Is my disability insurance policy subject to or governed by ERISA?

It is rare that any disability insurance claimant has ever heard of ERISA until it comes time to file a disability claim. ERISA is a federal law that was intended to offer affordable employee benefits and protect employees. ERISA accomplished the goal of affordable employee benefits, but unfortunately the ERISA regulations have been construed by the courts in such a way that ERISA favors insurance companies. In every disability claim, we try to prove that a claim is not governed by ERISA so that our clients can have the best chance of collecting benefits. Learn more about why ERISA is an unfair law.

Individual v. Group Disability Insurance Policies

Generally speaking there are two types of disability insurance policies: “Group” and “Individual.” A Group policy is a policy provided by an Employer which is usually subject to ERISA, and an Individual policy is purchased independent of your employer usually through an insurance agent and is not subject to ERISA. More than 85% of the people with disability coverage have a group policy governed by ERISA.

Five Requirements For A Disability Policy To Fall Under ERISA

So is your policy subject to ERISA? Like many things in the world of disability insurance policies, the answer is not always clear cut with respect to “Group” disability insurance policies. Federal courts throughout the country have stated that there are five requirements in order for a group disability policy to fall under ERISA:

  1. A “plan, fund, or program”
  2. established or maintained
  3. by an employer or employee organization, or both
  4. for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vacation benefits
  5. to participants or their beneficiaries.

In reviewing this list it becomes somewhat clearer that an ERISA governed disability policy is one that is sponsored by an employer. Generally, these policies are part of a benefits package, and may or may not require a small portion of the premium be paid by the employee while the remainder is paid by the employer. The above analysis is further scrutinized to determine the true nature of employer relationship with the policy and the way in which the policy is offered.

What are “Safe Harbor” Regulations and How do They Apply to Disability Insurance Policies

The Department of Labor has issued what are known as “safe harbor” regulations providing “that group insurance offered to workers through their place of employment will not be deemed an ERISA plan if the insurance program satisfies certain enumerated criteria.” So how does one determine if a policy falls within the “safer harbor” regulation? The ERISA statute provides four criteria for a policy to be considered not governed by ERISA under the “safe harbor” regulation. Failure to meet all four criteria means the Group policy is subject to ERISA. The four factors are:

  1. No contributions are made be an employer or employee organization;
  2. Participation in the program is completely voluntary for employees or members;
  3. The sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer; and
  4. The employer or employee organization receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions or dues checkoff.

For example, most short term disability plans provided through Aflac fall into all 4 criteria and therefore are not governed by ERISA.. You may have experienced a situation where your HR advises you that an Aflac representative will be in the office to discuss signing up for coverage; that if you sign up for it you will be solely responsible for paying the premiums; that it is completely voluntary and you don’t need to sign up for the coverage; that if you do sign up for it, the premiums can be paid out of your pay check; and that the employer does not stand to gain financially from the arrangement.

Is the Analysis Over? Not yet!

If only this was the final portion of the analysis as to the whether ERISA would apply to your policy it would seem simple enough”¦ well maybe. The above noted factors have been further scrutinized by Courts to determine if the disability policy at issue in litigation is governed by ERISA or by a state law action. Courts point to a seven prong analysis to try to make this determination:

  1. The employer’s representations in internally distributed documents;
  2. The employer’s oral representations;
  3. The employer’s establishment of a fund to pay benefits;
  4. Actual payment of benefits;
  5. The employer’s deliberate failure to correct known perceptions of a plan’s existence;
  6. The reasonable understanding of the employees; and
  7. The employer’s intent.

These last seven factors result in even more uncertainty as to the ultimate question of whether a disability policy from your employer really is an ERISA governed plan. Unfortunately there is no finite, cookie-cutter answer, and it is often necessary to gather numerous documents from your employer in order to obtain a final answer. In most cases that result in litigation, the necessary documents can be obtained during the litigation of the claim.

At the end of the day, the claimant still has a good chance to win their case, but the odds are much better if the claim is not governed by ERISA. If you have questions regarding your disability insurance policy, the disability attorneys at Attorneys Dell and Schaefer, will always provide you with a free initial consultation.


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Disability Company Reviews
(620)
Showing 8 of 620 Reviews
Sedgwick

Sedgewich is the worst-immediate denial of all requests for treatment. Rubber stamps DENIED ALL RFA’s

Reviewed by J on May 31st 2023   Verified Policyholder | August 2023 date of disability
Sedgewich immediately denies all RFA. They’re ur team are THEMSELVES not a independent medical team…
Sedgwick

Very very slow to respond

Reviewed by Steve on May 31st 2023   Verified Policyholder | April 2023 date of disability
Very very slow to respond to reply to questions they put you on a timeline, but they can bend their timeline.
Sun Life

They leave you unable to fight

Reviewed by Kara on May 1st 2023   Verified Policyholder | July 2014 date of disability
I received LTD from Sunlife since 2014 until 2021. I still tried fighting in 2022. Somewhere they changed my claim from physical to mental but nothing in my medical histor... read more >
Reply
Sent on May 1st 2023 by Attorney Gregory Dell

Kara:
Thank you for submitting a review about your experience with Sun Life. If you appealed your denial, then you may still have time to file a lawsuit to obtain... read more >

Hartford

Hartford Stopped Payments

Reviewed by Fed up in PA on April 13th 2023   Verified Policyholder | January 2023 date of disability
Worst company ever. Their analysts will go against your treating provider every single time. Horrible experience, just horrible.
Prudential

Prudential terminated my LTD, so now I have no income

Reviewed by Carlos M on June 10th 2022   Verified Policyholder
I was working at a shipyard at San Diego and hurt my back again while working. Hurt my back in the US Navy in 98 and had issues since then so I decided to get the surgery ... read more >
Reply
Sent on June 11th 2022 by Attorney Rachel Alters

Carlos, yes we may be able to help. Please email your denial letter to Rachel@diattorney.com and cc Amanda@diattorney.com. Thank you.

Lincoln Financial

Lincoln Financial made my life a living hell

Reviewed by Salyna D on June 1st 2022   Verified Policyholder
Lincoln Financial made my life a living hell. I went on medical leave from my job just to work for them basically. My mental health is worse than it was and I still do not... read more >
Reply
Sent on June 2nd 2022 by Attorney Stephen Jessup

Salyna, I am sorry to hear about your experience. I wish I could say it is an anomaly, but it is an all too common occurrence. Depending on if the claim was ever approv... read more >

MetLife

They demanded an overpayment, stopped my claim, and lied about it

Reviewed by Diana R. on May 28th 2022   Verified Policyholder
Metlife over paid me. Stopped my Ltd claim. The overpayment were not done right. They lied and said they deposited money in my account.
Reply
Sent on May 28th 2022 by Attorney Alex Palamara

Diana, I am sorry to hear of this denial and the demand for an overpayment. Please contact us so that we can review your claim and see if we can get you back to receivi... read more >

Sun Life

Sun Life is a real pain

Reviewed by Chris K. on May 20th 2022   Verified Policyholder
Sun Life is a real pain. I just want them to buyout my long term disability policy, but they keep playing around and around. I just to be left alone and given my lump sum ... read more >
Reply
Sent on May 20th 2022 by Attorney Rachel Alters

Chris, you can contact me at Rachel@diattorney.com and we can set up a call to discuss your buy out options.

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5 Ways We Help Get Your Benefits Paid

Get Your Disability Application Approved

Our goal is to get your application for disability income benefits approved. Applying for disability benefits can be a difficult process and the information you provide is critical. Most disability insurance companies look at your application in hopes of finding a reason to deny your claim. Your disability company will ask you to complete numerous forms, interview you, request lots of information, speak with your doctors and possibly request to have you examined by their "hired gun" doctor.

Through our experience of having helped thousands of disability insurance claimants, our lawyers will guide you through the entire application process and give you the best chance to get your disability claim approved the first time.

Submit A Strong Appeal Package

If your disability insurance benefits have been wrongfully denied, then our lawyers know exactly what it takes to get your disability claim approved. You only get once chance to submit an Appeal, therefore every piece of evidence that will support your disability claim must be included. The goal is to win your disability benefits at the Appeal level, but while preparing your Appeal you must consider how a federal judge will review your disability claim if your benefit denial is upheld.

Preparing a strong disability appeal package is an art that requires you to understand how the courts interpret your disability policy language, ERISA regulations / laws, and how to strategically present evidence in support of your definition of "disability". We encourage you to contact any of our lawyers for a free immediate review of your disability denial.

Sue Your Disability Company

98% of the disability insurance lawsuits filed by our law firm have resulted in either the payment of benefits or a lump-sum settlement agreement. Our disability lawyers have filed ERISA governed and private policy long term disability insurance lawsuits against every major disability insurance company in state and federal courts nationwide and we love fighting for the "little guy" against the multi-billion dollar insurance company giants.

We have recovered hundreds of millions of dollars for our clients and we would like the opportunity to provide you with a free review of your disability benefit denial. There are many complex factors in a disability benefit lawsuit and the legal battle to win long term disability benefits can be fierce.

Prevent A Disability Benefit Denial

Approval of long-term disability is a continuous process as every disability insurance company will evaluate your eligibility for benefits on a monthly basis. You can never let your guard down and assume that your disability company will continue to pay your benefits for as long as you think you need them.

Our law firm offers a reasonable flat fee monthly claim handling service in which we handle every aspect of your long-term disability claim and do whatever it takes to make sure you are paid every month.

Negotiate a Lump-Sum Settlement

Let's discuss if a lump-sum settlement or buyout of your disability insurance claim is both available and makes financial sense for you. Our lawyers have negotiated more than five-hundred million dollars in disability insurance buyouts and we know how to get you a maximum settlement. A disability insurance company is not required to offer a buyout and not every disability company offers them.

Questions About Hiring Us

Who are Dell Disability Lawyers?

We are disability insurance lawyers that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.

In more than 98% of our cases, our lawyers have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement. Our lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.

We welcome you to contact any of our attorneys for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 700 videos and regularly provide tips to help protect your disability benefits.

Who do you help?

Our lawyers help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.

Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.

A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via phone, email, fax, GoToMeeting sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-698-9159 or by email. Lawyers and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.