Most individuals become familiar with the phrase 502(a) lawsuit by receiving a letter from an insurance company denying access to their long-term disability benefits.
The traditional language often used by long-term disability insurers advises clients that they have “exhausted their administrative remedies”, and now have the ability to file a lawsuit under Section 502(a) of the Employee Retirement Income Security Act, otherwise known as ERISA. The 502(a) lawsuit is one that often confuses clients because many individuals think that a lawsuit must end in a trial or hearing. In fact, the 502(a) lawsuit does not allow for a jury trial or even a hearing in a federal court where testimony is taken.
The traditional format for 502(a) cases, involves the Judge’s review of the “administrative record” to determine whether the insurance company’s behavior was arbitrary.
The 502(a) lawsuit usually ends with the attorneys filing Motions based upon the administrative record, which contains arguments in favor of, or against, the conclusion that an individual is disabled. The “administrative record” is a phrase that is used to represent all of the activity and data that was supplied by both the insurance company and the claimant during their appeal. It is based upon that information (and no other) that the court makes an informed decision as to whether the insurance company behaved arbitrarily (or disregarded the claimant’s evidence).
There are only a few ERISA 502 Litigation Attorneys & law firms that are equipped to move forward on a 502(a) lawsuit. In each state, you may only find a handful of attorneys or law firms that focus on this unique area of the law as a substantial part of their practice.
As I have said in previous blog posts, the most important feature in long-term disability prosecution is doing a very thorough and well-documented appeal. Not everyone has the luxury of finding a lawyer to help them do the appeal, so some people try to do the appeal on their own.
Although I do not discourage people from trying, I have seen far too many cases where people attempted to do their own appeal, or hired a neighborhood lawyer with no ERISA litigation experience, resulting in a terrible outcome.
If you have received a letter that says that your administrative remedies are exhausted and you are entitled to file a 502(a) lawsuit, you should have your case evaluated by an Attorney who will take the time to go through the administrative record and determine whether or not there is a reasonable argument to be made in favor of the reinstatement of your benefits.
Occasionally, Insurers will engage in settlement discussions or participate in mediation to resolve long-term disability cases after a 502(a) suit has been filed. Only by hiring a qualified and diligent lawyer who is familiar with ERISA, can you improve your chances of engaging in settlement dialogue with a long-term disability insurer.
At McDonald & McDonald, we successfully litigate, mediate, and settle long-term disability cases for our clients every day. We welcome your phone call and the opportunity to evaluate your case, regardless of whether we were involved in the previous administrative appeal.
If your administrative remedies have been exhausted & you need to file a 502(a) lawsuit, please contact us as soon as possible to discuss how we can help you.
Questions about your long term disability insurance claim?
Call (877)-428-9806 for a free consultation and we will be happy to answer your questions or concerns and talk about what we can do for you.