Long Term Disability (LTD) insurance claims are typically governed under federal ERISA regulations. If a claimant goes through the administrative appeals process and is denied his or her disability benefits, the claimant may file a civil lawsuit after every administrative remedy has been exhausted.
Contrary to an individual disability policy which is governed by state law, federal courts may have jurisdiction over ERISA long-term disability cases. Policyholders whose benefits have been denied or terminated may not have a right to a jury trial in ERISA cases.
Filing an ERISA disability lawsuit in Maryland could be time-consuming and complex. A skilled attorney who has extensive experience in this area of the law may put you in the best position to succeed.
Arbitrary and Capricious Standards in Disability Cases
In some ERISA governed long-term disability policies, the insurance company may add a “discretional clause” which allows the insurance company to freely interpret the provisions of its policy. During a trial, the court may determine entitlement to benefits under an arbitrary and capricious standard of review.
Under this standard of review, the plaintiff may be required to prove that they are disabled, that the insurance carrier acted “arbitrary and capricious” in denying the claim. Under these circumstances, it may not take much for a court to determine whether an insurance company thoroughly reviewed the claim.
Key Timelines for ERISA Claims
Applications for long-term disability benefits may be decided quickly on initial application. The regulations issued by the Department of Labor for ERISA claims require the insurance company to make a final decision within 45 days of receiving the completed application. If the insurance company requires more time, it must notify the applicant in writing, and the insurance company may take up to two 30-day extensions.
If an applicant’s claim is denied, an administrative appeal may be filed, which may take six months or more. The claimant has 180 days to file the appeal and could wait up to 45 days for the insurance company to make a decision, barring there are no extensions.
If the claimant’s administrative appeal is denied, the claimant could appeal the decision with the court, which may take up to two years for a response.
What are the Deadlines for Filing a Lawsuit?
The statute of limitations establishes a deadline for filing a lawsuit in an ERISA claim. If the plaintiff does not pursue legal action or fails to timely file, the court may dismiss the case.
For long-term disability claims covered by ERISA, the federal law governing many employer-purchased group policies, the statute of limitations may be complex. ERISA merely directs the claimant to the applicable state law but does not have a statute of limitations provision in it. Each state’s statute of limitations on a breach of contract case could also vary from state to state.
In Maryland, the statute of limitations on a breach of contract case is three years. When calculating the deadline, claimants may be confronted with the issue of when the “time limit” to file a lawsuit begin. Each policy may contain language that can assist in answering this question. In some cases, the policy may be silent on this front.
Consult with an ERISA Disability Lawyer in Maryland
When claimants are denied benefits, they may have a limited window of opportunity to submit an acdministrative appeal to the insurance company that denied the claim. If this is not done, the claimant may lose the right to filing an ERISA disability lawsuit in Maryland.
If you are looking to learn more about your legal rights under ERISA, it is highly advisable to contact a skilled attorney who concentrates on ERISA law. To find out more, call today.
