What is the Difference Between Group and Individual Long-Term Disability Policies?

What is the Difference Between Group and Individual Long-Term Disability Policies?

Many individuals have access to long-term disability benefits through a plan offered by their employer. These are group plans, since they cover all employees of a particular company. Most group plans are subject to the Employee Retirement Security Income Act, or ERISA, which is a federal law that regulates how insurance companies administer these benefits and the rights of individuals when an insurer denies benefits. There are a few group plans that are not subject to ERISA, such as group plans available through employment by a church, but the majority of plans are governed by ERISA.

Individuals who do not have access to a group long-term disability benefits plan through their employers, such as if they are not employed or work as independent contractors, can purchase individual long-term disability insurance policies directly from insurance agents or brokers. These plans are not subject to ERISA, which means that persons covered by these plans have individual rights and remedies to challenge any denials of benefits by their insurance companies. Among other forms of relief, individuals can sue their insurance companies for denying them benefits and seek various remedies through the court system, including a trial before a jury, if they choose. They can present admissible evidence during their trials, including, for example, the testimony of their treating physicians.

For individuals with plans covered by ERISA, however, the rights to challenge a denial of benefits are far more limited. First, you must jump through various levels of informal appeals or administrative reviews with your insurance company when you are denied benefits. Until you exhaust those administrative remedies, you are not permitted to sue your insurance company. Even after you have gone through those proceedings, however, you are limited to judicial review in federal court. There is no right to a jury trial or even a traditional hearing before a judge. Instead, the judge will simply consider the evidence that you previously submitted to the insurance company and issue a written decision based solely on that evidence. You are not permitted to submit any new evidence, and neither your insurance company nor the judge assigned to your case will ever hear testimony from your doctor. Due to these differences in rights, you may be at a larger disadvantage if you have long-term disability coverage through a group plan as opposed to through an individual plan. Bonnici Law Group has the experience and knowledge that you need as you seek compensation for your injuries and struggle to recover from them, both physically and emotionally. We know how to help you create and maintain a strong claim for relief supported by the evidence and obtain the best outcome possible in your case. Do not hesitate to contact Bonnici Law Group at 619-259-5199 or help@bonnicilawgroup.com.

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