What Every Disability Policy Holder Needs To Know About an ERISA Disability Plan

You may have purchased your disability policy through your employer and , if so, you need to understand the basics of an ERISA Plan.

ERISA stands for the Employer Retirement Income Act.  The ERISA statute was enacted in 1974 as a result of the Jimmy Hoffa pension scandals.  ERISA was designed to provide and protect employee pensions and other employee benefits such as group health, disability and life insurance.

An employer is not required to have any type of benefit plan.  It’s a voluntary act by the employer or sponsor.  A plan can be amended, changed or even terminated at any time by an employer or sponsor.  However, vested pension benefits generally cannot be reduced.

What Are The Key Elements Of ERISA Benefit Plans?

The United States Supreme Court held in Great Western Life and Annuity Insurance Company v. Knudson, 534 US 204, 209(2002) that ERISA covers the entire area of employee benefits and that any remedies not provided to policy holders in the ERISA statute won’t be supplied by the court.

• Preemption

The ERISA statutes prevents virtually all state law claims such as breach of contract, fraud, misrepresentation or other tort claims.  However, it does not preempt state laws that regulate securities, banking or insurance or federal employment laws.

• The Employer Must Be Private

The ERISA statute doesn’t apply to employee benefit plans provided by a governmental agency, like a City of State, or a church who has adopted a church plan.

• There Must Be A Plan

An employer can allow a company to come into its place of business and sell group benefits to its employees.  If the employer limits itself to collecting the premium, the plan may be exempt from the ERISA statute.  The courts can find that this type of arrangement falls within the ERISA’s “safe harbor” provisions.

ERISA will only cover the benefits provided pursuant to a plan which is sponsored and maintained by employer or another plan sponsor.

• There Must Be Entitlement To The Benefit Or A Future Benefit.

Under ERISA, an employee is required to be a participant in the plan and you can only sue if you have standing which is an entitlement to benefits or future benefits.  Otherwise, you have no right to sue for benefits.

How Can I Tell If My Plan Is An ERISA Plan?

Determining whether a plan is in fact an ERISA plan can be difficult.  It is crucial that you know the difference before you stop working and apply for benefits.  Benefits in an ERISA policy can be limited and, if your claim for benefits are denied or terminated, you’ll only have 180 days to file an appeal.

What Should I Do Before I Apply For Benefits?

Contact ERISA attorney Nancy L. Cavey who can help you determine your entitlement to benefits regardless of where you live in the United States.  Call today at 727-477-3263 for  complimentary consultation