Most private companies that offer long-term disability benefits to their employees have plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). If an employer maintains or establishes a group disability insurance plan, fund or program, and the purpose of the plan is to provide disability benefits to plan participants, then the plan is probably subject to ERISA. About 85% of individuals who have disability coverage have it through an employer-sponsored program governed by ERISA. These employer-sponsored policies are often part of a larger employee benefits package that may or may not require employees to pay premiums or portions of premiums.

However, if an employer is not actively involved in the plan, makes no contributions to the plan, and employee participation is totally voluntary, ERISA may not apply. Some employers may allow employees to voluntarily have payroll deductions made in order to participate in a plan and/or allow an insurance company to publicize optional plan benefits to employees, but these plans likely are not subject to ERISA. So long as the employer receives no consideration, other than reasonable compensation for administrative tasks such as payroll deductions, in connection with the plan, then the plan probably is not governed by ERISA.

Likewise, local, state, and federal government agencies may offer long-term disability benefits, but ERISA does not apply to those benefits programs. Although California law does require that employers provide disability benefits for their employees, it does not mean that these benefits are subject to ERISA; ERISA doesn’t apply to insurance benefits that are in place solely to comply with state law. Certain disability benefits plans offered by churches also may be exempt from ERISA. Finally, employees who seek out disability insurance policies and pay for the premiums on their own generally are not participating in plans governed by ERISA.

ERISA claims are complex matters that require intensive knowledge of ERISA requirements and how they affect long-term disability insurance policies. As a result, you will need experienced legal representation and advice to pursue an ERISA-governed disability claim. Bonnici Law Group is a law firm focusing on ERISA long-term disability benefits and bicycle injury cases in San Diego, CA. When you need effective legal representation, contact Bonnici Law Group at 858-261-5454 or email us at help@bonnicilawgroup.com.