What Is ERISA? We Answer Your Long-Term Disability Insurance Questions
It can be hard to find reliable, understandable information about disability insurance law. Online search engines often confuse disability insurance and Social Security, which can lead to confusion and bad advice. At Bryant Legal Group, we focus our practice on disability insurance claims, handling both ERISA and private insurance issues.
In this blog, we answer 10 of our clients’ most common short-term and long-term disability insurance questions.
1. What Is ERISA?
ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is a federal law that controls many employer-sponsored benefits, including disability insurance, retirement, and pension plans. Congress passed ERISA due to worries about mismanaged pension funds and employee benefit funds. However, while ERISA does provide many protections, it also creates some distinct challenges.
Under ERISA, you must follow a strict claim and appeal process, and you cannot request a jury trial or demand compensation for bad-faith denial of benefits.
If ERISA does not cover your disability insurance plan, state law will guide your case. Under Illinois’ insurance laws, you can request a jury trial and file a bad-faith claim. While there are still procedural requirements, they are slightly more flexible compared to ERISA.
2. What Is Considered an ERISA Plan?
ERISA doesn’t cover all disability benefits. For example, Social Security disability benefits are a government welfare program, not an employer-sponsored benefit plan. Therefore, a different set of rules and procedures apply to Social Security claims. Please note that Bryant Legal Group does not handle stand-alone Social Security claims, although we can refer you to another respected law firm that does.
Privately purchased disability insurance plans, which are common among medical professionals, small business owners, and entrepreneurs, are also not covered by ERISA.
However, ERISA does not even cover all employer-sponsored disability insurance plans. You do not have an ERISA claim if your employer is:
- Affiliated with a religious organization (sometimes called a “church plan”)
- Part of the federal, state, or local government
- Uses one of several types of voluntary benefit plans
If you need help understanding whether your disability insurance policy is an ERISA plan, contact our law firm today.
3. What Does an ERISA Attorney Do?
ERISA and disability insurance lawyers help claimants get the benefits they deserve. It takes training and experience to understand and interpret the terms and conditions in short-term and long-term disability policies and apply them to your case. At Bryant Legal Group, our ERISA lawyers take a hands-on approach to their clients’ claims by:
- Asking questions, listening to you, and delivering practical legal advice
- Obtaining and explaining your Plan Documents and Summary Plan Descriptions
- Reviewing medical records and employment information to evaluate your eligibility for disability benefits
- Collecting evidence that supports your claims, including medical records, employment files, doctors’ statements, and expert opinions
- Completing applications for benefits on your behalf
- Responding to the insurance adjuster’s questions and requests for more information
- Submitting administrative appeals when the insurance company denies your ERISA claim
- Negotiating settlements with insurance company representatives
- Filing lawsuits in federal and state courts, when appropriate
- Communicating closely with you and educating you about your legal options at every stage
4. Who Needs Disability Insurance?
At Bryant Legal Group, we think that disability insurance is an essential part of your long-term financial plan, whether it’s part of your employee benefits package or privately purchased. Short-term and long-term disability benefits step in and provide financial support when you’re unable to work due to an injury, illness, or chronic medical condition. For many of our clients, their disability insurance payments give them peace of mind and the space to focus on their recovery.
If you do not have short-term or long-term disability coverage through your employer, we would strongly encourage you to speak with an insurance agent about personal disability plans. Many self-employed professionals, including doctors, dentists, business owners, and entrepreneurs, could benefit from an affordable, well-written disability insurance policy.
5. How Much Does Disability Insurance Pay?
Every disability insurance plan has different terms and conditions. To understand your policy’s benefit structure, you’ll need to review your Plan Document or Summary Plan Description. These two documents outline the essentials of your long-term or short-term disability coverage.
Most disability insurance plans pay disabled individuals a monthly benefit between 50–60% of their gross income. If you need help understanding or calculating your benefits, contact us for a free consultation. You can also contact your employer’s HR department or your insurance agent for general information.
6. When Can You Use Short-Term Disability?
You can apply for short-term disability benefits when you’re unable to work due to an injury, illness, or chronic condition. Our clients have asked for short-term disability for countless reasons, including trauma from car accidents, surgeries, cancer, mental health issues, and relapsing-remitting conditions like multiple sclerosis.
Most short-term disability policies use an “own occupation” definition of disability, so most people receive benefits if they can show that they are unable to do their actual job. While rarer, some short-term disability plans do apply the more restrictive “all occupation” standard, where you must show that you are unable to do any type of work.
Finally, short-term disability policies often involve a relatively short waiting period before you can apply for benefits. Called an “elimination period,” this waiting period can range from a few days to a month. To identify your plan’s elimination period, you can either read your Plan Document or Summary Plan Description or contact a disability insurance lawyer.
7. How Long Does Short-Term Disability Last?
As the name implies, you can only receive short-term disability benefits for a limited time. The duration of your benefits will depend on the terms and conditions in your policy. Most short-term disability insurance plans will pay benefits for between three months and one year. However, if your condition improves and you can return to work before that time, the insurer will terminate your benefits.
If the insurance company claims you’re no longer eligible for short-term disability because you can work or due to a limitation in your policy, contact an experienced ERISA lawyer. Sometimes, adjusters make mistakes or intentionally make misleading statements about your eligibility.
8. What Happens When Short-Term Disability Ends?
Once your period of short-term disability benefits ends, you may become eligible for long-term disability. However, you will need to reapply for benefits and resubmit your evidence.
LTD policies often include stricter definitions of disability. So, even if the adjuster approved your short-term claim, it doesn’t mean they’ll do the same when you apply for long-term disability benefits.
9. How Does Long-Term Disability Work?
In many ways, long-term disability works like a short-term disability claim:
- You apply for benefits and provide evidence supporting your claim.
- The adjuster investigates your disability and mails you a decision.
- If the insurance company denies your LTD claim, you can appeal.
If approved, you may get long-term disability benefits until you reach retirement age. Because of this longer benefit period, LTD benefits are more costly, and insurance companies and their adjusters take a harder line on these claims.
10. What Qualifies as a Long-Term Disability?
To receive long-erm disability benefits, you generally must show that your injuries, illness, or medical conditions will disable you for at least 12 months. Most long-term disability plans use an “all occupation” definition of disability, so you must show that you cannot do any work due to your medical conditions or injuries. Even if you can only perform a very limited part-time job, like working as a grocery store greeter, you may be ineligible for LTD benefits, or your benefits may be reduced.
However, your plan’s definition of disability may be different. Some policies only require that you’re unable to do your own occupation; this is more common with individual policies that are purchased privately.
Bryant Legal Group: Chicago’s Trusted Disability Insurance Team
At Bryant Legal Group, we’ve built a reputation for our practical, compassionate, and client-focused approach. We help individuals with a wide variety of illnesses and injuries get the short-term and long-term disability benefits they deserve. Our team has recovered millions in compensation for our clients, and we can help you understand your options.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.