Long term disability benefits can help replace critical lost income after becoming disabled. If your insurance coverage is provided through your employer, your claim will likely be subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). ERISA provides certain rules and protections that may not be stated in your policy. Here are nine things you need to know before filing for ERISA long term disability benefits.
Most ERISA long term disability policies contain an “elimination period” (also known as a “waiting period”) during which no benefits will be payable. The elimination period is usually 90 or 180 days. If your employer also provides short term disability benefits, the elimination period may run currently with your period of eligibility for short term disability benefits.
To receive benefits, you must satisfy your policy’s definition of “Disability” or “Disabled.” Some policies only require that you are unable to perform the duties of your “Own Occupation” or “Regular Occupation” (i.e., the occupation you were performing when you became disabled). Other policies have a different “Any Occupation” definition that kicks in after benefits have been payable for a certain period (usually 24 months). Once the “Any Occupation” definition is triggered, it becomes far more difficult to prove an ongoing disability. You’ll have to prove that you are unable to perform “Any Occupation” for which you may be (or may become) qualified by reason of education, experience, or training.
Your policy likely requires you to file a “Notice of Claim” within 20 to 30 days from the date you became disabled. Typically, it will suffice to send a brief letter that alerts your insurer that your claim for long term disability benefits will be submitted. Upon receipt of your Notice of Claim, your insurer will usually send you a series of forms to file your long term disability claim. These forms are called “Proof of Claim” (also known as “Proof of Loss”) and they must usually be submitted within 90 days from the end of the Elimination Period. If you miss these deadlines, your claim may be in great jeopardy.
Once you fully submit your ERISA long term disability claim, your insurer will have 45 days to decide it. This deadline may be extended by up to two additional periods of 30 days, but only if your insurer gives you proper notice and reason for the delay. If the extension requirements are met, your insurer would have a maximum of 105 days to decide your initial claim.
Most ERISA long term disability policies limit the duration of benefits payable for a disability caused by mental illness. Typically, the maximum duration is 24 months. If you have a disability that is caused by a combination of physical and mental conditions, this may substantially complicate your claim. To be paid beyond the 24-month limitation, you’ll need to prove that your physical condition alone is disabling.
To maximize your chances of winning, you’ll need your doctor’s support. Understand that your insurance company will periodically contact your doctor for information and updates on your medical condition. If your doctor is uncooperative, unresponsive, or unsupportive, your claim is far more likely to be denied.
The claims representative assigned to your case may request to interview you in person or by phone. Interview questions will include why you left work, what your job responsibilities are, and how your conditions prevent you from working. The representative may also ask about your activities of daily living to get a sense of how your disability impacts your daily life. Remember that the representative may act friendly, but the representative is not your friend. By conducting the interview, the representative is investigating your claim – looking for any reason it should be denied.
Check your policy to understand how much money you’ll receive per month while disabled. It may be much less than you anticipated. Most policies only provide a benefit amounting to 60% of your prior earnings. Those prior earnings may only include your salary while excluding bonuses or commissions. Also, your policy may cap your monthly benefit at a certain amount. For example, if you were making $200,000 per year with a benefit at 60%, your monthly benefit should be $10,000.00.
Your ERISA long term disability benefits will likely be taxable to you as income. Whether or not your benefits will be taxable depends on how your premiums were paid. If your premiums were paid with pre-tax dollars, the benefits will be taxable to you. If your premiums were paid with post-tax dollars, the benefits should not be taxable. For ERISA policies, it is more likely that your benefits were paid with pre-tax dollars and your benefits will be taxable.
Most ERISA long term disability policies will require you to apply for Social Security Disability Insurance benefits. If you’re approved for those benefits, the Social Security Disability benefit may cause an offset and reduction to your long term disability benefit. Essentially, your long term disability insurer will “recover” what Social Security pays you. However, there are other benefits to filing for Social Security Disability benefits, such as becoming eligible for Medicare coverage.
Navigating the ERISA long term disability claim process can be very complex and frustrating. An experienced long term disability attorney can help guide you through the process to maximize your chances of success. Contact Riemer & Associates, LLC to discuss how our attorneys can help win your long term disability claim.