Long-term disability denials follow a rigid federal process. The administrative appeal is often the last real chance to build the record that a federal court will see. Here is what to know.
ERISA Is Not Ordinary Insurance Law
Most people who buy a long-term disability policy through their employer have no idea what ERISA is. They find out, usually for the first time, when a claim is denied and they start looking for a lawyer. ERISA, the Employee Retirement Income Security Act of 1974, is a federal statute that governs almost all employer-sponsored benefit plans, including long-term disability insurance. It is different from ordinary insurance law in ways that consistently favor the insurance carrier.
This article walks through how the federal disability appeal process works under ERISA, what the deadlines are, and why the administrative appeal is usually the most important stage of the entire dispute.
The Initial Denial
The process typically starts with a denial letter from the insurance carrier. The letter will explain why the claim was denied, cite specific provisions of the policy, and reference the medical and vocational evidence the carrier considered. The letter is required by federal regulation to include specific information, including the right to appeal and the deadline for doing so.
Common reasons for denial include:
- The carrier's medical reviewer concluded that the claimant was capable of performing the duties of his or her own occupation or any occupation
- Lack of "objective evidence" of disability, particularly for conditions like fibromyalgia, chronic fatigue syndrome, or chronic pain
- Surveillance footage or social media activity that allegedly contradicts claimed limitations
- Failure to attend an independent medical examination
- Application of mental health limitations, which cap benefits at two years in most policies
- Disputes about the date of disability and whether the policy was in effect at that time
The 180-Day Window
After a denial, the claimant has 180 days to file an administrative appeal. This window is governed by federal regulation at 29 C.F.R. § 2560.503-1. The deadline is firm. Missing it generally means losing the right to challenge the denial in any forum, including federal court.
What goes in during those 180 days matters more than most claimants realize. ERISA litigation is usually limited to the administrative record. If the case ends up in federal court, the judge looks at the record that existed when the carrier made its final decision and asks whether the decision was arbitrary and capricious or, in cases with de novo review, simply wrong. New evidence added later, including new medical records, new physician opinions, and new vocational evaluations, is usually not admissible.
What Goes Into a Strong Appeal
An ERISA disability appeal is not a letter. It is a substantial submission designed to build the administrative record for potential litigation. A well-prepared appeal usually includes:
Comprehensive Medical Records
Every relevant medical record from every treating provider, including office notes, diagnostic test results, imaging studies, hospital records, and prescription histories. Records the carrier did not have when it issued the denial should be obtained and submitted.
Treating Physician Statements
Statements from treating physicians that address the specific definition of disability in the policy. Policies typically use one of two definitions during different phases of disability. "Own occupation" disability is defined as the inability to perform the material duties of the claimant's regular occupation. "Any occupation" disability requires the inability to perform any occupation for which the claimant is reasonably qualified by education, training, and experience. The treating physician's opinion has to engage with the specific definition that applies.
Vocational Evidence
In "any occupation" cases, vocational expert reports are often necessary. A vocational expert analyzes the claimant's transferable skills, the labor market for available occupations, and whether any reasonably available position would accommodate the claimant's restrictions. The firm's ERISA disability practice page describes this kind of evidence and how it is developed.
Functional Capacity Evaluations
A formal functional capacity evaluation, performed by a qualified evaluator, can provide objective evidence of physical limitations. This is particularly important when the carrier has argued that the medical evidence is "subjective."
Responses to the Carrier's Reviews
Most denials rely on a "peer review" or "independent medical review" that the carrier commissioned. These reports are usually written by physicians who never examined the claimant, working from a partial medical record. The appeal should address each error and omission in the review, with citations to the underlying records.
What Happens After the Appeal Is Filed
The carrier has 45 days to respond to the appeal, with the possibility of a 45-day extension for "special circumstances." If the appeal is granted, benefits are reinstated and any back benefits are paid. If the appeal is denied, the claimant has exhausted the administrative remedies and can file suit in federal district court.
Federal Court Litigation Under ERISA
ERISA actions are filed in federal district court without a jury. The court reviews the administrative record under one of two standards. If the policy grants the administrator discretionary authority to interpret the plan and determine benefits, the court applies an arbitrary and capricious standard, which is deferential to the carrier. If the policy does not grant such discretion, the court applies de novo review and decides the question of disability on its own.
If the court finds for the claimant, the remedies typically include reinstatement of benefits, payment of back benefits, prejudgment interest, and, in many cases, attorney fees. ERISA's fee-shifting provision is discretionary, and courts apply a multifactor test to decide whether to award fees.
The United States Department of Labor enforces parts of ERISA and provides public resources on disability claims and appeals. Information is available on the agency's official website, including consumer guides and the relevant regulations.
Frequently Asked Questions
Do I have to file an administrative appeal before going to court?
Can I add new evidence after the administrative appeal is filed?
What is the difference between own occupation and any occupation disability?
Are mental health disability claims treated differently?
Conclusion
ERISA disability claims look like insurance disputes from the outside. They are not. They are federal administrative proceedings with rules designed to favor the carrier, and they punish claimants who treat them like ordinary insurance matters. The administrative appeal, often viewed as a formality, is in fact the most important stage of the dispute.
If your long-term disability claim has been denied, the firm welcomes a conversation about the policy, the denial letter, and what the appeal should include. Return to the homepage for an overview of the firm's other practice areas, or reach out directly through the contact page.