Three Important Things To Understand About ERISA Long Term Disability

The Employee Retirement Income Security Act, or ERISA, is a protection act that allows you to receive long-term payments in the event you become disabled and are unable to work. For many people, the claims process is complicated, but they quickly discover that even after their claim has been approved, understanding how payments work can be just as difficult.

Taxes Might Be Involved

There is a fairly widespread belief that long-term disability benefits are void of the requirement of paying taxes. The reality is that all long-term payments are taxed, but whether or not you are required to pay them on your own is the only the difference. Whether or not you are required to pay taxes on your disability benefit payments has everything to do with the type of policy you are under.

For example, employer group polices typically are paid to you with pre-taxed funds. In this case, you are required to pay the taxes on your own. However, if you are being paid your benefits from a disability plan you purchased on your own, your payments will likely be taxed before you receive them, relinquishing your responsibility to pay.

You Aren't Paid 100%

A hard pill to swallow when it comes to long-term ERISA payments is the idea that you won't be paid 100% of your salary. Some people are under the impression that simply because they are approved to receive full disability coverage, this also means that they will receive their full salary. However, this is not the case.

Similar to whether or not you pay taxes on your disability payments, the type of disability plan you are receiving your payments through will have a lot to do with how much of your previous salary you receive. The average you receive from your salary is typically somewhere between 50% and 80%. It's also important to understand that some polices offer a particular payment amount that is irrespective of your previous salary.

Understanding Your ERISA Payments

Unfortunately, long-term disability payments come along with many more confusing nuisances than those previously mentioned. If you're already dealing with a life-altering disability, the last thing you need to do is to spend your efforts trying to wrap your head around your ERISA payments. An attorney can assist you in this area. An attorney won't just assist you with the processing of your claim, but also ensure that you understand the structure of your claim.

Make sure you have an attorney like one from Iler and Iler on your side to ensure you understand your long-term payment structure.   

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Fascinating Legal Problems

There’s a reason why there are so many legal procedural shows on television these days. The law can be an intriguing thing. Going to court isn’t usually something that you look forward to, but having the court system available is definitely a positive thing. You never know when you may need to use it for one reason or another. I’ve found, as a legal professor, that taking a look at interesting cases in different areas of the law is the best way to help my students understand their subject. I’m hoping this blog will give you an idea of how the court system can work for you by giving you at glimpse at some fascinating cases and the laws behind them.