Private vs. Group Insurance

The Difference Between Individual and Group/ERISA Disability Policies

By the attorneys of Disability Insurance Law Group

Our firm handles both private and group disability insurance claims at all stages of the process. While such policies have similarities, the difference between Group and Private Disability policies can be vast - mainly in the laws that typically govern each. Understanding the differences may be essential in understanding your rights under your disability insurance policy.

Group policies are policies obtained through your employment, an association, or other "group." They are typically boilerplate policies, with little deviation between beneficiaries. Occasionally, certain members of the group will be provided or allowed to obtain additional protection, different from the rest of the group. Private or Individual disability insurance policies are policies that you purchase from an agent, apart from any association with an individual group or organization. Typically, you are able to customize your policy or increase coverage by paying a higher premium.

Options in Fighting a Denied Claim Differ

The difference between the group and private policies is most drastic when it comes to your options if your insurance company denies a claim for benefits. Private or individual policies are governed under state contract laws. If your disability insurance claim is denied or unreasonably delayed by your insurance company, you may file suit in state court. At that time, you may gather your medical evidence, obtain expert medical and vocational opinions, and illicit testimony from your friends, family, and co-works that understand how your condition limits your abilities. Once you have prepared your case, you may then present it at trial.

ERISA

Many group policies are governed by the Employee Retirement Income Security Act of 1974, ("ERISA"). If a claimant's disability insurance claim is denied by his or her insurance company, the claimant must first write an appeal directly to the insurance company that denied the claim.

ERISA provides very strict guidelines and deadlines for claimants to meet when filing his or her appeal. Missing these deadlines and not abiding by the guidelines can be extremely detrimental to your claim and your future rights at trial. Unlike private disability insurance claims, if you fail to submit all of your information to your insurance carrier prior to or during your appeal, you will likely be forever barred from bringing forth any new information at trial if your insurance company denies your appeal. Thus, you must essentially prepare your claim for trial during your ERISA appeal.

This means that you must gather all of the evidence that you would want to submit at trial such as medical evidence, expert medical and vocational opinions, and testimony from your friends, family, and co-workers that understand how your condition limits your abilities and put it forth in your ERISA administrative appeal.

ERISA Appeals

Moreover, unlike a private disability claim, you are only given 180 days to gather your information for your appeal. While six months may seem like a long period of time, you must remember that you are essentially preparing all of your evidence for trial. It can often take up to two years to effectively prepare for a Private Disability Trial. This means that you must not waste time after your insurance company has denied your claim. Moreover, often insurance companies will not consider any information submitted after a denial your appeal. Thus, if you do not plan to submit all of your information at one time, you must make it very clear that any information you submit is not intended to be your full ERISA appeal. If you do not and your insurance carrier denies your claim again, it may argue that you exhausted all administrative remedies and attempt to prevent you from bringing forth additional information at trial.

The Importance of Experienced Legal Representation

Not all group policies are governed by ERISA. If your policy was provided through your government employment, your claim likely does not fall under ERISA. Moreover, many policies obtained through professional associations, are not governed by ERISA. However, insurance companies often claim that such policies are governed by ERISA, misleading claimants into believing their rights are more limited than they truly are.

Understanding the type of disability insurance policy that you have may be essential to understanding your rights and obligations under the law. Do not rely solely on the assertions made by your insurance company.

Our firm handles both private and group disability insurance claims at all stages of the process. We can answer your ERISA-related questions. If you are thinking of filing, have filed and been denied, are waiting for an answer, or are interested in a lump sum buyout of your claim, we encourage you to contact us to discuss your important disability insurance questions.