What is ERISA?

We’re frequently asked what ERISA is. ERISA is short for the Employee Retirement Income Security Act of 1974. It is the federal law that governs both how employers manage pension plans, and how health and disability benefits provided through employee welfare benefit plans are administered. The purpose of ERISA was to encourage employers to provide benefits to their employees by giving them more discretion in administering their benefit plans and providing a uniform legal review process across the nation.

ERISA applies to employee benefits provided or sponsored by private companies. ERISA does not apply to employee benefit plans provided by governments or churches. The employer can choose to pay the benefits itself, in which case it is called a self funded plan. Or, it may buy an insurance plan to provide benefits.

If ERISA applies, then State Laws about good faith and fairness in claims handling do not apply.
ERISA has its own laws and regulations about how benefits claims are to be handled.

If your claim for long term disability benefits is denied, you will have the opportunity to appeal the decision.  Under ERISA, you must go through all of the available appeals before you can sue your company’s benefits plan or the insurance company providing benefits.  Because all ERISA claims are governed by federal law, the benefit plan or insurance company has the right be in federal district court. If you file your case in the state superior court, it will most likely be removed to federal court, so you may as well start off in federal court.  While federal courts are perceived as being more corporation and defendant friendly, they also have a lot more experience with ERISA rules and procedures.

In an ERISA benefits appeal, you have to submit all of the medical evidence and arguments you ever want the company or a court to consider before the appeal deadline or ask for an extension in which to submit additional information. Except in rare circumstances, the court cannot consider anything that is not in your claim file at the time of the last denial of benefits. The insurance company or claims administrator does not have to consider an appeal that is submitted late, and a judge cannot consider any new doctors reports. Even if you come into court in a wheelchair with no legs, the judge cannot consider whether you are able to walk unless that fact has been provided to the insurance company or claims administrator  during the claim and appeal process. This is why it is important to get help in filing your appeal for long term disability benefits.