Disability insurance (also referred to as "long-term disability insurance") is intended to protect employees from the devastating economic effects that can result from a disability that prevents a person from performing his or her job. These can be either mental or physical disabilities.
Frequently, a disabled employee is entitled to short-term disability benefits for a set number of weeks and long-term disability benefits that cover a much longer time period. The disability benefit pays a portion of the individual’s monthly salary, often between 50% and 70%.
Types of Disability Insurance
Some disability insurance plans are purchased in the private market from an insurance company, while others are provided by employers.
Employment plans are covered by ERISA (Employee Retirement Income Security Act of 1974), a complex federal law that provides extensive rules which govern employee benefit plans. Disability insurance plans purchased in the private market in New York are, generally, subject to state law claims such as fraud and breach of contract.
It is important to understand what type of policy you have because the legal aspects of the two differ substantially.
The Claim Procedure
In virtually all cases, the policyholder starts by filing a claim with the insurance plan. Sometimes the insurance company will honor the claim, sometimes it will not.
If there is a denial, employment plans governed by ERISA require the exhaustion of administrative appeal procedures (which will be set forth in the plan) before an action can be filed in court, and these lawsuits frequently are heard in federal court. It is important to have a lawyer who understands the appeal process, because these appeals are extremely important. The appeal must be drafted in a comprehensive manner, as omitted documents may not be allowed into evidence in a subsequent lawsuit.
With a private disability insurance plan, the case may be filed in a New York state court, which is generally more favorable for the insured than federal court.
It is important to have a lawyer with excellent writing skills, who understands medical terminology, and who can convey legal arguments and concepts clearly, because disability insurance cases frequently are decided based on the written submissions provided to the insurance company or to a court. We have been successful in overturning disability insurance denials due to the strength of our written submissions.
What Information Do You Need?
Perhaps the most important information needed to support a disability insurance claim is medical records and perhaps a narrative report from a treating physician. Frequently, the relevant legal standard is whether the insured can perform the material duties of his or her occupation, and the answer will often turn on what is contained in the medical records and physician reports.
It is also important to have, among other things, a copy of the disability insurance plan, summary plan description (SPD), and the insurance company claim file.
While we are always available to be hired at an hourly rate, we often represent clients in New Jersey and New York disability insurance cases based on a contingency fee model. That is to say, the client only pays us if we win or settle the case, and does so out of a percentage of the recovery.
If you have suffered from the denial of a disability insurance claim, you can call New Jersey and New York Disability Lawyer Eric Dinnocenzo at (212)933-1675 for a free consultation.