New York law
Long-Term Disability & ERISA Laws in New York.
Most private long-term disability (LTD) insurance is employer-sponsored and governed by ERISA, which preempts state contract and bad-faith claims. ERISA claims must exhaust internal appeals and are reviewed under a deferential standard if the plan grants discretion. Individual (non-ERISA) policies are governed by New York contract law and may support consequential damages under Bi-Economy. New York provides statutory Short-Term Disability Insurance (Disability Benefits Law) for most private-sector employees — 50% of weekly wages up to $170/week for up to 26 weeks.
Last verified: 2026-04-17
State law
Key New York Statutes
ERISA preempts state-law breach of contract and bad-faith claims for employer-sponsored LTD plans.
For non-ERISA individual LTD policies, New York permits consequential damages beyond policy limits for insurer's breach of good faith — narrow standard requiring reasonable contemplation at contract formation.
De novo unless the plan grants discretion; then abuse-of-discretion applies.
Mandatory short-term disability benefits for most private-sector NY employees. Pays 50% of average weekly wage up to $170/week for up to 26 weeks. Paid Family Leave (separate) provides up to 12 weeks at 67% of wages up to annual cap.
State law
Official Sources
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This page summarizes publicly available statutes and rules for informational purposes only. It does not constitute legal advice, and no attorney-client relationship is created by viewing this content. Laws change — always verify with the primary source or consult a licensed attorney in New York.
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