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Employee benefit plans and disability: 3 things to know

| Sep 12, 2018 | Uncategorized |

You’re a high-powered professional who is used to handling all sorts of sophisticated tasks with focus, efficiency and purpose. But if your employer doesn’t fulfill its commitments regarding benefits that are supposed to go with your job, it can really put you in a tough spot.

For example, what if you develop a disabling condition and your employer or its insurance company doesn’t pay out on your disability insurance?

Fortunately, a federal law known as ERISA provides key protections for situations such as this. Here are three important things to know about ERISA.

Though ERISA originally applied only to pension plans, its coverage now includes disability insurance and many other types of benefits.

Congress passed the Employee Retirement Income Security Act (ERISA) in 1974 to provide safeguards for employee pensions. It was prompted by prominent bankruptcies, such as the Studebaker-Packard Corporation, which left many workers without their pensions.

Over the years, however, ERISA has evolved to include many other types of benefits. As we explained in a post earlier this year, this includes disability insurance, health insurance, retirement contributions and employee stock options.

Many disabling conditions do not develop until later in life.

It’s easy to discount the possibility of becoming disabled. Yet Wed MD and other respected authorities put the odds of becoming disabled over the course of a person’s working years as about 1 in 3.

Broadly speaking, the most common cause of long-term disability is musculoskeletal problems. This includes conditions such as arthritis and joint problems.

Fibromyalgia, a condition involving chronic pain, fatigue and other symptoms, is another common challenge that can result in disability. More than 3.7 people in the U.S. suffer from fibromyalgia. Most of these people are women between 40 and 75 years old.

The sad fact is that with fibromyalgia and many other conditions, disability may not develop until later in life.

ERISA can be a useful tool for employees in benefit disputes with employers.

If your employer’s group benefit plan qualifies for ERISA, it imposes certain obligations on the employer. This includes disclosing information on the workings of the plan and procedures for filing to claim.

The employer also has the obligation to provide an internal appeals or grievance process for denied claims. And if necessary, it is possible to go into federal court under ERISA to challenge an employer’s improper denial of benefits.

 

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