About 28% of employees are covered by Group Disability insurance though their employment or professional associations. Most of these Long Term Disability (“LTD”) policies are issued by major insurance companies such as UNUM Provident, Aetna, CIGNA, the Hartford, the Standard, Lincoln Financial, Metlife, and Prudential. LTD benefits can provide a disabled person with additional monthly income above Social Security Disability (“SSD”) benefits, as well as bridge the gap between the onset of disability and when the disabled person’s SSD claim is approved by the Social Security Administration.
The majority of group Long Term Disability claims are governed by a federal law called ERISA, which stands for the Employment Retirement Income Security Act of 1974. ERISA was passed to protect worker’s pensions. But at the 11th hour, the insurance lobby convinced Congress to broaden ERISA’s scope to include “health and welfare benefits,” which included Long Term Disability insurance claims, health insurance claims and employer-provided life insurance claims.
Unfortunately for most employees, ERISA is federal law and pre-empts, or supersedes, state law. Claims for bad faith, mental anguish, and punitive damages are based on state law and, therefore, unavailable to a disabled person whose claim is governed by ERISA. The most that the insurance company might have to pay are the disability benefits due.
And, unfortunately, under ERISA, disability insurance companies are not bound by the Social Security Administration’s determination that a person is ‘fully disabled.” In fact, most of our clients have been approved for SSD benefits, but then had their claim for LTD benefits denied or terminated.
If your claim for LTD benefits has been wrongfully denied or terminated, feel free to call Evensen Law Office at 1-888-978-4048 (toll-free) or 502-587-1983 for a free initial consultation. We can discuss your specific situation and let you know whether we can help. We can explain the appeal or litigation process and answer any questions you might have.