By: Donna Russo, Esq.
Disability benefits under an employer insurance plan, subject to a few exceptions, are governed by a federal law commonly referred to as ERISA. ERISA claims are different from state law breach of contract claims. An ERISA claim is actually an appeal of the denial of benefits. The state court does have jurisdiction to conduct this review. However, most cases are filed in federal court because most likely the insurance company will insist on a federal venue and will file a motion to remove to federal court.
Generally, the issue in these cases is whether the plan administrator breached its fiduciary duty in denying disability benefits. The starting point is to review the policy language to determine whether the administrator was granted discretionary authority to determine eligibility for disability benefits. Depending on the authority given, there are different standards of review under which the denial of benefits will be reviewed.
In order to decide if the plan administrator breached its fiduciary duty under the applicable standard, the court’s review will be limited to the “administrative record” which is the insurance company file for your disability claim. A proper record is paramount when litigating the denial of disability. The record starts with your application for benefits and includes every communication, including doctor’s records, letters, telephone calls, e-mails etc..
Many times, the human resources department will assist you with filing the initial application for disability benefits. However, it is important that the application forms be filed out correctly so as not to prejudice your claim. These forms should properly set forth your diagnosis, the reason for your disability etc.. After the initial application, there are forms for your doctor to complete. Your doctor must accurately set forth the nature of your disability. Many times, the disability denial is based on information from your doctor in response to a generic form. The information your doctor provides should be specific as to the duties of your job and why you are unable to perform these job duties because of your disability. Also, the doctor’s notes must be consistent. Sometimes, a report from the doctor addressing the issues raised by the insurance company will be needed. In order to become part of the administrative record for review by the court, any report or other documentation must be submitted before the denial of the final appeal.
Most policies set forth that there are one, two and sometimes three levels of appeal. Before a lawsuit can be filed, the mandatory appeals must be filed and denied. There are set time periods, for an insurance company to respond to an appeal. Sometimes, if the insurance company does not respond, its failure to do so will be deemed a denial. However, before taking this position, your file should contain all the information required by the company or needed to clarify your position.