Different Definitions of Disability for Insurance Claims and ERISA

Ian C. Langtree - Writer/Editor for Disabled World (DW)
Published: 2012/08/18 - Updated: 2021/08/06
Category Topic: Disability Insurance - Academic Publications

Page Content: Synopsis - Introduction - Main

Synopsis: A recent disability insurance claim case may change the landscape of disability claims brought under the Employee Retirement Income Security Act. Disability insurers around the country all have slightly different definitions of what they consider a full-fledged disability, with some companies requiring more medical evidence than others do.

Introduction

The Different Definitions of "Disability" - A case from the Seventh Circuit, the court reinstated disability benefits, noting the insurer used an arbitrary standard to terminate the patient's benefits. A recent case in the Seventh Circuit Court of Appeals - Holmstrom v. Metropolitan Life Insurance Company - could possibly change the landscape of disability claims brought under the Employee Retirement Income Security Act (ERISA).

Main Content

ERISA

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. In general, ERISA does not cover group health plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment, or disability laws.

ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans. ERISA does not require any employer to establish a pension plan. It only requires that those who establish plans must meet certain minimum standards. The law generally does not specify how much money a participant must be paid as a benefit.

Disputes

Disputes involving insurance claims that fall under the purview of ERISA are decided by federal courts. Illnesses of the type developed by Holmstrom (hers was a painful nerve condition that caused severe pain in her right arm and hand) are often difficult for insurance adjusters to quantify since they show no outward signs of medical defect.

Disability insurers around the country all have slightly different definitions of what they consider a full-fledged disability, with some companies requiring more medical evidence than others do. Some use the same standards of proof as the Social Security Administration (SSA), while some require more evidence, in the form of clinical findings, anecdotal reports and physician narratives. Others require less tangible proof.

The Holmstrom case was remanded by the Seventh Circuit Court of Appeals with instructions that the case be settled in the Illinois federal court where the dispute was originally filed.

The Court recognized the possible precedential value of the case, saying that it essentially personified the "difficult problems presented by claims for disability insurance by people with serious and painful conditions that do not have objectively measurable symptoms." The case could have an impact on ERISA and standard disability claims in states in the Seventh Circuit and throughout the country.

Conditions like chronic pain, chronic fatigue syndrome (sometimes known as "chronic fatigue and immune dysfunction syndrome") and fibromyalgia have no singular diagnostic test that will provide objective evidence of a debilitating condition. These conditions - like the nerve condition suffered by the plaintiff in the Holmstrom case - are usually diagnosed by ruling out other, more easily quantifiable conditions that would cause the same symptoms.

Disability insurance claims for so-called "invisible" conditions are often denied. That is not to say that benefits are never awarded to claimants suffering from one of these systemic conditions, but additional effort may be required. The aid of a skilled ERISA or disability benefits attorney can also make a huge difference in the success of a claim seeking disability insurance payments.

Author Credentials: Ian is the founder and Editor-in-Chief of Disabled World, a leading resource for news and information on disability issues. With a global perspective shaped by years of travel and lived experience, Ian is a committed proponent of the Social Model of Disability-a transformative framework developed by disabled activists in the 1970s that emphasizes dismantling societal barriers rather than focusing solely on individual impairments. His work reflects a deep commitment to disability rights, accessibility, and social inclusion. To learn more about Ian's background, expertise, and accomplishments, visit his full biography.