Before I can tell anyone how strong their long-term disability claim is, I need to answer a more basic question: where did the policy come from? Coverage you got through your job and coverage you bought on your own can look almost identical on paper. But they are usually governed by different laws, and that difference decides your deadlines, who hears your case, what evidence counts, and what you can recover if the insurance company treated you unfairly.
Two different sets of rules
Most disability coverage that comes through a private employer is part of an “employee welfare benefit plan” governed by ERISA, the Employee Retirement Income Security Act of 1974. ERISA is federal law. A policy you bought yourself from an insurance agent is usually not an ERISA plan. It is a contract governed by your state’s insurance and contract law.
Here is what that means in practice.
| Employer plan governed by ERISA | Private policy you bought | |
|---|---|---|
| Law that applies | Federal law (ERISA) | State insurance and contract law |
| Appeal before suing | Usually required; at least 180 days to appeal a disability denial | Set by the policy and state law; often not required |
| Who decides a lawsuit | A federal judge; generally no jury | A judge or jury, depending on state law |
| Evidence in court | Often limited to the insurer’s claim file | Usually the normal rules of evidence and discovery |
| How closely the court reviews the denial | Sometimes deferential, if the plan gives the insurer discretion | The court decides who is right under the contract |
| What you can recover | Benefits owed, plus possible interest and attorney’s fees; generally no punitive or emotional distress damages | Benefits owed, and in many states extra damages or penalties for bad faith |
The last row matters most. In Pilot Life Insurance Co. v. Dedeaux (1987), the Supreme Court held that ERISA preempts state-law bad faith claims over the handling of benefits under an ERISA plan. So if your employer plan wrongly denies you, you generally cannot sue under your state’s bad faith law the way you could with a private policy.
How to tell which one you have
Start with these questions:
- Did you get the coverage through your job, or a union? If yes, it is probably an ERISA plan, with the exceptions below.
- Who pays the premium? If your employer pays all or part of it, ERISA almost certainly applies.
- What does your plan booklet say? Employer plans must give you a summary plan description. If yours has a section titled something like “Your rights under ERISA,” that is a strong sign.
- Did you buy it from an agent, on your own, and pay the premium yourself? That is usually a private, individual policy.
Do not rely on the insurance company’s letters to tell you. Denial letters for ERISA plans usually mention your ERISA rights, but the label in a letter does not settle the question.
The gray areas
Some coverage that comes through work is still not governed by ERISA.
Government employers. ERISA does not apply to governmental plans. If you work for a federal, state, or local government, including public school districts and many public hospitals and universities, your LTD claim is likely governed by state law or other rules instead.
Church employers. Plans of churches and church-affiliated organizations are exempt unless the plan has elected to be covered. Some religiously affiliated hospitals and schools fall in this category. Whether a particular plan qualifies can be a close legal question.
Voluntary coverage you pay for at work. Federal regulations exclude some group insurance from ERISA when all four of these are true:
- the employer pays nothing toward it,
- employee participation is completely voluntary,
- the employer’s only role is letting the insurer publicize the coverage and collecting premiums through payroll deduction, without endorsing the program, and
- the employer receives nothing for it beyond reasonable pay for handling the payroll deductions.
If your employer contributes anything, or presents the coverage as part of its own benefits package, the exception may not apply. This is often disputed, and the answer can change the whole case.
Coverage you kept after leaving a job. Some people convert group coverage to an individual policy when they leave an employer. Whether ERISA still applies depends on the facts. Have a lawyer look at it.
Why private policies can be different in other ways too
Set the law aside for a moment and read the policy itself. Individual policies are written differently from group plans. Some define disability as the inability to do your own occupation for the entire benefit period, not just the first 24 months. Some pay partial benefits if you can work only part time. Group plans more often switch to an “any occupation” definition after two years and limit mental health claims to 24 months. Every policy is different, so the words of yours control. More: Own occupation vs. any occupation.
What to do with the answer
If your coverage is through an ERISA plan: treat the administrative appeal as your one real chance to build the record. Request your claim file and plan documents, find your deadline (at least 180 days for a disability denial), and answer every reason for the denial with evidence. More: Why ERISA favors insurance companies and Recently denied?
If you have a private policy: read the policy’s claim and appeal provisions and its deadline to sue, which may be shorter than you expect. Keep copies of everything you send and every letter you receive. If the insurance company has acted unreasonably, your state’s law may give you remedies that ERISA would not.
If you are not sure: that is normal, and it is one of the first things we sort out in a free consultation. Bring your policy or plan booklet, any denial letter, and your pay stubs showing any premium deduction.
Not sure whether ERISA governs your policy? Call 770-351-0801 or request a free case evaluation. We will tell you which rules apply and what they mean for your claim.
Related: Get your policy before you file · Can I sue in federal court? · Top 5 reasons LTD claims are denied