HELPING OHIO WORKERS PROTECT RETIREMENT, LONG TERM DISABILITY & LIFE INSURANCE BENEFITS
Retirement and welfare benefits aren’t just perks of being employed. Chances are, they’re essential to you and your families’ financial security. At Tittle & Perlmuter, we fully appreciate that only 39% of American families have $1,000 in savings to cover unexpected costs and emergencies. Like most households, then, you probably rely on your employee benefits to pay for healthcare needs, sick days, child care expenses, emergency funds for the future, and more.
If your employer or plan holder has mismanaged, abused, or denied your benefits, or withheld information that negatively impacted your benefit plans, we understand how devastating it can be to your finances, stability and overall wellbeing.
The good news is that you may have rights and remedies under ERISA. The bad news is that the claims process can be complex, unfair, and the odds unjustly stacked against you.
Our experienced ERISA attorneys can help you successfully file a claim, fight for your rights and protect the benefits you’ve earned so they’re available when you need them the most.
For more information on Long Term Disability Benefits, visit https://disabilityappeals.org/
What is ERISA?
Congress gave retirement and welfare benefits special protection under the Employee Retirement Income Security Act of 1974; better known as ERISA. The Act has been amended multiple times since to accommodate new benefits and plans and ever-changing employment laws.
The Act, itself, assigns employees and plan beneficiaries a list of rights. It also holds plan managers and employers to a high standard of care and responsibility, requires accountability and transparency, and provides remedies for employees when their benefit plans are not properly managed.
While ERISA assigns several rights to employees and plan participants, it’s also administered by a special department of the U.S. Department of Labor called the Employee Benefits Security Administration, as well as the IRS, and the Pension Benefit Guaranty Corporation. That means that navigating the claims process involves multiple agencies, several layers of paperwork, and a wide variety of rules, regulations, and policies. It is possible to win your claim, but it takes patience and the right team on your side.
Caption:So it’s been determined that you need to go on long term disability. This is obviously a stressful time in your life and you probably have a lot of life changes going on. There is one piece of information that you have to observe in order to make sure that you are protecting your rights. Before you go on long term disability, before your last day of work, you need to send written correspondence to your point of contact about your long term disability benefits. Whether that’s a third-party administrator or the human resources person at your company, you can send an e-mail, fax, or a hand-delivered letter to them saying that you want to know how to continue or maintain all of your other employee benefit coverages during your long term disability. So, if you have long term disability through your employer, you probably have other employee benefits that you’re enrolled in. So those might be health insurance, life insurance, accidental death and dismemberment insurance coverage, those are all employee benefits you may or may not be able to continue those while you’re on long term disability and thereafter. Your employer or your plan administrator has an obligation to tell you how to do that but the only thing that triggers that obligation to tell you that information is that you make the ask- you have to ask how to keep or maintain those coverages while you are on long term disability. So, a lot of times if you don’t do so, at or immediately after the time that you’re leaving the company, you can lose those benefits forever. Sometimes there are time periods as short as 30 days after you no longer are actively working with the company when you’re on long term disability that you can lose those coverages. So it’s extremely important that before the time that you are going on long term disability, you send that written correspondence- email, or fax, in my mind is preferred because you can see that they’ve received it and that written correspondence says, “Can you let me know how I can keep or maintain all my employee benefit coverages?”.
What are Retirement and Welfare Benefits?
Retirement benefits are just as the name implies; plans and benefits established specifically to fund retirement.
ERISA recognizes and provides protection for the following retirement benefits:
- Pension plans
- Cash benefit plans
- Defined contribution plans
- Employee stock ownership plans
- Simplified Employee Pension plans (SEP’s), and
- Individual Retirement Accounts (IRA’s)
Welfare benefits cover a broader scope and include life, health, disability, and long-term care benefits, among others.
ERISA covers the following types of welfare benefits:
- Health, medical and hospital care
- Accident, disability, sickness, and death benefits
- Vacation benefits
- Unemployment benefits
- Holiday and severance pay
- Prepaid legal services and plans
- Day care services and expenses, and
- Apprenticeship, training, and continuing education benefits
This doesn’t mean that you’re entitled to all these benefits. What it does mean is that when your employer offers these benefits, they must be properly managed and follow ERISA’s rules and guidelines.
Types of Claims You Can File by Plan and Violation Type
If you feel that your benefits have been violated, you can file a claim to demand proper treatment. The process has two basic steps:
- First, you must file a claim through the ERISA administrative process.
- Then, only once you’ve exhausted that process can you file a lawsuit.
One key to success in filing your ERISA claim is identifying which specific rights were violated. This will help determine how you file your claim and what your possible remedies will be.
Defined Benefit Plans / Pension Plans
A defined benefit plan, typically known as a pension plan, is one where the plan pays you a monthly or yearly allotment and is calculated based on a fixed formula. Your length of employment and last compensation, or salary level, are usually key to the formula. This also includes lump sum and cash balance plans.
ERISA says that employers are not required to provide employees with defined benefit plans. However, if your employer does offer such a plan, it’s given the same weight as a contract, and your employer, therefore, must abide by its terms and policies. In other words, your employer can’t offer you a pension plan and then just decide one month that they don’t want to pay it or pay a different amount. They must stick to the stipulations of the plan.
If you believe that your pension benefits have been unpaid, miscalculated, or that other terms of your pension plan have been violated, it may constitute a breach of contract and you may have the option to file a claim challenging the breach and demanding a recalculation.
In these cases, it’s important to be able to prove that your plan was mismanaged and show where the miscalculation occurred. We’ll work closely with you to determine exactly where the miscalculation happened so your claim is accurate and convincing.
Defined Contribution Plans / 401(k)’s
Defined contribution plans are better known as 401(k) plans. A specific amount of money is contributed by your employer each pay period into your 401(k) accounts. Your account is managed by a trustee who is responsible for ensuring that your employers contribution to your plan is timely collected and held in trust. This is to guaranty that your employer doesn’t spend the funds that are supposed to be allocated to your defined contribution plan.
There are several reasons why you may file a claim for mismanagement of your 401(k):
- Failure to deposit contributions
- Risky investment options that benefit the employer more than the employee (for plans that allow participants to choose how their funds are invested from a menu of options), and
- Failure to disclose important information about an investment option
If you believe that your 401(k) mismanagement falls under one of these categories, you may be able to file a ‘joint and several liability’ claim. This means that the account trustee, your employer, and its officers can all be held responsible for the mismanagement of your plan, regardless of their level of involvement. The point is, they were responsible for your 401(k) plan and they failed in their duties. Now, you have recourse to collect the monies owed or recoup what you lost.
Cutting Accrued Benefits
ERISA has an anti-cutback rule which simply states that no amendment can be made to your defined benefit or contribution plans that will reduce or eliminate your accrued benefits. They can, however, reduce the contribution rate.
For example, if you’ve accumulated $35,000 in your 401(k) account, your employer can’t deduct from that account. You’ve earned those contributions and now they’re yours to keep.
However, if your current contribution rate is $25 per month, your employer does have the right to reduce it to $15 a month, for example. Prior to any rate reduction, you are entitled to a notice. If the reduction is significant, you’re entitled a notice of at least 45 days.
Employers and plan holders are skilled at finding loopholes in the anti-cutback rule. If your employer is attempting to reduce your accrued benefits, it’s important to speak with an experienced attorney about how to review the reduction and file an appropriate claim.
Interfering with Vested Rights
A vested right is simply a right that cannot be taken away. When it comes to your retirement and welfare benefits, you have many vested rights.
For example, once contributions are made to your pension plan or vacation days are accrued, they can’t be taken away. You have a vested right to those benefits.
Unfortunately, some employers may take devious actions to try and interfere with your vested rights. Companies have been known to lay people off, simply to avoid paying accruing pensions. Others have tried to avoid paying for vacation days by allotting excessive work, deadlines, or assignments, or denying vacation time altogether, even after you’ve accrued the right to take paid days off.
Any attempt by your employer to interfere with these vested rights may be unlawful and a violation of ERISA. You may be entitled to a claim to demand the vested rights owed to you.
Failure to Enroll Participants
This violation is very straight-forward but can have devastating effects.
If you’ve never been enrolled in an employee benefits plan, you can’t file a claim for interference or benefits due. Simply, if you’re not a plan member, you have no vested rights.
However, if you attempted to enroll in a pension or welfare benefit plan, or should have been able to enroll, and your employer failed to properly complete the enrollment process, or denied it altogether, they have still violated ERISA laws. Under these circumstances, your claim would be for ‘surcharge’ relief, meaning you can show that plan benefits would have been available to you had you been properly enrolled.
In these cases, we can help you to file a claim and demand monetary damages in the amount that you would have been entitled had your employer enrolled you properly. This takes some skill in calculating what you missed out on, which we can help you with every step of the way.
Wage and Hour Violations
ERISA is not directly responsible for overseeing wage and hour violations. That falls under the Fair Labor Standards Act.
However, if your regular or overtime wages haven’t been properly paid, then you probably have missing or unpaid contributions to your pension and 401(k) plans, as well as other accruing benefits such as vacation days or sick days.
Under ERISA, this is considered a failure to deposit contributions and you may file a claim to recoup the monies or benefits owed.
Violation of Notice Requirements
If your employer is going to make a legal amendment to a benefit plan, ERISA still requires that they provide proper notice, to include the following:
- The notice must be given to plan participants as well as alternate payees
- The notice must be timely, specific to the type of amendment being made
- The notice must include certain verbiage and information to clearly communicate the changes and their affect
If your employer made significant changes to your benefits, and you did not receive a timely notification, or no notification at all, they may have violated ERISA regulations.
It’s important to understand that this doesn’t apply to all amendments, only those that significantly affect your rate of future benefit accrual, or that eliminates or significantly reduces your early retirement benefits. A notice is not required, however, if the benefit reduction will be minor.
That said, it can be difficult to determine what ‘significant’ means. What’s insignificant to your employer may be a really big deal to you. This is one of the ways that the claims process can put you at an unfair disadvantage, making it even more important to seek legal counsel.
Egregious failures, on the other hand, trigger a very specific form of relief. Egregious means a blatant and extreme violation of the notice requirements. For example, if your benefits were completely eliminated and you received no notice at all, we might argue that the notice violation was egregious, entitling you to the benefits you would have received had the amendment never been made.
Breaches of Fiduciary Duty
Remember that your plan manager or administrator holds a position of trust and is held to a higher standard under ERISA. They have a fiduciary duty to manage your benefits with loyalty, prudent decision making, attention to detail, and with your best interest in mind, not your employers.
If a plan administrator mismanaged your account or violated their fiduciary duties, they can be held personally responsible for your losses. This includes:
- The poor selection or monitoring of accounts that led to a financial loss
- Offering an unwise selection of investment options
- Selecting higher-cost investments that benefit the plan administrator and not you, as the benefit plan holder
- Accruing costly administrative expenses to manage the plans (typical administrative costs should only be about 18% of the total fees), and
- Originating an investment that includes a prohibited transaction, such as the sale of property, goods, or services (in other words, your investment options can’t include real estate transactions or the sale of goods and services)
This is not an exhaustive list but should give you a good idea of what your plan administrator should and should not do. Overall, their job is to choose wise and well-researched investment options that provide you with the most benefit. Their loyalty is to you and you alone, not your employer or themselves.
If you believe that your plan administrator violated their fiduciary duties, you have the right to file a claim and make specific demands. As with all ERISA claims, proving that your plan manager violated their duties takes an expert eye for detail and a thorough knowledge of the law.
How Tittle & Perlmuter Can Help
There’s no doubt that ERISA can be beneficial, but the law is multilayered and the claims process overly complex.
If you’re concerned that your retirement and welfare benefits have been mismanaged, or if your rights have blatantly been violated, we know how scared and angry you are. After all, this is your livelihood we’re talking about. You need to find out exactly what your rights are under ERISA and what type of recourse may be available to you, so we can recoup your losses and fix what’s been wronged.
Time is of the essence, though, and some claims have a statute of limitations! Do not wait to speak with an attorney. Our expert staff will respond promptly to your call, take your concerns seriously, and explain everything to you in clear and concise terms so you understand exactly what’s going to happen next. We’ll handle the claims process as well as prepare for litigation if a lawsuit becomes necessary. Everything from filing the initial paperwork, to arguing your case and negotiating your losses will be handled by experts with your best interest in mind.