ERISA is The Employee Retirement Income Security Act of 1974. ERISA sets up minimum standards for such welfare benefit plans as life insurance, disability insurance, retirement, and health. The ERISA protections only apply to non-government employers that offer employer-sponsored life insurance coverage to employees. If your claim has been denied, the first question to ask is whether the insurance policy was a privately purchased individual insurance policy. If it was, ERISA laws will not apply.
ERISA regulates the conduct of insurance companies. Generally, it places a fiduciary duty upon insurers and employers as plan administrators. Under ERISA, plan administrators are required to perform their duties to the highest degree of responsibility. ERISA regulates reporting and accountability, disclosures, procedural safeguards and financial interests of plan participants. For example, an insurer must provide such disclosures as the plan summary which shows what benefits the plan offers, the plan’s limitations, and guidelines for obtaining benefits such as filing a claim, appealing an adverse decision and filing a lawsuit.
If a life insurance claim is denied, ERISA mandates that a written appeal is filed before the beneficiary can file a lawsuit in court. The administrative appeal is usually reviewed by an independent examiner who had not worked on the initial claim determination. Since there is only one chance to appeal a denial of a life insurance claim and strict deadlines apply, it is critical to retain an ERISA attorney to help in this complex process. An ERISA life insurance lawyer will help you file a successful administrative appeal within the deadline. A life insurance attorney will know what facts to look for during the pre-appeal investigation. In addition, with the help of legal counsel experienced in ERISA appeals, your appeal may include may several claims, new evidence and a comprehensive explanation of your legal position. Only an attorney can research ERISA cases all across the country and in the insured’s circuit and cite them in the appeal. A do-it-yourself appeal is not advisable due to lack of legal research and case law citations.
What Should I do if my ERISA Life Insurance Claim Been Denied?
If your claim has been denied, you need to know that you have legal rights and restriction. ERISA not only gives plan participants a lot of rights, but it also places a lot of limitations on filing a lawsuit. Thus, as a beneficiary of an ERISA plan, you may:
- File a lawsuit in federal court if the appeal is denied;
- Appeal the denial of benefits;
- Sue an insurance company for breach of fiduciary duty;
- Present new evidence during appeal;
At the same time, a policyholder may not:
- Sue an insurance company for breach of contract or bad faith
- Admit new evidence in a trial against the insurance company (if it was not introduced during appeal);
- Have a jury trial;
- Be entitled to conduct any pre-trial discovery.
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