Individual Disability

What Are The Differences Between An Individual Disability Policy And A Group Disability Policy?

Individual disability policies are governed by state law whereas group policies, with a few exceptions, are governed by federal law. Group disability insurance claim procedures are unique. If you’re denied a disability claim, you have to file an appeal with the insurance company that denied the claim. You have to complete their internal appeals process before you can sue in court and you have to meet all the deadlines. If you miss the deadline, it means you’ve failed to exhaust your administrative remedy, which can then prevent you from being able to sue the insurance company. Once you’ve exhausted the administrative remedies, you can bring suit in federal court. However, unlike an individual policy, you will not be entitled to a jury trial; you won’t be able to call witnesses and you won’t have a chance to testify.

The judge will not hear new evidence but will decide the case based on the information that was in the claims file at the time the claim was denied. It is the evidence that was in front of the insurance claims adjuster when the claim was denied that the judge will review. That is why it is vital to get in all the evidence to support your disability claim filed before the final appeal. The other difference is that most employer group disability policies have language that allows the insurance company the discretion to interpret the policy. When this happens, the judge reviews the claim based on an abuse of discretion standard and cannot overturn the insurance company’s decision unless it is not supported by evidence or clearly erroneous.

In Florida, there is a concept referred to as wrong but reasonable. The judge may say that the wrong decision was made by the insurance company but it was reasonable, and therefore they will uphold it. An individual disability claim is like any other insurance claim. Generally, if the insurance company denies your claim, then you can sue in state court. You don’t have to go through an internal review process and you can seek damages for breach of contract, bad faith, and other causes of action that you don’t get with a group policy. You can also have a jury trial, call witnesses, and testify in court. The standard of review in state court is de novo, meaning that new evidence can be presented. This is more favorable to claimants than the group policies standard.

Not all group policies are governed by ERISA. It is vital for your lawyer to know if the policy is individual or group and if it’s a group policy, if it is governed by ERISA. If the lawyer doesn’t know if it is an ERISA case or individual case, they could miss a deadline or file suit prematurely, and fail to exhaust the administrative remedy, which would cause your lawsuit to be dismissed.

What Governs Long-term Disability Benefits? Florida Law Or Federal Law?

An individual long-term disability policy is governed by state law while a group long-term disability policy is governed by federal law, unless it is a church plan or maintained by a governmental entity. Governmental entities such as a city, state, or township, and churches are exempt from the federal law.

What Are Some Coverage Issues That I Need To Understand?

It is important to understand the evidence of insurability that some policies require. The insurance carrier might require you to submit some proof of insurability before coverage is issued and at times, the employer may not have the employee complete that form to submit the evidence of insurability. This ends up with their coverage being void. Common coverage issues include exclusion of coverage due to preexisting conditions and limitations on coverage for mental health or self-reported conditions, such as fibromyalgia. Some policies terminate coverage upon termination of employment, while other policies may require payment for the long-term disability premium throughout the elimination period in order to be covered.

For more information on Individual & Group Disability Policies In FL, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (352) 577-7746 today.