ERISA Disability Lawyer Calls For Changes To Unfair Law
Author: Gregory Dell
Published: 2014/04/03 - Updated: 2025/05/24
Publication Type: Informative
Category Topic: Disability Insurance - Academic Publications
Page Content: Synopsis - Introduction - Main - Insights, Updates
Synopsis: This article, written by disability insurance attorney Gregory Dell, critically examines the flaws in the current ERISA (Employment Retirement Income Security Act) disability claims process, highlighting how discretionary clauses in most disability policies give insurance companies excessive power to interpret plan terms and deny claims, often with little oversight from the courts. The author notes that federal judges, rather than making final determinations on whether benefits should be paid, frequently remand cases back to the insurance companies - even after finding unreasonable or arbitrary claim denials - forcing claimants, including people with disabilities and seniors, to endure prolonged financial hardship while awaiting resolution.
Examples from the article illustrate how this system allows insurers multiple opportunities to review and deny claims, leaving individuals without benefits for extended periods, which can be particularly devastating for those reliant on these payments for daily living expenses. The information is authoritative due to the author's extensive experience handling thousands of ERISA disability cases, making the analysis especially valuable for claimants, legal professionals, and advocates seeking to understand the systemic issues that disadvantage vulnerable populations - Disabled World (DW).
Introduction
Since the inception of the Employment Retirement Income Security Act (ERISA) in the 1970's it has undergone a few legislative changes and has resulted in thousands of legal opinions across the country. Second to the First Amendment of the US Constitution it is probably the most debated law / regulation of modern time. When it comes to short and long term disability insurance claims governed by ERISA, the opinions issued from Federal Judges on a weekly basis are unpredictable.
Main Content
As a disability insurance lawyer that has handled thousands of ERISA disability insurance cases it is disturbing to continuously read the inconsistent and often pro-insurance company decisions. ERISA disability insurance claims are always handled in Federal Court and they require a lot of work from both the lawyers involved and the Judge that is required to review the case.
Just like everything else in life, there are Judges that do a good job and really take the time to review a disability denial, and there are Judges that look for the easy way out and rush to make an uneducated decision. ERISA disability claims require courts to constantly review the latest case law and to understand the fiduciary obligation of a Plan administrator when reviewing a disability claim.
ERISA Plan administrators have a fiduciary duty to protect the rights of their plan participants and to conduct a full and fair review. Unfortunately most Plan Administrators, which are usually the insurance company employees, are looking for ways to deny a claim rather than approve a claim. To make matters worse, most disability policies have discretionary clauses, which give the insurance company plan administrator the right to interpret the terms of the plan and make the decisions they feel are appropriate. As a result of the discretionary clause, courts are required to give deference to the finding of the insurance company. This means that in an ERISA disability case containing a discretionary clause, the Court must make a finding that the disability carrier abused their discretion or acted arbitrarily and capricious. Approximately 90% of the litigated ERISA disability cases contain discretionary clauses.
There is an incredible amount of power given to these insurance companies, yet in most ERISA cases the Federal Judges will remand the claim back to the insurance company if they think the insurance company acted unreasonably in making a claim determination.
The court has the power to award benefits, yet they usually remand the case. The remand is a temporary success as it gives the claimant a lifeline, but it is not the ultimate success of having benefits paid. In most cases, Judges should be making final decisions and stop giving the insurance companies so many chances to review a claim a 3rd and 4th time.
While these multiple reviews are going on, a claimant is forced to sit on the sideline with no benefits and the insurance company continues to bleed out the claimant. If a Court finds that an insurance company abused their discretion or acted unreasonably, then the Claimant should be paid all past due benefits and the company can continue to evaluate the claim. Instead, our ERISA laws have been shaped so that the Insurance company gets multiple chances to review the claim and the Claimants needs to sit back and wait.
The ERISA laws need to be changed to allow a Jury to make a determination of disability benefits owed and Federal Judges need to stop remanding these ERISA disability claims. Insurance companies should know how to handle a claim and they should not be given the opportunity to correct the same unreasonable claim tactics that they have been using for years.
About the Author
Gregory Dell is a nationally recognized disability insurance attorney representing disability insurance claimants at all stages of a claim for either short term or long term disability benefits. Mr. Dell and his team of lawyers represent disability claimants nationwide and have handled claims against every major disability insurance company. Mr. Dell is an author of a text book on disability insurance claims and is Vice Chair of the American Bar Association Health and Disability Insurance Law Committee.