The Employee Retirement Income Security Act (ERISA) is a federal law that established standards for employer-sponsored benefit plans, including disability insurance. It governs the claims process and helps individuals whose benefits were wrongfully denied. While it is a federal framework, state laws can still influence disability claims. This blog will clarify how state laws can impact ERISA-governed disability claims to help individuals understand how this could impact their claims.
State Law Influence: Preemption vs. Exceptions
ERISA has a preemption clause, which takes the place of most state laws that relate to employer-sponsored benefit plans. This means that ERISA sets standards across states, but it can also limit state-level protections that might benefit claimants.
Exceptions to ERISA Preemption
- Savings Clause: Certain state laws regulating insurance are exempt from preemption. This allows states to enforce rules that directly impact insurance policies, like mandating specific benefits.
- Deemer Clause: Self-insured employer plans are exempt from state insurance regulations, as they are not considered “insurance companies” under ERISA.
State-Mandated Disability Protections and ERISA Interaction
- California’s Fair Claims Practices Regulations: State-mandated rules for processing insurance claims can influence how insurers handle ERISA claims under the savings clause.
- New York Disability Benefits Law (DBL): Requires short-term disability benefits for private-sector employees. While the administration of these benefits must follow ERISA rules for covered plans, the state mandates the baseline coverage.
State Insurance Regulations and ERISA Plans
- How state insurance laws impact policies purchased through insurance companies.
- Difference between insured and self-funded ERISA plans and why this distinction matters.
- Case study or example of a state law affecting an ERISA-governed insurance policy.
State Law Remedies vs. ERISA Remedies
If your disability claim is denied, the options for fighting back differ depending on whether your claim falls under ERISA or state law.
- What ERISA Offers: ERISA allows you to recover the benefits you’re owed, ensure the plan follows its rules, and sometimes recover attorney’s fees. However, ERISA doesn’t allow for punitive damages or compensation for emotional pain and suffering. This can feel frustrating for claimants who’ve faced significant hardship.
- What State Laws Add: In certain cases, state laws offer stronger protections. For example, some states allow punitive damages when an insurance company acts in bad faith. These state-level remedies can make a big difference in holding insurers accountable.
What This Means for Your Claim
The interplay between ERISA and state laws can be complicated to understand. Here are some tips to help you understand your claim:
- Check Your Plan Details: Is your disability plan insured through an insurance company or funded directly by your employer? This difference determines whether state laws might apply.
- Know Your State’s Rules: Some states have specific insurance protections that could strengthen your claim. Make sure to check your state’s rules to take advantage of any protections.
- Get Legal Help: You don’t go through it alone. Disability claims involve complex laws, and an experienced attorney can help you navigate them, challenge a denial, and fight for the benefits you deserve.
Protecting Your Rights in ERISA Disability Claims
Disability claims are already challenging enough without the added confusion of federal and state laws. But understanding how these laws interact can help you make the best decisions for your case.
If you’re dealing with a denied ERISA disability claim or have questions about how state laws might apply, don’t hesitate to reach out for help. Contact Unruh Law today for expert guidance. We’re here to help you navigate these complicated laws and get the support you need.