Authority and Disability Insurance Companies

Disability insurance companies are not the ultimate authority on whether or not a claimant is entitled to received benefits.  Some people may feel like they do not have a valid claim for disability benefits simply because the insurance company denied their original application or their appeal.


The insurance company is not the final authority on your right to benefits

It’s a fact that the insurance company does get to decide whether or not to pay your initial benefits.  They also have the decision during any appeals whether or not you will get paid.  However, this is known as the administrative process.  Just because the administrative process ends and you receive a final denial doesn’t mean it’s over.


What happens after a disability insurance final denial?

Remember how we told you that the insurance company is not the ruling authority on your benefits?  This is clear from evidenced the denial letters.  The ERISA statute that governs most disability insurance claims (employer-provided policies for non-church & non-government plans) require an insurance company set forth your appeal rights you have in your denial letter, and a final denial letter must advise you of your right to bring a legal action against the insurance company after the administrative process is concluded.


So who is the ultimate authority on disability insurance cases?

The ultimate authority on ERISA benefits is the court system, the judge or panel of judges deciding your case.  This is the reason ERISA disability insurance lawyers exist – both to help you during the administrative process, and to help you in court should you need to file a lawsuit against the insurance company.


Mediation is a required step in the litigation process.

It should be noted that alternative dispute resolution is a required step in the litigation process in an ERISA disability insurance claim.  This is almost always in the form of mediation, which involves the parties meeting with a mediator, whose job is to see whether the case can be settled between the parties without further litigation.  Mediation often results in a lump-sum offer to settle your case.  At the mediation phase, once the insurance company has made a final decision regarding how much money they are willing to offer, the ultimate authority on your case at this point is YOU!


Cases that go beyond mediation.

If an ERISA disability insurance case goes beyond mediation, it is generally settled on briefs – meaning the lawyers for each side write arguments to the judge or panel of judges, using only the evidence generated during the administrative process before the case was filed, and the judge reads the briefs and either rules for the Plaintiff – you – or for the Defendant – the insurance company.  The disappointed party generally appeals to the next higher court, and the process repeats itself.  The is usually a new mediation, with a new chance for settlement, and if the case doesn’t settle, a new series of briefs.  Cases on appeal are generally heard by a panel of judges instead of a single judge.


So what does all this mean?

Just because a disability insurance company has denied you benefits doesn’t mean you aren’t disabled.  It doesn’t even necessarily mean you aren’t entitled to benefits.  Seeking the advice and assistance of an ERISA disability attorney may be the most logical step if you receive a denial letter from an insurance company rather than merely accepting a disability insurer as the final authority on your case.