Private employers’ retirement plans in California and elsewhere are regulated by the Employee Retirement Income Security Act of 1974. Although this law focuses mostly on retirement plans, it has provisions that affect disability insurance plans offered by private employers as well. Understanding the protections afforded by ERISA is important for protecting one’s rights.
First, according to the law, employers have to give employees information regarding their ERISA disability benefits plans. This includes information that explains what is and is not covered under the plans. Also included should be instructions on how to file claims in the event that employees become disabled.
Sometimes a claim that an employee files ends up being denied. If a denial occurs, the provider of the disability insurance coverage legally has to explain the reason for the denial in writing. The employee whose claim was denied still has the right to appeal the denial.
If an appeal ends up being denied as well, then the employee can take legal action, which includes filing a lawsuit under the umbrella of ERISA. In the lawsuit, one can argue that the insurance company did not act properly by denying benefits. In these situations, judges will review for abuses of discretion and may be able to reject or overturn an insurance company’s decision to deny benefits. However, the process can be tricky without an applied understanding of the law. With proper legal guidance, one may be able to attain the benefits to which one feels he or she is entitled in the state of California.
Source: findlaw.com, “ERISA and Disability Benefits“, Accessed on Nov. 22, 2016