ERISA, short for the Employee Retirement Income Security Act of 1974, is a federal law that sets standards for most voluntarily established retirement and health plans in the private sector. While it covers a wide range of employee benefits, ERISA plays a particularly important role in the context of employer-sponsored disability insurance plans. For individuals filing disability claims under such plans, understanding ERISA is important. The rules governing these claims are very different from those for individually purchased policies.
At its core, ERISA was designed to protect employees by requiring plans to provide participants with clear information about their benefits, how those benefits are funded and how to file a claim. It also imposes fiduciary duties on those who manage and control plan assets, helping to ensure that plan administrators act in the best interests of participants.
Its effects on the disability claims process
When it comes to disability insurance, ERISA governs the claims and appeals process for most group policies offered through an employer. That means if your disability insurance is part of your benefits package at work, ERISA likely applies. While this framework provides some structure and deadlines, it can also place strict limits on the rights of claimants.
One of the most significant features of ERISA is that it creates a highly regulated administrative process. If your disability claim is denied, you must go through the plan’s internal appeals process before you can file a lawsuit. The timelines for these appeals are short, and missing a deadline can cost you the right to challenge the denial at all.
ERISA lawsuits are also limited in scope. Unlike other kinds of civil claims, there is no right to a jury trial, and courts typically review only the documents already submitted to an insurance company—no new evidence, no depositions and no live testimony. As a result, the quality and completeness of your initial claim file are unusually consequential.
Because of these restrictions, if your claim is denied, the path forward can be difficult. With the right legal guidance, however, you have a better chance of success.
