The Employee Retirement Income Security Act of 1974 (ERISA) was a landmark law that formally established protections for workers dependent on employer-sponsored or managed benefits, including retirement and insurance policies, like disability.
When your employer funds and manages benefits or insurance policies on your behalf, they may have a financial incentive to mismanage those resources or deny valid claims for benefits. ERISA prevents businesses from abandoning employees who depend on the company for retirement resources or other critical benefits, like disability insurance.
Disability benefits, in particular, can be expensive for employers, which creates a financial incentive to deny valid claims. What are your rights as employees seeking ERISA disability benefits?
You have the right to a fair and reasonable review of your claim
Disability claims stem from an inability to work either due to an acquired injury or an illness. The benefits usually involve providing replacement income for as long as someone is unable to return to work or partial benefits for those only able to perform lower-paying work.
Private disability benefits are often important to those who financially support their families, as government disability benefits are low-paying and difficult to access in many cases. Workers’ compensation benefits, for example, will only replace a portion of the wages you would have earned, leading to major gaps in some people’s budgets.
Provided that you have documentation of your condition, your employer should fairly review your claim and approve it based on the merits of the claim, not based on their desire to minimize expenses. The company should typically respond to you within 45 days of your claim, as long-term delays could lead to significant hardship for claimants.
However, that timeline is not guaranteed under ERISA, so in some cases, approval could take longer than 45 days. If that is the case, you should receive notification in writing, and the company should prioritize making a decision in a timely manner.
What can you do after an unfair claim denial?
If your employer denies your claim for disability benefits, ERISA gives you certain rights, including the right to appeal that decision.
Asking for an outside review can often help those denied benefits with legitimate qualifying disabilities to receive the disability that they need to support themselves and provide for their families.