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Disability
benefit denials come in
two forms: ERISA Plans and NON-ERISA plans. Disability
benefit denials are different than Social Security Benefit
Denials.
NON-ERISA Plans. A Non-ERISA
plan is a plan not provided to you by your employer. For
instance, you contact an insurance company directly and pay for
a disability plan on your own. Or, you work for a
governmental entity such as a school board, and the school
offers a discount plan that is not sponsored by the school
board. A Non-ERISA plan is treated more like a breach of
contract claim, although some of the same law applies to a Non-ERISA
case as an ERISA case.
What is the Employee Retirement Income Security Act?
ERISA is the
acronym for the Employee Retirement Income and Securities Act.
The Employee Retirement Income Security Act of 1974 (ERISA) is a
federal law that sets minimum standards for most voluntarily
established pension and health plans in private industry to
provide protection for individuals in these plans.
The goal of ERISA
is to protect employee benefit plans, such as retirement and
health care plans by providing insurance benefits and, setting
requirements for the plan. It also provides a set of rules for
employees and “plan fiduciaries” to follow with respect to the
management of these plans, including grievance procedures,
administrative procedures, and procedures for funding the plan.
In general, ERISA
does not cover group health plans established or maintained by
governmental entities, churches for their employees, or plans
which are maintained solely to comply with applicable workers
compensation, unemployment, or disability laws. ERISA also does
not cover plans maintained outside the United States primarily
for the benefit of nonresident aliens or unfunded excess benefit
plans.
Our office handles cases that
arise from Short-term and Long-term disability benefit plans.
To help us establish whether you have a claim you should
determine first whether your potential claim arises from a
benefit plan. You may also need to know who sponsor’s your plan
(Plan Sponsor), who administers your plan (Plan Administrator)
and who acts as the plan’s Fiduciary.
The following sections will
help you understand how to determine this information if you do
not have a copy of your
Plan
(documents describing your
benefits) or your
Summary Plan
Description which should
contain “the name and type of administration of the plan”;
registered agent information; who the administrator of the plan
is including their address; the “name, titles, and addresses of
any trustee or trustees;”. . . “the plan’s requirements
respecting eligibility for participation and benefits;” . . .
“circumstances that result in disqualification or loss of
benefits”. . . the end date of the plan; . . . and “procedures
for filing benefit claims.”
What
is a benefit plan? A
benefit plan is “. . .any plan, fund, or program which was
established or maintained by an employer or by an employee
organization, or by both, to the extent that such plan, fund, or
program was established or is maintained for the purpose of
providing for its participants or their beneficiaries, through
the purchase of insurance or otherwise (A) medical, surgical, or
hospital care or benefits, or benefits in the event of sickness,
accident, disability, death or unemployment or vacation
benefits, apprenticeship or other training programs, or day care
centers, scholarship funds, or prepaid legal services . . .”
The plans are covered if the
plan was “. . . established or maintained by and employer
engaged in commerce or in any industry or activity affecting
commerce or by any employee organization or organizations
representing employees engaged in commerce or in any industry or
activity affecting commerce or by both.”
Not all plans are covered by
ERISA. For example, Section 4(b) says that ERISA does “not
apply to any employee benefit plan if . . . [the] plan is a
governmental plan, . . . a church plan with respect to which no
election has been made under section 410(d) of the Internal
Revenue Code, . . . is maintained solely for the purpose of
complying with applicable workmen’s compensation claws or
unemployment compensation or disability insurance laws, . . .
is maintained outside of the United States primarily for the
benefit of persons substantially all of whom are nonresident
aliens . . . or . . . is an excess benefit plan and is
unfunded.”
However, you
may have a contract action even if your plan is not an ERISA
plan. You should contact our office or consult with an attorney
in your area to further determine whether a claim exists.
Who is
Covered by ERISA? ERISA
tells us that an employee may be covered under ERISA if the
employee is or was a participant of a plan. A participant is
“any employee or former employee of an employer, or any member
or former member of an employee organization, who is or may
become eligible to receive a benefit of any type from an
employee benefit plan which covers employees of such employer or
members of such organization, or whose beneficiaries may be
eligible to receive any such benefit.”
A
beneficiary is “a person
designated by a participant, or by the terms of an employee
benefit plan, who is or may become entitled to a benefit
thereunder.”
Who is an
employer? An Employer
is “any person acting directly as an employer, or indirectly in
the interest of an employer, in relation to an employee benefit
plan; and includes a group or association of employers acting
for an employer in such capacity.”
An employer can also be an
organization such as “ any labor union or any organization of
any kind, or any agency or employee representation committee,
association, group, or plan, in which employees participate and
which exists for the purpose, in whole or in part, of dealing
with employers concerning an employee benefit plan, or other
matters incidental to employment relationships; or any
employee’s beneficiary association organized for the purpose in
whole or in party of establishing such a plan.”
Who is a
Plan Administer? A plan
administrator is“a person specifically so designated by the
terms of the instrument under which the plan is operated” and
where an “administrator is not so designated, the plan sponsor
or in the case of a plan for which an administrator is not
designated and a plan sponsor cannot be identified, such other
person as the Secretary may by regulation prescribe.”
Who is a
Plan Sponsor? A plan
sponsor is “the employer in the case of an employee benefit plan
established or maintained by a single employer, the employee
organization in the case of a plan established or maintained by
an employee organization, or in the case of a plan established
or maintained by two or more employers or jointly by one or more
employers and one or more employee organizations, the
association, committee, joint board of trustees, or other
similar group of representatives of the parties who establish or
maintain the plan.”
What is a
Fiduciary? a fiduciary
with respect to a plan is a person who “exercises any
discretionary authority or discretionary control respecting
management of such plan or exercises any authority or control
respecting management or disposition of its assets; renders
investment advice for a fee or other compensation, direct or
indirect, with respect to any moneys or other property of such
plan, or has any authority or responsibility to do so, or; has
any discretionary authority or discretionary responsibility in
the administration of such plan . . .” and includes any person
the “named fiduciary designates other than the named fiduciary
to carry out fiduciary responsibilities other than trustee
responsibilities under the plan.”
The
Employee Benefits Security
Administration (ESBA)
is the Department of Labor’s subordinate organization that
oversees ERISA. According to the ESBA’s mission statement, it
is the ESBA’s goal to: assist workers in getting the information
they need to exercise their benefit rights; assist plan
officials to understand the requirements of the relevant
statutes in order to meet their legal responsibilities; develop
policies and regulations that encourage the growth of
employment-based benefits; deter and correct violations of the
relevant statutes through strong administrative, civil and
criminal enforcement efforts to ensure workers receive promised
benefits. The DOL promulgates regulations that help employees,
legal professionals, law makers, judges, and employers to fully
comprehend their responsibilities under ERISA. The regulations
also expand penalties and further the statutory requirements
under ERISA |
