Your employer offered health, disability, retirement, life or COBRA insurance or other benefits and now the insurance company is trying to deny them. These benefits are supposed to be provided based on the plan's terms -- not the plan's financial situation or other factors. If the benefits were offered and you qualify for them, they should be paid out, right?
When an insurance company refuses a valid employee benefits claim, it may be in violation of the Employee Retirement Income Security Act, or ERISA. The law protects the interests of participants and beneficiaries of employee benefit plans. It requires plans to operate at high standards and in the interest of plan participants.
When a plan doesn't live up to specific standards required by ERISA, a private attorney and/or the U.S. Department of Labor's Employee Benefits Security Administration may step in to enforce the law. The IRS and the Pension Benefit Guaranty Corporation also have roles to play in ERISA enforcement.
What are common problems covered by ERISA?
Many, but not all, employee benefits are covered by ERISA. The Department of Labor defines the covered plans as "retirement plans" and "welfare benefit plans" such as health, disability, life and COBRA insurance plans. Certain common abuses are associated with different types of plans. For example:
In order to limit expensive benefits, health insurance plans sometimes define what is covered very strictly. Often enough, they use language that even attorneys have trouble following. This leads to cases where coverage is inappropriately denied for people with serious illnesses.
Because of the practical difficulties in proving them, disability claims are probably the most frequent ERISA claim. Not only does the beneficiary have to prove they have a serious health condition, but they must also demonstrate they cannot work due to that condition. Since the medical experiences of human beings vary, there may be others with the same condition who are still able to work. Questions about the validity of the condition and the claim of disability commonly lead to denied coverage -- and litigation.
Most people who lose their employee-sponsored health insurance are entitled to continue that coverage for a period of time by paying the full premium. This is called COBRA coverage. Failure to elect it by the deadline or to pay a premium can result in abrupt loss of coverage even when there were legitimate reasons.
Challenging an employer-sponsored insurance provider through ERISA is a complex process with strict deadlines. Unfortunately, the people involved are typically under a great deal of stress. If you believe your benefits claim has been improperly denied, we recommend contacting an employment law attorney who practices ERISA law.