Employees in Chicago and all around Chicago frequently have long-term disability insurance coverage through an employer’s group insurance policies. Unlike individuals who buy individual disability insurance policies, the employees most often have no say in whether the employer changes insurance carriers, or the new terms governing the new coverage, enforced under ERISA § 502(a). It can often lead to pitfalls for existing employees, depending on how the employer negotiates the terms in the new insurance policy for existing employees, including those with existing conditions or disabilities.
Whenever your employer changes benefit plans or insurance companies, ask for a copy of the new coverage. If your employer gives you access to these through an online portal, download the new terms of coverage.
The most common pitfalls with employers changing coverage occur if you have an existing condition for which you have not yet claimed disability, or were out on disability leave when your employer changed insurers. This latter scenario arose in Miller v. Reliance Standard Life Insurance Co., No. 20-30240, 2021 WL 2221347 (5th Cir. June 2, 2021). There, Miller was on disability leave when his employer switched insurers. When he returned to work, and injured himself shortly thereafter, the new insurer, Reliance Standard, contended Miller’s coverage did not begin until the month of the new injury, and he had a pre-existing condition. Only after interpreting multiple policy definitions regarding active employment and being actively at work, an appellate court ruled in Miller’s favor, holding the policy was not intended to exclude claims like those of Miller, where he had been an employee of the employer for a long time and had continuous coverage.
Any time your employer changes insurers and you either think you may go out on disability leave due to an existing illness, or you recently had a leave and there is a new insurer, it makes sense to get some guidance. Often the pitfalls can be avoided. Consult an experienced long-term disability lawyer.