What is ERISA and how does it affect my disability claim?

There are two ways by which to get long-term disability plans: there’s the employer plan, one which is granted to an individual by his employer once he starts working with them, and there’s the individual plan, one which you he purchases himself from an insurance company. Both plans, however, are contractual in nature, and the appeal process is stated in the contract. With this, before there can be any litigation for the denial of benefits, the appeal process in the contract must be complied with first. This means that all administrative efforts must be exhausted before any case can be filed in the court of law.

An individual plan is governed by common law on contracts, while an employer plan falls under the law called ERISA or Employee Retirement Income Security Act. While in common law, one can file a case of Breach of Contract, an ERISA claim is not a claim of Breach of Contract but an appeal from a denial of benefits. Under ERISA, the court will decide on whether the plan administrator breached his duty when he denied an individual his benefit claim. Now, ERISA affects the claims procedure for long-term disabilities because it is the law that provides for specific procedures to follow when filing such claims. It clearly states what administrative work must be done before the case can be taken to court.

When filing an ERISA claim, the most important thing an individual needs is to first and foremost wholly understand the stipulations in his contract. He must also have on hand medical records, doctors’ observations, and all other pertinent administrative records and reports since, commonly, other information cannot be added anymore after the first denial.