutely vital to wining an appeal.  Here is why:  If your appeal is denied and you go to court a judge, with few exceptions, will decide the case based on a review of the information the administrator had when it made its determination.  There will be no trial.  You will not be allowed to submit additional medical records or other evidence later.  You must do it during the appeal. 

The administrator of your claim is almost invariably the insurer that has to pay your benefits if you are found disabled.  They lose money if you win your claim.  It is your burden to establish your right to benefits.  Even if the administrator and its ‘representative’ tells you it is gathering medical records and requesting that your providers complete disability forms, it is ultimately your responsibility to submit evidence to support your claim.  An argument to a judge after the fact that “they were supposed to gather medical records” will not succeed.

Lawyers often obtain and submit many documents and reports in addition to medical records.  Narrative reports from physicians, specialized forms, affidavits from claimants and others, functional capacity examinations, neuropsychological exams, vocational assessments.  This article is not legal advice and you should consult an attorney who understands ERISA disability claims litigation as soon as possible if you have been denied disability benefits and are appealing that denial. 

The Limited rights of Claimants in ERISA Claims According to the Department of Labor

In the Supplementary Information to the revision of the claims procedure regulations under the ERISA statute for employee benefit plans providing disability benefits, The Department of Labor noted the extremely limited rights of claimants to litigate denied claims.  The DOL pointed out that, under the ERISA statutes, as interpreted by the courts, “claims are often reviewed by a court under an abuse of discretion standard based on the administrative record.” 

Let’s break down this statement.  The first part of the statement is that when you get to federal court your claim will be ‘reviewed by a court.’  That’s curious.  Aren’t courts supposed to be where you get to prove your case at a trial?  Not so under ERISA law. You don’t get to have a trial.  You don’t get a jury.  You don’t get to depose witnesses or request that the insurer or self-insurer produce all relevant documents.  You don’t get to file motions, bring in experts and do all the things that have come to represent a full and fair trial.  You just get a review by a judge.

The second part of the statement is that the court will review the case ‘under an abuse of discretion standard.’  What that means in lay terms is that the judge can only overturn the insurer’s decision if it was ‘irrational,’ or is not supported by substantial evidence.  The judge must defer to the insurer’s decision unless you can show that it doesn’t have reasonable support based on the administrative record.  The judge does not get to determine whether the claimant is disabled or not.  She only gets to decide whether the adverse determination was reasonable.  Exactly why the system leaves so much power in the hands of insurers to review and decide the claims when they are the ones who must pay benefits on approved claims is hard to understand without taking a very pro-business view of the economy. 

The last part of the statement is that what the court is reviewing is ‘the administrative record.’  Generally, the documents provided by you during the appeal process, if any, along with the documents obtained or generated by the insurer or self-insurer, constitute the administrative record for your claim.  That record can only be supplemented under very narrow circumstances.  If you are not savvy enough to submit medical records, neuropsychological exams, FCE exams, sworn statements or anything else that a sophisticated lawyer might obtain and submit on your behalf, you are very unlikely to have enough evidence in the record to show that the insurer or self-insurer abused its discretion in denying your benefits. 

As you can imagine, with this system firmly in place the Department of Labor has limited power to add protections for claimants.  But in the next article we will review what they have done, or tried to do, with these new Regulations.


Disclaimer:  The information you obtain in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship.


A Guide To The New ERISA Regulations In Effect As Of April 1, 2018

Article 1: I. Background: Insurers Aggressively Disputing Claims Created A Need for Even Stronger Regulations.  

Claimants who are applying for or have been denied long term disability benefits provided by their employers and subject to the federal ERISA statute will want to know about the revisions to the federal regulations promulgated by the Department of Labor (DOL) that went into effect on April 1, 2018.  I will review the Supplementary Information and the new provisions in a way that I hope is helpful to claimants.  The following articles will track the Supplementary Information provided by the Department of Labor, which appears with the new Regulations in the Federal Register.

First, a word about the force of these Regulations.  The ERISA statute grants authority to the Secretary of Labor to promulgate rule-making authority to the Secretary of Labor.  You can find the statutory provisions here.  Although they may be challenged, the Regulations generally operate with the force of law and for purposes of this article are treated as such.

The Background provided in the Supplementary Information section of the new regulations (I.  Background), which you can find here, paints a stark picture of the systemic unfairness to claimants in the administration of disability benefit claims.  It recounts that the ERISA statute as enacted (in 1974) requires a “full and fair review” of a claims denial; the DOL promulgated rules in 1977 establishing minimum requirements for claims procedures; and that it revised and updated those rules in 2000 to strengthen the minimum requirements, in order to reduce lawsuits, promote consistency and provide a non-adversarial method for claims reviews.  Despite all of this, the DOL found that disability lawsuits dominated the ERISA litigation landscape based on a study of the years 2006 – 2010. 

The reasons for this – which are the reasons for the recent changes – are not hard to find.  First, “[i]nsurers and plans looking to contain disability costs may be motivated to aggressively dispute disability claims.”  The DOL cited numerous court cases in which judges had found just that.  See here.

Second, the DOL’s independent ERISA advisory group conducted a study in 2012 in which it received public input that “[n]ot all results have been positive for the participant…even though these rules were intended to protect [them].”  It is hard not to be cynical at a finding that insurers that adjudicate claims might find reasons to deny meritorious claims rather than pay benefits.  The DOL summed up the systemic problem this way:  “The Department’s determination to revise the claims procedures was additionally affected by the aggressive posture insurers and plans can take to disability claims as described above coupled with the judicially recognized conflicts of interest insurers and plans often have in deciding benefit claims.” 

To sum up: to protect disability benefits for those who need them, i.e. some of our most vulnerable citizens, those citizens almost always apply for benefits to companies that both evaluate and pay claims.  After 40 years and many revisions, the companies were found still to be aggressively disputing claims in order to “contain costs,” i.e. increase profits. 


Disclaimer:  The information you obtain in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship.

ERISA Statute and Preemption of State Law

ERISA is a federal statute regulating employer sponsored benefits, including pensions, health care and disability plans. With respect to the protection of employee benefit rights, the statute grants exclusive jurisdiction to the federal district courts for civil actions brought by a participant or beneficiary, but provides an exception for actions brought by a participant or beneficiary to recover benefits due to him under the terms of the plan, to enforce his rights under the plan or to clarify his right to future benefits. See 29 U.S.C. 

Reporting and Disclosure in the ERISA Statute

The reporting and disclosure provisions of the ERISA statute appear at §§ 1021 – 1031. These sections –

  • Create the reporting and disclosure duties of administrators ( 1021);

  • Describe the summary plan description ( 1022) and annual report (§ 1023) that are the two most important parts of the reporting and disclosure scheme; and

  • Set forth the timing and details of furnishings and filings (§ 1025 and 1026).

Fiduciary Responsibilities Relating to ERISA Disability Plans

Unlike wages, which employees receive directly, employee benefits are established and maintained by other entities, which maintain funds from which to provide benefits to employees in forms other than direct compensation. The entities in question may be tempted to act in ways that benefit themselves rather than the employees who are or may become entitled the benefits, which is precisely what happened all too often in the history preceding the enactment of the ERISA statute.

LTD Plans Not Subject to ERISA

The ERISA statute excepts five types of plans from coverage under the statute in the “Coverage” section found at 29 U.S.C. § 1003(b): (1) government plans; (2) church plans; (3) plans maintained solely for the purpose of complying with applicable workmen’s compensation laws or unemployment compensation or disability insurance laws; (4) plans maintained outside of the United States primarily for the benefit of persons substantially all of whom are nonresident aliens; and (5) excess benefit plans.

Why ERISA Insurers Are Working Against You

Individuals who become disabled and then run into insurance company resistance to paying benefits under their group plans often feel shock and disbelief. They may ask: Why have I been paying premiums all this time only to have my valid claim denied?

ERISA and Social Security

Most group long term disability plans require claimants to apply for social security disability benefits. In fact, administrators often offer to assist claimants by referring them to a company that will represent them.