There are a couple of differences between a private claim and an ERISA claim.
No.1 and probably the biggest problem with ERISA is that you are not entitled to a jury trial when a claim is governed by ERISA. So, which essentially means if you don’t have the right to a jury trial that means that a judge is going to make the decision for you and it gets even more complicated than that. When the judge is asked to make a decision after a person has exhausted all his appeals, the judge has to decide as to whether the insurance company acted in an arbitrary or capricious manner. Basically, the judge is asked if the insurance company acted reasonably. For an insurance company to go ahead and act reasonably, they basically just have to have a person’s medical records reviewed, possibly speak to their doctor, it is a very low threshold for the insurance company which makes it an easy threshold for them to overcome, so that when it gets to the court and the judge is asked if the insurance company acted unreasonably, usually 8 out of 10 times the judge has to find that they acted reasonably even if he thinks that the person is disabled.
The second biggest problem with an ERISA claim is that, there are no penalties against the company. For example, if a person comes and to me who bought a policy on his own and was denied benefits, we could immediately go ahead and file a lawsuit. With the ERISA claim we have to exhaust the administrative remedies and then file a lawsuit. If the company is proved to have wrongfully and intentionally or recklessly denied their benefits, there are extra contractual penalties that can be had against this disability company. With ERISA, there are no penalties against the company. So essentially at the end of the day if you prove that the insurance company was wrong at the end of the day, you get your money and you get a sorry saying “we were wrong” but there are no remedies whatsoever. And that process, going through all the appeals, filing a lawsuit can take several years and at the end of the day the only responsibility an insurance company has is to pay you your benefits, some interest on a judgment and possibly pay your attorney’s fees.