All group policies are not subject to ERISA.

An example of a policy that would not be subject to ERISA would be a policy that you purchased from an insurance agent for yourself and that you pay the premiums.

An individual disability policy which was purchased for you by your employer and where the premiums are paid by your employer may be subject to ERISA.

If the policy is provided to you by your employer and the premiums are paid for by you or your employer it is most likely subject to ERISA.

Group disability policies that would not be subject to ERISA would be policies that cover:

1. All employees or members of churches, religious organizations (unless ERISA is chosen) in which an association is the group policyholder and you pay the premiums directly to the association or insurance company.
   
   
2. Employees of the United States, Texas and political subdivisions of the State of Texas e.g., hospital districts, appraisal districts, MHMR, etc.

There are other factors regarding this determination.  Please contact us at info@erisaltd.com

Our view of the more important provisions of a group insurance policy

1. Definition of disability - this provision will determine if you receive the disability benefit if you are unable to perform one of the material and substantial duties of your occupation or if you are unable to perform nearly all or all of the material and substantial duties of your occupation.  It will also determine when the definition of disability will change from “own occupation” to “any occupation”.
   
   
2. Own occupation/any occupation - you will receive the disability benefit because you are unable to perform your own occupation (for normally 24 months) after which time you receive a disability benefit only if you are unable to perform any gainful occupation, sometimes determined based on your training, education, experience and prior earnings.
   
   
3. The determination of occupation - do you receive a disability benefit because you are unable to perform your own occupation (typically for 24 months) often which time you receive a disability benefit only if you are unable to perform any gainful occupation, sometimes determined based on your training, experience and prior earnings.
   
   
4. The amount of the monthly benefit - you will receive 50, 60 or 66 2/3 % of your monthly earnings calculated in a particular way e.g., with or without bonuses, commissions, etc.
   
   
5. Offsets are other income that are subtracted from the monthly benefits - examples of offsets are: Social Security disability benefits (for the claimant or the full family), retirement disability benefits, worker’s compensation payments or injury settlement.
   
   
6. Limitations on the period of payment - some policies limit  payments to only 24 or 36 months for disabilities caused by mental and nervous disorders, alcohol or drug dependence, neuromusculoskeletal or soft tissue conditions, chronic fatigue, etc.
   
   
7. Elimination period is the period, measured from the date of disability, you must remain disabled prior to receiving your first monthly benefit.  This period could be 3 or 6 months during which you will not receive a disability benefit.
   
   
8. Pre-existing condition - if your disability starts in the first six months or as much as one year after the policy starts, you will not be entitled to benefits if you were treated for the condition causing the disability within three months, six months or one year before the policy started.

Our view of the most significant disadvantages of having a group disability insurance policy issued by your employer.

1. The insurance company makes the rules by which your claim is handled, and also is responsible to see that the ERISA rules are applied fairly.  There is virtually no punishment for the insurance company that does not apply the rules fairly.
   
   
2. The ERISA scheme provides an insurance company with a lot of protection that it would not have if the insurance policy was not governed by ERISA.  Without these other laws, which apply in the absence of ERISA, there is little incentive for the insurance company to apply the rules fairly.
   
   
3. When making a decision as to whether you are going to receive a benefit, the insurance company does not need to be correct, just reasonable in how it reaches its the decision.
   
   
4. If you are dissatisfied with the insurance company’s decision, you do not have a right to a trial before a jury of your peers, but rather a review by a federal judge.
   
   
5. The federal judge that will review the insurance company’s decision is limited in the scope of the review and limited to the issue of whether the insurance company was reasonable in how it reaches its the decision.
   
   
6. You can change the determination by the insurance company only by convincing a federal judge that the decision was arbitrary and capricious, a standard which gives the benefit of the doubt to the insurance company.