What Is an ERISA Insurance Claim and How to File It?

Navigating the complex world of employee benefits and workplace protection can be daunting. One critical aspect that often comes into play is the Employee Retirement Income Security Act (ERISA) and its claims. A beneficiary who lost a loved one may still be going through a grieving process and may not have the strength to review complex life insurance policies and perform a thorough investigation in order to submit a comprehensive appeal brief. Further, an appeal based on the same documents is likely to be denied.

In this blog post, our ERISA attorneys have prepared a guide to help you better understand what an ERISA claim process entails, how to file an ERISA appeal and what to do if your life insurance ERISA claim is denied.

What Is ERISA and How Does It Work?

ERISA stands for Employee Retirement Income Security Act of 1974 and is a federal law that governs claims for benefits from an employee or group welfare benefit plan. An employee welfare benefit plan is any plan, fund, or program established or maintained by an employer or an organization providing employee benefits such as life, health, or disability. If your right to benefits was through a plan established by a private sector employer or an employee organization (e.g., a labor union), it is most likely governed by ERISA.

The purpose of ERISA is to require plans to provide participants with accurate plan information about plan features, outline fiduciary responsibilities for the plan administrator and managers, establish a complaint and appeals process for participants whose benefits have been denied, and give participants the right to sue for denied benefits and breaches of fiduciary duty.

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What Plans are Covered by ERISA?

In most cases, when the employer buys life insurance for its employees, it is provided through an insurance company. If there is a plan and the plan was “established or maintained” by a private sector employer (or employee organization), it is probably covered by ERISA.

There are two exceptions to ERISA coverage:

  • Plans sponsored by churches and church-related entities are not covered by ERISA unless an election is made to have ERISA coverage.
  • Plans established or maintained by government entities for their employees, or plans which are maintained solely to comply with workers’ compensation, unemployment, or disability laws are not covered by ERISA.

How Do I Know if My Benefit Plan Is Controlled By ERISA?

If your employer is engaged in any of the following activities, a Court will likely find that the employer “established or maintained” the Plan, mandating ERISA coverage.

  • The employer is paying all or even part of the policy premiums;
  • The employer is urging employees to join the plan;
  • The employer is retaining some of the deducted premium to administer the plan;
  • The employer is keeping track of who is in the plan;
  • The employer is answering questions for the plan members about their coverage.

Understanding ERISA Claims Procedures

ERISA claim appeals are filed when someone believes their rights under an ERISA-covered plan have been violated, ranging from the denial of benefits to mismanagement of funds or misrepresentation of plan provisions. It is important to note that ERISA claims are distinct from other types of claims, such as personal injury or employment discrimination claims, as they specifically pertain to employee benefit plans governed by ERISA.

Before an ERISA life insurance claim is filed, it is important to check your Summary Plan Description and Summary of Benefits and Coverage to ensure the beneficiary is eligible to receive benefits. Plans usually provide specific definitions for eligibility. For example, in some cases, a dependent can only be insured up to a certain age and stops being considered a dependent if his/her status changes. In other cases, only full-time employees who are actively at work are eligible for coverage.

How to File an ERISA Claim?

The Summary Plan Description provided by the plan must have information on where to send your completed claim forms, what additional documents to include, and the plan’s contact information.

Understanding its key steps is essential to navigating the ERISA claim process effectively. The process typically unfolds as follows:

  1. Filing the Claim: The claim process commences by submitting a written claim for benefits to the plan administrator. The administrator is obligated to provide a timely response, usually within 90 days, explaining the decision to approve or deny the claim.
  2. Internal Appeals: ERISA mandates that the insurer has the right to an internal ERISA appeal process in case of a claim denial. This involves submitting a written appeal, often accompanied by additional evidence or documentation supporting the claim. The plan administrator then reassesses the claim and decides on the appeal.
  3. External Remedies: The beneficiary may pursue external remedies if the internal appeals process fails to yield a satisfactory resolution. This includes filing a lawsuit in federal court. If your life insurance claim is controlled by ERISA and it has been denied, you can only file a lawsuit after your administrative appeal is denied. Read more about how to deal with ERISA litigations. It is important to note that there is a statute of limitations for filing ERISA lawsuits, so it is important to act quickly if you believe your rights have been violated.

If you want to make sure you file the claim and do it correctly within the required time frame, our ERISA lawyers can help. Call (888) 510-2212 for a free case evaluation.

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What if Your ERISA Claim Is Denied?

If your life insurance ERISA claim is denied, the insurance company must send you a denial letter in writing. According to ERISA regulations, the denial letter must include the following information:

  • The reasons why your claim was denied;
  • The specific provisions in the insurance plan on which the denial is based;
  • What documents and the insurance company review in deciding your claim; 
  • What additional information do you need to include in your appeal for the insurance company to reconsider your original claim;
  • How to correctly submit an appeal;
  • The deadline to file an appeal; 
  • A description of your rights as an ERISA beneficiary to file a lawsuit to recover the proceeds.

If your insurance provider denies your ERISA claim, you have the right to file an ERISA appeal.

One of the reasons it is best to have legal help when faced with an ERISA denial is a strict appeal deadline. Under ERISA, an adverse benefit determination (a denial) must be appealed administratively before a lawsuit can be filed. For most plans, the appeal deadline is 60 or 180 days from the denial letter date. It means that a beneficiary whose claim has been wrongfully denied has only 60 (or 180) days to investigate the denial, draft an appeal, prepare supporting documents, and submit the appeal before the deadline. Unfortunately, an appeal prepared without a legal brief is rarely winning.

Another important factor to consider when dealing with an ERISA life insurance claim denial is providing an insurer with all legal arguments and documents the beneficiary plans to include in the lawsuit. A poorly submitted ERISA appeal may restrict the beneficiary from bringing up new issues or documents during litigation.

Depending on the circumstances of your claim, insurance companies set different times to review the appeal. You might minimize the waiting time if you work with an experienced ERISA attorney.

What Happens if Your Appeal Is Denied?

If your appeal is denied, you have the right to bring an ERISA lawsuit. Like with appeals, filing an ERISA lawsuit differs from other litigation types. For example, it is typically handled in federal court unless both parties agree to keep the case in state court jurisdiction; jury trials are unavailable, and submitting new evidence might not be permitted. You can read more about the particulars of such cases in our blog post about ERISA litigation.

An experienced and knowledgeable ERISA lawyer will help you navigate the complex nature of this law to recover the life insurance payout you are rightfully entitled to.  If you or someone you know has issues with a denied ERISA claim, call us at (888) 510-2212 for a free consultation. We have the experience you need to win your case.

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About the author

Attorney Tatiana Kadetskaya has over 10 years of experience in life insurance law representing beneficiaries and policy owners. She is best known for successfully collecting denied and delayed claims and settling complex beneficiary disputes and interpleader lawsuits.

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