The Employee Retirement Security Act of 1974 (ERISA) is one of the most important federal laws that regulates disability benefits. It can have a major impact on both your long-term disability benefits and your Social Security benefits. At The Law Office of Paul J. Dombeck, PLLC, we help disabled people in Arizona secure the absolute maximum financial support. It is crucial that you understand ERISA. Here, our Phoenix ERISA disability attorney explains the law, how it can impact your long-term disability benefits, and the potential effect on Social Security benefits.
What is the Employee Retirement Security Act of 1974 (ERISA)?
The Employee Retirement Income Security Act of 1974 (ERISA) is a comprehensive federal statute that regulates employer-sponsored benefit plans, including long-term disability (LTD) insurance coverage and other policies. For long-term disability benefits, ERISA has standards for:
- How claims are processed;
- How decisions are made; and
- How appeals are handled if a claim is denied.
ERISA was put into place, in large part, to help protect employee benefits. However, the law is so complicated that many employers and insurers have developed strategies to tilt the claims process in their favor. For this reason, it is crucial that disabled people (claimants) and their families have access to a reliable ERISA attorney.
Note: ERISA requires plan administrators to provide clear information about the terms and conditions of a long-term disability policy. However, one of the most important—and potentially frustrating—elements of ERISA is how it can limit your legal options if a claim is denied. There are very specific procedures you must follow to challenge an ERISA disability denial.
ERISA and Long-Term Disability Claims: Timely Action By Insurers
ERISA sets up very specific rules on how long-term disability claims must be handled by insurance companies and plan administrators. First and foremost, when an employee files a claim for LTD benefits, the insurer must make a decision within a reasonable time frame—typically within 45 days. However, there can be extensions when needed. If a long-term claim is denied, the insurer must issue a written denial that explains the specific reasons for the adverse decision.
Know Your Right to Appeal an ERISA Long-Term Disability Denial
Appeals under ERISA are also governed by strict deadlines. Claimants usually have 180 days to appeal a denial. The initial appeal is called an administrative appeal. It is filed directly with the insurance company. That appeal must be thorough and supported by as much documentation as possible. In most cases, the court will only review the evidence that was included in the administrative record during the appeal process. For that reason, you should consult with a long-term disability lawyer before filing an administrative appeal.
Understanding How ERISA Disability Benefits and Social Security Benefits Work
Many long-term disability insurance plans require claimants to also apply for Social Security Disability Insurance (SSDI). If SSDI benefits are awarded, the LTD insurance provider often offsets the amount it pays by the amount received from Social Security. For example, if your LTD benefit is $2,500 per month and you receive $1,500 from SSDI, your LTD insurer may only pay you $1,000. You should refer to your specific policy to confirm the effect of Social Security disability benefits.
The interaction between LTD benefits and SSDI benefits can create confusion, especially since Social Security and ERISA plans actually apply different criteria. Social Security uses its own five-step sequential process. In some cases, SSDI is more favorable. In other cases, SSDI is actually restrictive. A denial from one does not necessarily mean a denial from the other. Still, each type of claim can have a broad impact on the other. You need a Phoenix disability lawyer who can help you navigate both your long-term disability claim and your Social Security disability claim.
Can I Get Both ERISA Disability Benefits and SSDI Benefits at the Same Time?
Yes, you can receive both ERISA long-term disability (LTD) benefits and Social Security Disability Insurance (SSDI) benefits at the same time. However, there are some complications, and a required offset may apply. Most ERISA-governed long-term disability plans require you to apply for SSDI if you’re approved for LTD benefits. This is because insurance companies often include what’s called an “offset” provision in their policies. In effect, whatever you receive from SSDI reduces what the insurer pays you through your long-term disability plan. How exactly the offset applies will depend on the policy language.
Do Social Security Retirement Benefits Impact ERISA Disability Benefits?
If you are receiving Social Security Disability Insurance (SSDI) and you reach full retirement age, your SSDI benefits automatically convert to regular Social Security retirement benefits. The amount usually stays the same, but from that point forward, the money comes from the retirement program instead of the disability program.
Many ERISA-governed LTD plans include offset provisions that reduce your monthly disability payments by the amount of any Social Security benefits you receive, including retirement benefits. So when SSDI transitions to retirement, the offset continues. In fact, some LTD policies reduce benefits even if you never got SSDI and go straight into early retirement.
How Our Phoenix, AZ, ERISA Attorney Can Help
ERISA is an extraordinarily complicated federal law. If you are applying for disability benefits through an ERISA policy, you need a skilled, experienced advocate on your side. At The Law Office of Paul J. Dombeck, PLLC, we provide solutions-focused advocacy to clients. Our team is here to help you with your disability claim and, if required, your disability appeal. An initial consultation with our Phoenix ERISA attorney is free, confidential, and carries zero obligations.
Set Up a Free Consultation With Our Phoenix, AZ, ERISA Attorney Today
At The Law Office of Paul J. Dombeck, PLLC, our Phoenix ERISA lawyer is standing by, ready to protect your rights. If you have any questions about the long-term disability benefits and Social Security benefits, please do not hesitate to contact us today for a free, no obligation consultation. With an office in Phoenix, we provide disability representation in Maricopa County and beyond.
