Disability Benefits

ERISA: The Standard of Review When Determining if an Employee is Eligible for Pension Benefits, Disability Insurance, or Life Insurance

Section 502 of the Employee Retirement Income Security Act (ERISA) is a law that ensures that employees are given the work benefits that their employer provides.  (Section 502 of ERISA corresponds to 29 U.S.C. §1132).  If a company provides a benefit plan to employees, and the employee meets the standards to qualify for the benefits, the employer must provide the benefits to the employee.  Life insurance, disability insurance (both short term and long term benefits), and pension plans are types of plans that fall under ERISA. ERISA requires plans to provide participants with information about the plan and sets the minimum standards for participation in the plan, vesting, benefit accrual, and funding.   More specifically, ERISA is designed to help participants recover benefits due, enforce rights, and to clarify rights to future benefits under the terms of the plan.

Individuals participating in the plan are considered participants.  If a participant applies for benefits under the plan, and the plan administrator denies the participant’s claim for benefits the participant can ask the administrator to reconsider the claim.  (Appeals to the administrator are considered administrative appeals.)  A participant can bring their case to court once the opportunities for reconsideration at the administrative level are exhausted.  Often, ERISA claims are filed in federal court. 

If a participant chooses they can attempt to enforce their rights by bringing a lawsuit against the administrator.  In court, participants and administrators will often fight over the standard of review: de novo or abuse of discretion.  A brand new review is called a de novo review. Courts should conduct a brand new review to determine if a participant is eligible for benefits, unless the plan gives the administrator discretionary authority to award benefits.  If the judge proceeds with a de novo review he will review all records submitted to the administrator and potentially other records to reach a decision. 

Many plans incorporate language that give administrators discretionary authority to determine if a participant is eligible for benefits.   If the plan gives the administrator discretionary authority to decide if a participant is eligible for benefits, courts will review the claim by determining whether the administrator abused their discretion or made arbitrary and capricious decision. In abuse of discretion, the judge will only determine if the company came to a reasonable decision.   The abuse of discretion standard is not as favorable to the participant as a de novo review. 

Although plan administrators will often try to use language in their plan to ensure that courts use an abuse of discretion standard of review, sometimes the language the plan administrator uses is insufficient to permit courts to use the deferential abuse of discretion standard.  For example, an insurance company might not be able to rely on an abuse of discretion standard of review if they use language that states proof must be “satisfactory to us” to provide benefits.

If an employee is successful in court, they can be awarded the entirety of benefits due, court costs, and attorney fees. Hiring a knowledgeable attorney can help you in your ERISA claim.  If you need legal assistance for your ERISA claim, contact the Law Office of Phillip E. Chalker at phillip@attorneychalker.com or (443) 961-7345.

 

DISABILITY BENEFITS: A SOURCE OF MONEY FOR DISABLED INDIVIDUALS

If you are under the age of retirement and have a mental or physical impairment that has rendered you or is expected to render you unable to work for at least 12 months, you may be eligible for Social Security disability benefits – money that can be used for food, rent, groceries, etc. Most people are eligible to apply for disability benefits. Eligibility comes from having a good past work record, being in financial distress, or both. Even more, your child may be eligible for Social Security disability benefits if he or she has an impairment that interferes with his or her ability to function. Lastly, you could be eligible for benefits if a deceased spouse was unable to work for at least 12 months because of an impairment.

Despite the number of people that are eligible for disability benefits, the Social Security Administration often denies individuals disability benefits because the applicants did not adequately articulate the symptoms they experience and obtain necessary medical records. When filing out the adult function report as part of the initial application, it is important to detail all the ways that your impairment(s) affect you, without exaggerating. Exaggerations will hurt your credibility. So, be thorough but honest. Moreover, collect all medical records from all of your health care providers and submit them into the record. The person that is reviewing your file will lean heavily on these records. Also, if possible, ask your health care providers to opine why you are unable to work, not just that you are unable to work, and submit these opinions into the record. Opinions from doctors are relied on more heavily than other professionals’. But any opinion could help. Also, submit statements from family, friends, and teachers detailing the effects of your or your child’s impairment(s).

As for the application process, your initial application is viewed by State Disability Determination Services (DDS). If you are denied at the initial level, you can appeal the denial and DDS will review your application again. You can appeal to an Administrative Law Judge if denied a second time. After which, you have the opportunity for another appeal. As you go through the appeals process you can submit additional records. These additional records show how your disability continues to affect you.

Everyone that applies for disability benefits can seek the help of an attorney at any point in the process. Attorneys will not get paid, unless you receive benefits. Because the money owed to the attorney will come from past due benefits, it is easy to budget for an attorney. Social Security regulations dictate that an attorney, without applying for a special exception, is entitled to no more than $6,000 dollars or 25 percent of past due benefits whichever is less. Since benefits accrue as the appeals process continues, the earlier in the process that you receive a favorable decision, the less you have to pay an attorney.   

In sum, a good initial application will help you obtain benefits and reduce attorney fees.

-Phillip Chalker, Esq. is an attorney who practices Social Security disability law and provides affordable legal representation to low-income clients. If you have any questions, his email address is phillip@attorneychalker.com or you can call him at (443) 961-7345 .