Disability and Benefits Law

Elliot Morgan Parsonage (EMP) has attorneys who have years of experience in litigating all types of ERISA claims. Their experience includes the following: • EMP has handled numerous LTD claims and recovered substantial benefits for disabled employees, both in the administrative process and in court. EPM enjoys a very high success rate in this regard. Among many successes, EMP has assisted clients obtain previously denied benefits and future benefits who have disabilities such as: multiple sclerosis, lupus, fibromyalgia, cancer, failed back syndrome and mental illnesses. • EMP has won an award of over $600,000 in benefits, fees and costs for a former executive against a large company for its wrongful denial of severance and retirement benefits after a trial on the merits in the United States District Court. • EMP is pursuing a class action against a large corporation for the fiduciary’s action in divesting its 401(k) plan of stock at a substantial loss to the participants of the plan. • EMP has obtained needed medical treatment for participants of healthcare plans.

Other common ERISA group benefits include:

• Healthcare benefits (including medical, hospitalization, prescription and dental coverage);
• Pension or retirement benefits;
• Severance pay in the event of the termination of employment;
• Life insurance

ERISA is a complex and confusing body of law. Most company administrators are well-trained in the law, and know how to use ERISA to their advantage. As pointed out above, a claim can be lost if deadlines are not met, if the administrative review is not exhausted, or if all pertinent evidence is not submitted during the administrative process. Thus, it is critical that you obtain representation as early as possible in the administrative process in order to maximize your chances of recovering benefits and to increase the likelihood of gaining reversal of a wrongful denial if legal action becomes necessary.

ERISA permits an employee who has been denied benefits to institute legal action in state or federal court. However, the employee’s rights in court are much more limited than in most cases. Under ERISA there is no right to a jury trial; lawsuits are decided by a judge. The amount of recovery is limited to the unpaid benefits, and sometimes interest, costs and attorney’s fees. Unless the employee can demonstrate that the administrator abused its discretionary authority if the plan gives the administrator that authority, the judge must give deference to the administrator’s decision. Nevertheless, the decision denying benefits may be reversed if the court finds an abuse of discretion.

ERISA imposes duties and responsibilities on employees and administrators when a claim is denied. First, the administrator must make a reasoned decision concerning the employee’s claim after a full and fair review of the facts. This means that the administrator must obtain information and documentation concerning the claim, and permit the employee to submit supporting information. Second, the administrator must inform the participant in writing of its decision and the specific grounds for its determination. Finally, the plan must provide an appeals procedure, and must inform the employee of her right and means to appeal the denial. An employee, in turn, must exhaust all administrative remedies before filing a lawsuit. The administrative process is generally provided in the plan itself, and failure to fully comply with the procedure can result in dismissal of the claim. In addition, it is critically important to submit all supporting information to the administrator during the administrative process. As a general rule, only evidence included in the administrative record will be considered by the administrator, and subsequently, by the reviewing court. There are various time limits established by ERISA and its regulations, as well as the plan. These limits impose deadlines on the employee in providing information and proof regarding a claim and on the administrator for making its decision. Failure to meet the deadlines will limit the employee’s ability to submit additional information for his claim and will ultimately limit the evidence in a lawsuit. It is, therefore, critical that deadlines are met.

There are two types of disability plans generally provided by employers. Short term disability (STD) plans commonly provide for benefits in the event an employee is totally disabled from work due to sickness or injury. These plans provide for benefits for several months, or until the long term disability plan is applicable. Long term disability (LTD) plans cover disabled employees who are unable to work after a “waiting period” (ordinarily 90 days to several months), the period during which STD, sick pay or salary continuation plans apply. Most LTD plans provide compensation for the period of disability until an employee reaches age 65 years. Under many plans, an employee is deemed disabled if he cannot perform his own occupation for a period of time—generally 24 months; and after 24 months, total disability may be defined to require that the employee cannot perform any work. Disability can be based on physical or mental conditions. However, benefits based entirely on mental disability are commonly limited to a fixed period of time, generally 24 months. Some plans include limited benefits for certain types of physical conditions or injuries, as well. When eligibility is established, the amount of benefits is generally calculated as a percentage of the employee’s average monthly earnings. The disabled employee may also be required to file a claim for disability compensation with the Social Security Administration. Most plans allow LTD payments to be reduced by the amount of Social Security benefits as well as other income received by the employee.

A plan includes a written document providing the rights of the parties and the procedure for claiming benefits; a named administrator or other fiduciary who will make discretionary decisions determining eligibility and coverage under the plan; a procedure specifying the ongoing responsibilities of the administrator with respect to implementation of the plan and investment and commitment of plan funds; a procedure for amending the plan; a plan for the protection of any plan assets; and a claims procedure. ERISA provides that an employee has a right to the plan and other documents concerning the plan. In addition, ERISA requires that the employer or administrator provide to employees a summary plan description (SPD) which is a summary of the plan itself. Many employers provide these summaries in the form of a benefits manual or personnel handbook. An employee should always request a copy of the plan and other necessary documents since the language of the plan is critical. On appeal, the claimant should also request a copy of the claims file, which should include the evidence on which the company’s denial was based. The request for plan documents should be made in writing and sent by certified mail. Administrators who fail to provide these materials within thirty days are subject to statutory penalties of up to $100 per day.

Group benefits which are administered by the employer are generally covered by a federal law known as ERISA (Employee Retirement Income Security Act), a federal statute that was initially enacted in 1974 to protect the retirement benefits of employees, called plan participants. As the legislation passed, it was expanded to cover all types of benefits administered by an employer. On the other hand, benefits independently purchased by the employee and not administered by the employer are covered by state contract or insurance law. ERISA plans have an administrator, generally the employer or an insurance company, who is given the legal power to administer the plan, protect the plan assets, and to make discretionary decisions determining a participant’s qualifications for coverage and rights to benefits. Because the administrator has the discretionary power to administer the plan, the administrator also has the strict responsibility to act as a fiduciary with complete fairness and honesty in the interests of the plan and its participants and beneficiaries.