Why is it important to determine whether or not a disability policy is individually purchased or employer-provided?
If the disability policy is an individual policy, an extensive array of legal remedies is typically available to the insured under state law. Perhaps the most significant of these is the potential for punitive damages against an insurer who is shown to have acted in “bad faith” in denying benefits. Under ERISA, employer-provided disability policies are not subject to any remedies except those provided by ERISA. Specifically, they are not liable for punitive damages even when shown to have acted in “bad faith” in denying benefits. Obviously, this removes a significant motivating lever to compel carriers to respond to claims in good faith.
Related Questions
- How does a CHS Program determine if a client has established residency? Does the program rely on program policy or tribal policy when it comes to determining residency on a reservation?
- I am currently receiving SSA disability benefits due to a problem unrelated to my DOE work. How will you determine if I have a wage loss due to my accepted illness?
- Why is it important to determine whether or not a disability policy is individually purchased or employer-provided?
