What Plans are Subject to ERISA?

The Employee Retirement Income Security Act (ERISA) governs many insurance policies, retirement benefits, or pensions provided by an employer. Most private-sector employer benefits fall under ERISA law; this includes:

• Partnerships, LLCs, S-Corporations, C-Corporations, and others
• Nonprofit Corporations and Charitable Organizations (except religious organizations, which may be exempt from ERISA)
• Businesses with one or more employees. There is no minimum number of employees for ERISA to apply to a business as long as they offer benefits

What Type of Employee Benefits are Covered by ERISA?

ERISA law applies to many types of employee benefits, including:

• Health insurance plans, health reimbursement accounts (HRAs), health savings accounts, dental insurance plans
• Some retirement accounts, including defined-benefit and defined-contribution retirement funds
• Scholarship and/or training plans
• Disability insurance plans (though some short term disability plans that are self-funded by the employer are NOT subject to ERISA)

How are ERISA Disability Benefits Different from Social Security Disability?

Were you employed when you became disabled? If so, and if your employer offers disability benefits (usually called “short term disability benefits” and/or “long term disability benefits”), then your plan is probably an ERISA plan.

If you were not employed when you became disabled, you are probably not covered by an ERISA disability plan. But if you have enough work credits, you may be eligible for social security disability benefits, also called “SSDI.” (Disabled and don’t have work credits? You may be eligible for a different type of social security income, called “SSI.”)

Social security disability benefits and ERISA disability benefits are both insurance plans. Social security disability pays benefits to people who have a long-term disability and can’t work, and the benefits are paid out of a national policy that is funded by us, the taxpayers.

An ERISA long-term disability policy is an optional insurance policy, either privately purchased through the marketplace or provided by your employer. Some short-term disability policies are covered by ERISA, too.

Though both are types of disability insurance, these policies operate very differently. Social security disability benefits are approved or denied based on clear guidelines, and appeals are typically reviewed by an impartial committee.

However, employer-sponsored ERISA disability insurance claims are approved or denied based on the insurance company’s internal guidelines (you get benefits if they say you get benefits). And although they won’t admit it, private disability insurance companies aren’t impartial – they worry about things that have nothing to do with YOUR disability, like profitability and their shareholders. So it’s not surprising to see some really, really bad ERISA denials. In fact, some ERISA insurance companies will deny valid claims repeatedly in the hopes that the policyholder will simply exhaust their appeals and go away. Don’t let that be you.

What Type of Attorney Should You Hire for Your ERISA Appeal?

You should contact an attorney who is experienced in ERISA law. This may or may not be someone who is experienced in SSDI cases. You need someone who can tell you:

1. Is this an ERISA-governed plan? Some short-term disability plans are not. Plans for most public school teachers and other government employees are not. Why does it matter? The rules about how long you have to appeal and what the insurance company has to provide to you can be very, very different.
2. If it is ERISA, did the insurance company follow ERISA guidelines when they denied your appeal? If you don’t call them out for their mistakes in your appeal, it will be too late to add new arguments if and when you need to file a lawsuit.
3. What should you do next? Do you have any appeals left for this claim? Or is it time to file a lawsuit?

ERISA is a niche practice in which few attorneys are experienced. BenGlassLaw is one of the few firms in Virginia that handles these cases, and we even teach other law firms how to handle ERISA claims. We do this because many well-meaning attorneys try to manage ERISA claims, but because ERISA is so complex, they often need assistance from knowledgeable ERISA attorneys.

ERISA long-term disability claims fall under federal law. ERISA attorneys can appear in federal court outside of the state where they practice if they apply for admission to appear before the district court. Generally, the biggest advantage you can give your case is hiring an experienced ERISA attorney, even if the attorney lives out-of-state.