Disability Insurance Claims: How the Type of Policy Can Make a Big Difference

If your disability insurance claim has been denied or your benefits have been cut off, one of the most important questions is what kind of policy you have. In California, disability claims generally fall into two categories: claims under an employee-sponsored group disability plan, which are usually governed by a federal law called ERISA, and claims under an individual disability insurance policy, which are governed by California state law. The difference between these two types of claims can dramatically affect your rights, your chances of success, and the power an insurance company has over your case.

Certain states, like California, have laws that provide important protections, which can level the playing field—especially in certain ERISA cases—but these protections only apply if your claim is handled correctly from the start.

Group Disability Plans Governed by ERISA

Most disability benefits provided through private employers are part of a group disability plan governed by the Employee Retirement Income Security Act of 1974, commonly known as ERISA. ERISA establishes strict rules for how claims must be handled and how disputes are resolved. Although ERISA was intended to protect employees, it often makes it more difficult to win disability claims.

Under ERISA, disability disputes are decided by a federal district court judge instead of a jury. The court’s review is typically limited to what is called the “administrative record.” The administrative record is the complete paper file that the insurance company created while deciding the claim, including all the evidence the claimant submitted and the documents the insurer generated and relied on to deny or terminate benefits. In an ERISA disability case, the administrative record is the only evidence the court typically sees, which is why it’s so important to submit all supporting evidence during the claim and appeal process.

This means that if important medical records, doctor’s opinions, or vocational evidence are not provided at the appropriate time, they may never be considered later. ERISA also restricts what a claimant can recover. Even if the insurance company acts unreasonably, ERISA generally only allows recovery of unpaid benefits and possibly attorney’s fees, not compensation for emotional distress or bad-faith conduct.

How California Law Levels the Playing Field in ERISA Disability Claims

For many years, ERISA claims were even more difficult because disability policies often gave insurance companies “discretionary authority” to decide whether someone qualified for benefits. When this language was included in a policy, courts were required to give deference to the insurer’s decision, making it far easier for insurance companies to deny claims.

California changed that with the enactment of Insurance Code § 10110.6, effective January 1, 2012. This section of the code makes discretionary authority clauses illegal in disability and life insurance policies issued or renewed in California. When this law applies, courts must review the claim de novo, meaning the court examines the evidence independently without giving deference to the insurance company’s decision.

This protection can be a game-changer for employees in California, or any other state that has a ban on discretionary authority. Without discretionary authority, insurers must justify their decisions based on the evidence rather than relying on judicial deference. Federal courts in California have repeatedly enforced this law in ERISA cases involving California-issued policies. See, e.g., Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, 856 F.3d 686 (9th Cir. 2017).

However, not every ERISA claim automatically benefits from §10110.6. Whether the law applies depends on where the policy was issued or renewed and how the plan is structured. Identifying and asserting this protection early can make a decisive difference.

Individual Disability Insurance Policies Under California State Law

Individual disability insurance policies are governed entirely by state law and provide even stronger protections for policyholders. These policies are purchased directly by the insured and are not subject to ERISA’s restrictions.

In California, courts interpret insurance policies under well-established rules that require ambiguous terms to be interpreted in favor of coverage. Courts generally interpret the coverage clauses of insurance policies broadly, protecting the objectively reasonable expectations of the insured (See AIU Ins. Co. v. Superior Court, 51 Cal. 3d 807) Policyholders typically have the right to a jury trial and full discovery, allowing them to uncover how the insurance company actually handled the claim.

Most importantly, California law recognizes that insurers owe their policyholders a duty of good faith and fair dealing. When an insurance company unreasonably delays, denies, or terminates disability benefits, it may be held liable for insurance bad faith. This can include recovery of emotional distress damages and, in appropriate cases, punitive damages. (See Gruenberg v. Aetna Ins. Co., 9 Cal. 3d 566 (1973).

Why This Distinction Matters for California Claimants

Whether your claim is governed by ERISA or state law affects nearly every aspect of your case, including how evidence must be submitted, how the court reviews the insurer’s decision, whether you have a jury, and what damages may be available. Even within ERISA, states like California have enacted bans on discretionary authority under Insurance Code §10110.6, which can significantly improve the insured’s chances—if it is properly applied.

Insurance companies understand these rules and design their claims processes to protect themselves. Claimants who do not understand which laws apply often lose rights without realizing it.

A Strong Advocate for California Disability Claimants

At the Law Offices of Kevin M. Zietz, PC, we focus on representing disabled individuals in complex disability insurance claims, including ERISA-governed group plans and individual disability policies governed by California law. We understand how insurance companies operate, how ERISA limits claimants’ rights, and how California laws—such as Insurance Code §10110.6—can be used to level the playing field.

If your disability claim has been denied, delayed, or terminated, do not assume the insurance company got it right. The steps you take now can determine whether you ever receive the benefits you paid for.

Contact the Law Offices of Kevin M. Zietz, PC today for a consultation. We can review your policy, explain which laws apply to your claim, and help you take informed action to protect your rights and pursue the disability benefits you deserve.

When an insurance company denies a claim for long-term disability (LTD) benefits under an employer-sponsored group plan, the appeal process is often the claimant’s most critical—and sometimes only—opportunity to secure benefits. These plans are usually governed by the Employee Retirement Income Security Act of 1974 (ERISA), a federal law with strict procedural rules that heavily favor insurers.

A key element of a successful ERISA disability appeal is the involvement of the claimant’s treating doctors. At the Law Offices of Kevin M. Zietz, PC, we often encounter valid claims being denied due to inadequate development or presentation of medical evidence during the appeal.

Why Treating Physicians Matter in ERISA Disability Cases

Treating physicians are uniquely positioned to support a disability claim because they:

• Have an ongoing treatment relationship with the patient
• Observe symptoms over time, including flare-ups and variability
• Understand how medical conditions affect daily and occupational functioning
• Can explain why a claimant cannot reliably sustain full-time work

Although ERISA does not require insurers to automatically defer to treating physicians, courts often evaluate whether insurance companies fairly considered treating doctors’ opinions—especially when those opinions are consistent, well-reasoned, and supported by the medical record.

Medical Records Alone Are Often Not Enough

Many disability claims get denied even when the insurance company agrees with the diagnosis. Insurers frequently claim that: “The medical records do not support functional impairment.” This is because medical records focus on documenting treatment, not assessing work ability. Treating doctors are essential in providing medical opinions that clarify how a condition affects the claimant’s capacity to perform job duties, such as:

• Sitting, standing, walking, or lifting

• Concentrating or maintaining pace
• Managing pain, fatigue, or cognitive symptoms
• Maintaining reliable attendance and productivity

Without this type of functional analysis, insurers frequently conclude that a claimant can still perform “sedentary” or “light” work.

Addressing the Insurance Company’s Reasons for Denial

A strong ERISA appeal must directly respond to the insurance company’s stated reasons for denying benefits. Treating physicians can help rebut common insurer arguments, including:

• Alleged lack of “objective” medical evidence
• Claims that symptoms are subjective
• Assertions that treatment is conservative
• Reliance on the fact that a condition is “stable”

A treating doctor can explain, for example, why certain conditions do not produce definitive objective findings, why conservative treatment is medically appropriate, or why stability does not equate to an ability to work full-time.

Functional Capacity Is the Core Issue in ERISA Claims

Under ERISA, disability determinations focus on functional capacity, not simply diagnosis. Treating physicians can provide critical insight into:

• Physical limitations (e.g., sitting, standing, lifting, fine motor use)
• Cognitive or psychological impairments (e.g., focus, memory, stress tolerance)
• The need for unscheduled breaks, reduced hours, or absences
• The impact of symptom variability over a normal workweek

These opinions are particularly persuasive when they are tied directly to the demands of the claimant’s own occupation—or, where applicable, any occupation.

Countering Insurance Company Reviewing Doctors

Insurance companies frequently rely on doctors who:

• Conduct only paper reviews of the file
• Never examine the claimant
• Perform brief independent medical examinations

Treating physicians can counter these opinions by identifying inaccuracies, explaining why short evaluations fail to capture real-world limitations, and reinforcing conclusions based on sustained clinical observation. Courts often question denials that rely heavily on non-examining reviewers while discounting treating providers without a reasonable basis.

Timing Is Critical Under ERISA

ERISA disability claims are governed by strict procedural rules. In most cases, new evidence cannot be submitted after the administrative appeal is denied. This makes it essential that treating physician opinions, clarifications, and rebuttals be obtained and submitted during the appeal stage.

Failing to include this evidence during the appeal can significantly limit a claimant’s ability to challenge the denial later in court.

Helping Treating Doctors Provide Effective Support

Treating physicians are medical professionals—not ERISA specialists. Effective appeals often involve guiding doctors by providing:

• The insurance company’s denial letter
• The policy’s definition of disability
• A description of the claimant’s job duties
• Focused questions about functional limitations

Doctors do not need to offer legal conclusions. Their role is to clearly explain medical facts and work-related limitations in a way that directly addresses the insurer’s stated concerns.

How an Experienced ERISA Disability Attorney Can Help

Coordinating treating physician evidence in an ERISA appeal requires legal and medical strategy.  At the Law Offices of Kevin M. Zietz, PC, we work closely with clients and their treating providers to ensure that:

• Medical opinions address the correct legal standard
• Insurer arguments are directly rebutted
• The administrative record is fully developed before the appeal deadline

If your long-term disability claim has been denied, experienced legal representation can make a meaningful difference.

Have your long-term disability benefits been denied?

Contact the Law Offices of Kevin M. Zietz, PC , to discuss your ERISA disability appeal. We focus on representing individuals whose disability claims have been wrongfully denied by insurance companies and on building strong appeals supported by evidence from treating physicians.

Disclaimer

This blog post is for informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. Every disability claim is unique, and outcomes depend on the specific facts and policy language involved. If you have questions about your claim, you should consult with a qualified ERISA disability attorney like Kevin M. Zietz.

When someone becomes unable to work due to injury or illness and goes out on disability, there may be sources of income replacement available through the State that you live in and/or the federal government. Only a handful of states have a State Disability Insurance Program, and the Social Security Administration provides federally funded programs to assist disabled workers.

State Disability Insurance Program (SDI)

Five states (California, Hawaii, New Jersey, New York, Rhode Island) and Puerto Rico, have State Disability Insurance (SDI) programs. These programs are designed to partially replace wages for workers who are very ill, injured off the job, and unable to work. If someone is disabled for less than one year, a state disability program may be the only source of disability benefits through a government entity.

In California, the Employment Development Department (EDD) provides short-term wage replacement benefits to eligible workers who have a loss of wages when they are unable to work due to a non-work-related illness, injury, or pregnancy.

The EDD will pay SDI for as long as you remain disabled, up to a maximum of 52 weeks.

Social Security Disability Income (SSDI)

Social Security Disability Insurance (SSDI) is a federal program administered by the Social Security Administration. This program will pay benefits to a disabled person and certain family members if they are “insured,” meaning they have worked long enough, and recently enough, and paid Social Security taxes on their earnings.

In order to satisfy the definition of disability under the Social Security Administration’s rules, the person claiming to be disabled must have a medical condition that makes it such that you cannot do the work that you did before because of a medical condition, and you cannot adjust to other work because of your medical condition. Furthermore, the disability must last or be expected to last for at least one year or to result in death.

A person’s financial status is not a factor in determining whether they qualify for SSDI. In other words, if a person satisfies all of Social Security’s criteria to receive SSDI benefits, the fact that they are financially secure does not play a factor in determining whether they are eligible for benefits.

Supplemental Security Income (SSI)

The Supplemental Security Income (SSI) program is also administered through the Social Security Administration. The SSI program provides monthly payments to adults and children with a disability or blindness, and who have income and resources below specified amounts. A person may be able to receive SSI if their resources have a value that is $2,000 or less. A couple may be able to receive SSI if they have resources worth $3,000 or less.

SSI payments can also be made to people 65 and older without disabilities who meet the financial requirements for these benefits.

The bottom line is that to qualify for SSDI, you must meet the Social Security Administration’s criteria for disability. Whether you qualify for SSI depends on your income and resources. A person does not necessarily need to be disabled to receive SSI.

The Long-Term Disability Carrier Wants Me to Apply for Social Security Disability – Am I Required to Apply for Social Security Disability?

If you are currently receiving Long-Term Disability (LTD) benefits under a group sponsored by your employer, or if you are dealing with a claim that has been denied, the claim administrator (usually an insurance company funding the plan) has probably informed you that you are required to apply for Social Security Disability Income (SSDI). It is important that you review the insurance policy, specifically the “offset provisions” that describe what other sources of income the disability insurance company is entitled to subtract from your monthly LTD benefit.

What is an offset?

An offset is money that you are receiving from another source (i.e., State Disability, Workers’ Compensation Benefits, SSDI, a retirement benefit, etc.) that the policy subtracts from your monthly LTD benefit. The policy will identify all sources that it is entitled to offset from your monthly LTD benefit. SSDI is a common offset that you will see in disability insurance policies insuring a group disability plan.

Why Am I Required to Apply for Social Security?

If you are potentially entitled to receive an award of SSDI, the LTD policy will probably require that you actively pursue this benefit. If you chose not to apply for Social Security, and you have been approved for LTD benefits, the policy’s offset provision will typically entitle the claim administrator to estimate your monthly SSDI benefit and offset it from your LTD benefit. In other words, if you are receiving LTD benefits and you decide not to pursue SSDI, the LTD carrier may be permitted (pursuant to the terms of the policy) to subtract money from your monthly LTD benefit that you are not actually receiving (but were potentially entitled to receive). Therefore, it is generally not a good idea to forego applying for SSDI if the LTD policy requires that you apply for it.

One reason that you may want to delay the application for Social Security is that you do not have sufficient medical evidence to support your claim. You should consult an experienced Social Security lawyer about when it is proper to apply for SSDI.

What Happens if I Have Been Receiving LTD Benefits for Months or Years and

Then I Receive a Retroactive Award of SSDI.

If your LTD claim is approved before your SSDI claim has been approved, or before you apply for SSDI, the claim administrator on the LTD claim will decide how to handle the offset issue. If you provide the claim administrator on the LTD claim with proof that your SSDI claim is pending, they will generally pay the monthly LTD benefit without offsetting an estimated SSDI benefit. However, as indicated above, if you do not apply for SSDI, the claim administrator will ultimately be entitled to estimate your SSDI benefit and deduct it from your monthly LTD benefit.

If you have been receiving a monthly LTD benefit without offset, and then you receive a retroactive award of SSDI, it will create an overpayment situation. In other words, you will owe some or all the retroactive award from the Social Security Administration back to the claim administrator on the LTD claim. The reason that you owe the LTD claim administrator money back is because you were overpaid in each month that you have already received an LTD benefit and now have been paid SSDI retroactively. If you have been receiving LTD benefits for several months, or maybe years, without SSDI being offset, and now you have been awarded SSDI, it will be important for you to contact the claim administrator on the LTD claim after you receive your benefits from Social Security. If there has been an overpayment, you will owe some or all the retroactively awarded money received from Social Security back to the claim administrator on the LTD claim.

Can Being Approved for SSDI Help My LTD Claim?

If your SSDI claim has been approved, the claim administrator on the LTD claim will not be bound by the decision made by the Social Security Administration. Likewise, if your LTD claim has been denied on appeal and you sue the LTD carrier and LTD plan in federal court, the court will not be bound by the decision made by the Social Security Administration. Nevertheless, the decision by the Social Security Administration may be offered as persuasive evidence in support of your LTD claim at the administrative appeal stage (when the claim administrator is reviewing your appeal). Even if your appeal is ultimately denied, and you sue in federal court, you will want the Social Security Administration’s decision to approve your SSDI claim to be a part of the LTD claim administrator’s file (the administrative record) so that it can be referenced by the court in that case.

If you have been denied by the claim administrator on the LTD claim at a point where the “own occupation” definition of disability is applicable, the SSDI award could carry significant weight because the Social Security Administration uses a more stringent “any gainful occupation” standard as part of its criteria it uses for awarding disability benefits.

What If I Have Been Denied Social Security Disability Income Benefits?

On average, the Social Security Administration denies nearly 60 percent of first-time SSDI applications. If you have been denied, it does not necessarily mean that you are ineligible. It is an indication you need to provide the Social Security Administration with additional information to allow that agency to properly reevaluate your application. You should consult with an experienced Social Security lawyer who can assist with your request for reconsideration.

Why Was I Denied Social Security Disability Income?

If you have been denied SSDI benefits by the Social Security Administration, it could be for any one of several reasons. The reason for being denied could range from any of the following:

• You did not work enough quarters;
• Your condition was not deemed severe enough to prohibit you from working at your occupation;
• Your condition does not meet or equal one of the Social Security’s severe impairment listings;
• You are able to perform the important duties of another occupation, given your age, education, and job skills;
• You have an outstanding warrant for your arrest for certain felony crimes, you were convicted of a crime and will go to jail, or you violated your probation or parole.

You should consult with an experienced Social Security lawyer to review the reason(s) that your application for SSDI was denied. An attorney can assist you in filing an appeal and represent you on your request for reconsideration. You must request an appeal in writing within 60 days of the Social Security’s decision, so it is imperative that you consult with a Social Security attorney as soon as possible.

If you have any questions regarding your claim for LTD benefits, and/or how an award of SSDI benefits may affect your claim, call Law Offices of Kevin M. Zietz for a free consultation.

If your long-term disability claim is governed by the Employee Retirement Income Security Act (ERISA), you are required to pursue an administrative appeal before you can file a lawsuit against the disability insurance carrier and the long-term disability plan. After your appeal rights have been exhausted, the next step would be to file a lawsuit in federal district court against the insurance company and the long-term disability plan. The law that developed since the enactment of ERISA in 1974 established that a denial of benefits challenged under ERISA’S civil enforcement provision must be reviewed under a de novo standard unless the benefit plan expressly gives the plan administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the plan’s terms. If the plan documents expressly give the plan administrator or fiduciary discretionary authority, the court is required to review your claim using a deferential standard of review.

If you have long-term disability coverage that was obtained through a group plan at work, and depending on which jurisdiction you reside, chances are that the policy grants discretionary authority to the insurance company. This simply means that a federal court reviewing the decision must give deference to the insurance company’s decision applying what is called an “arbitrary and capricious” standard of review. However, many states (i.e., California, Connecticut, Hawaii, Idaho, Illinois, Indiana, Kentucky, Maine, Maryland, New Jersey, New York, South Dakota, and Texas) have outlawed discretionary authority clauses found in group long-term disability plans.

Under the abuse-of-discretion standard, is it more difficult for a claimant to prevail in court? If the claim is subject to a de novo review, “The court simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits.” (Abatie v. Alta Health & Life Ins. Co. (9th Cir. 2006) 458 F.3d 955, 983.). California enacted Insurance Code §10110.6 effective January 1, 2012, which outlawed discretionary clauses in life, health, and disability plans.

Even if a group disability plan has an effective date before January 1, 2012, the policy insuring the plan will become subject to Insurance Code §10110.6 after renewal on the policy’s annual anniversary date after January 1, 2012.

When the Court utilizes a de novo standard of review, the Court evaluates whether the Plaintiff is disabled within the terms of the plan, and after evaluating the persuasiveness of conflicting evidence, decides which is more likely to be true. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999) (en banc); Muniz v. Amec Const. Management, Inc., 623 F.3d 1290, 1295-96 (9th Cir. 2010).

Under a de novo standard of review, it is the Plaintiff’s burden to prove their disability by a preponderance of evidence. Muniz v. Amec Constr. Mgmt., 623 F.3d 1290, 1294 (9th Cir. 2010). This means it is the Plaintiff’s responsibility to produce evidence demonstrating that the plan administrator incorrectly denied benefits. The evidence must establish that the claimant satisfies the definition of disability in the policy. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006). Essentially, it is the court’s duty to determine whether or not the evidence supports disability.

If you are dealing with a disability claim that has been denied by an insurance company, contact the Law Offices of Kevin M. Zietz for a free consultation.

If Long-Term Disability (LTD) coverage is offered through an employer-sponsored program available at your place of employment, most group LTD plans will contain a “pre-existing condition” exclusion. These types of policies are not underwritten for each of the individuals in the group, so pre-existing condition exclusions are designed to prevent the insurance company that funds the group LTD plan from insuring someone who immediately presents a claim as soon as their coverage takes effect. The insurance company does not look at the medical history of every member in the group before insuring them, so the company does not know what the risk is of providing each individual with insurance coverage. Insurance companies want to avoid paying out claims to people who obtain employment with the sole purpose of securing LTD coverage so they can immediately make a claim.

Have you made a claim for LTD benefits within the first 12 months after you became insured under your employer’s group disability plan?

The pre-existing condition exclusion will apply if you make a claim for LTD benefits within the first twelve months after you become covered under the plan. While this time period could vary, typically it is the one-year period after the effective date of coverage. If you submit a claim for benefits within this one-year time frame, that will trigger a “pre-existing condition investigation” by the insurance company.

What is a Pre-Existing Condition Investigation?

The insurance company will review all the medical information provided in support of your LTD claim after receiving an application for benefits. If the medical records demonstrate that you consulted with a doctor, had treatment, were prescribed medication, and/or had diagnostic testing, for symptoms related to your disabling medical condition (physical or mental) during the specified time before your LTD insurance went into effect, the insurance can deny your claim based on the pre-existing condition exclusion.

The purpose of a “pre-existing condition investigation” is to evaluate your health just before you’re the effective date of your LTD coverage. This will involve a request for all medical records for the relevant time period. The time period will vary depending on the policy (so be sure to check the specific policy wording in your policy), but it is usually for the period 90 days prior to the effective date of your coverage. For example, if your coverage became effective on January 1, 2023, the insurance company will look back at the window between October 3, 2022, and December 31, 2022. This period of time is what is typically referred to as the “look back window.”

Determining Whether a Condition Will Be Excluded as “Pre-Existing” is Not Always Clear.

In 2019 and 2020, we represented an individual who had a long psychiatric history that included evaluation and treatment related to attention-deficit/hyperactivity disorder (ADHD), generalized anxiety disorder, and insomnia. He in fact saw a psychiatrist related to these conditions during the 90-day look-back window so the insurance company denied his LTD claim on the basis that his claim was excluded by the pre-existing condition provision in the applicable policy.

During the administrative appeal process, we provided the insurance company with medical documentation establishing that the current LTD claim being pursued was based upon impairment(s) caused by major depressive disorder and agoraphobia. We convinced the insurance company that while our client did have a significant psychiatric history, he did not consult with a mental health professional or seek any treatment or evaluation for major depressive disorder and/or agoraphobia during the 90-day look-back window. The insurance company reversed the decision to deny the claim based upon the application of the pre-existing condition exclusion and paid the claim.

If you are dealing with a denial of LTD benefits because the insurance company determined that a pre-existing condition clause in the group LTD policy excludes your claim, please contact attorney Kevin M. Zietz for a free consultation.