We talk quite a bit about the Employee Retirement Income Security Act (ERISA), which was passed back in 1974. If you have your workplace benefits denied, ERISA can make the appeal process a difficult and frustrating battle, which is why you need an ERISA claim lawyer.
However, not all employee plans are subject to ERISA regulations. Some types of plans and employers are exempt from these federal regulations. Knowing if you’re on an ERISA or non-ERISA plan can help you understand your options if your benefits get denied.
Let’s explore what kinds of plans are not governed by ERISA. We’ll also discuss how non-ERISA claims differ from ERISA claims during the appeals process and how our team can help. If your benefits have been denied and you need to speak with a lawyer, contact our Birmingham law firm today. You can also call us at (877) 249-0091.
Sinclair Law Firm handles ERISA and non-ERISA claims, so rest assured that we can help you.
What Types of Plans Are Typically Not Governed by ERISA?
As a general rule, ERISA does apply to exempt employers and exempt plans.
- Exempt employers include government employers and religious employers. For government employers, their plans tend to be subject to other federal laws or state laws. For religious employers, federal ERISA laws do not apply, which is one way that the church and state are kept separate.
- Exempt plans include any plans that you do not have through your employer. This applies to any insurance you paid for yourself out of your own pocket (i.e., not through payroll deductions) as well as plans subject to other laws, such as workers’ comp and certain kinds of disability coverage.
How to Check If Your Plan Is Governed by ERISA
If you are unsure if your plan is governed by ERISA, we encourage you to check with your employer or your plan administrator. They should be able to provide you with that information as well as any other details you may be curious about.
The Following Plans Are Not Subject to ERISA Regulations
Let’s be more specific now about exempt plans and exempt employers. The following plans are not governed by ERISA.
Workers’ Compensation Benefits
Your workers’ compensation benefits are subject to Alabama state laws rather than ERISA. As such, you have a much different appeal process if your workers’ comp claim gets denied.
Unemployment
The Alabama Department of Labor is in charge of unemployment benefits. This safety net is not governed by ERISA.
Social Security Disability Benefits
Social Security Disability Insurance (SSDI) is not governed by ERISA. However, any workplace disability coverage that is governed by ERISA could affect your eligibility for SSDI and vice versa. Our law firm can assist with these kinds of issues should they arise.
Government Employee Plans
If you are a federal, state, or local government employee, your plans are generally not governed by ERISA. This covers Alabama municipal workers as well as educators at state universities and public schools.
Church/Religious Employee Plans
If you work for a church or other religious institution, your plans are likely not governed by ERISA. Always check with your employers or plan administrator, just in case.
Small Insurance Plans
Some small insurance plans with fewer than 100 participants may not be governed by ERISA, though it may depend on how the plan is funded and other factors.
Plans of Indian Tribal Governments
If you are on an employee welfare plan that’s been established or maintained by an Indian Tribal Government and you perform essential government functions, your plan might not be governed by ERISA.
Insurance Plans Outside of the U.S.
Any employee plans for the benefit of non-resident aliens that are maintained outside of the United States are typically not governed by ERISA.
Unfunded Excess Benefit Plans
These non-qualified deferred compensation (NQDC) plans that provide retirement benefits are not subject to ERISA requirements or regulations.
Why Non-ERISA Plans Matter
Say that you have a non-ERISA claim that is denied. Because your plan is not governed by ERISA, you can file a bad faith insurance claim to seek the benefits you were due. As part of the lawsuit, you can also seek additional damages and possibly even punitive damages. If these cases go to trial, you get to have your case heard by a jury of your peers, who may be more sympathetic to your story.
Now, if your plan is governed by ERISA, you cannot file a bad faith insurance claim. There is an entirely different procedures you need to follow.
- First, you need to meet a tight deadline to file an ERISA appeal, and then you need to exhaust your administrative appeal options.
- If your appeal is denied, you can then take your case before a federal judge. There will be no jury involved, and the legal standard to overrule a denial is much more difficult than bad faith cases that involve non-ERISA claims.
- The most frustrating thing, however, is that if you win this federal hearing, you only get your benefits that were initially denied. ERISA prohibits you from seeking additional compensation and punitive damages.
Reading through this, it should be clear why there’s a major difference whether your plan is governed by ERISA.
What Should I Do If a Non-ERISA Claim Is Denied?
If your non-ERISA benefits are wrongly denied, you need to speak with an attorney as soon as possible. You may be able to file a bad faith insurance claim and receive your benefits in addition to other damages.
Time is of the essence, especially if you were counting on receiving those benefits. The team at Sinclair Law Firm is ready to help. Contact our Alabama law office online for a free claim review. You can also reach us in Birmingham by phone at (877) 249-0091.
What Types of Plans Are Governed by ERISA?
Most private sector employee benefits are governed by ERISA. This includes pensions, retirement benefits, deferred compensation plans, and any employee welfare benefits, such as disability and life insurance.
If you are not a government employee and do not work for a church or religious institution, chances are your employee plans are governed by ERISA. Again, if you’re unsure, check with your employer or plan administrator.
What If I Have a Plan Governed by ERISA and It Is Denied?
As we alluded to earlier while discussing why non-ERISA plans matter, ERISA makes the appeals process much more complicated. You cannot file a bad faith insurance claim when a plan is governed by ERISA. There is a much different set of hoops you now need to jump through.
This is sadly ironic since ERISA was originally passed to help employees have more bargaining power and protect benefits. In the decades since 1974, companies have learned how to use the language of ERISA against employees.
Remember: ERISA isn’t used in and of itself to deny your claim. Instead, insurance companies deny claims to avoid making payouts and then use ERISA to make it much more difficult to appeal and obtain the employee benefits you’ve worked for.
Challenges Appealing a Denied ERISA Claim
You have a short window of time to get everything in order to appeal a denied ERISA claim.
You typically have just 180 days to appeal the denial of employee welfare benefits, such as life and disability insurance; you usually have just 60 days to appeal the denial of pension and retirement benefits. If you miss those deadlines, you can no longer seek your benefits.
When preparing your appeal for internal review, you need to have a strong case that demonstrates the strengths of your claim while addressing what was mentioned in your denial letter. Here’s where having an ERISA lawyer is helpful. Your attorney will treat your appeal as a legal foundation if your appeal is denied and needs to go before a federal judge.
Challenges When a Denied ERISA Appeal Is Reviewed by a Federal Judge
If your ERISA claim is denied and goes before a judge, you aren’t able to admit new evidence for the judge to review. Again, there is no jury to hear this out.
We mentioned earlier that there’s a difficult legal standard to overturn a denied claim. This is known as “abuse of discretion.” Your appeal must demonstrate that the insurance company’s decision to deny your claim was arbitrary, capricious, or unreasonable. Even with a strong claim, the judge may not overrule the insurance company’s decision if abuse of discretion is not shown.
In other words, you may have a great point and the judge may believe you should receive benefits, but the insurance company may still prevail if you can’t prove that their initial decision was unreasonable.
That’s why an experienced ERISA lawyer will work diligently during the appeal process. At Sinclair Law Firm, we know how important this is, and we’ll put our efforts into crafting an appeal backed by evidence and designed to demonstrate the insurer’s abuse of discretion.
Here’s Another Way to Think About “ERISA”
Based on what you’ve read, you’re probably baffled by the nature of ERISA and all the hurdles it creates for working people just trying to get their workplace benefits. This sentiment is common with our clients and with our team.
Judge William Acker, Jr. was appointed to the United States District Court for the Northern District of Alabama during the 1980s. While ruling on a case in 1993, Judge Acker cited another acronym for ERISA: “Everything Ridiculous Imagined Since Adam.”
How Sinclair Law Firm Can Help with Non-ERISA and ERISA Claims
We know you’re frustrated. You worked hard for these benefits and you played by the rules. Now you’re told you cannot receive what you’ve worked for. This is painful for pensions and retirement benefits, and it can similarly be a burden on a household to be denied disability benefits or life insurance.
At Sinclair Law Firm, we’re committed to helping Alabamians in need. We see how the system is stacked against working people of all incomes, so we work to level the playing field and hold insurers accountable. Count on us for a helping hand during a difficult and confusing time.
What Sets Sinclair Law Firm Apart
There’s a reason workers all over Alabama know they can rely on us, whether they’re a high-earning executive who needs disability or a blue-collar worker experiencing the challenges of ERISA claims.
- We Know How Insurance Companies Operate: Tom Sinclair started his legal career representing auto companies and insurance companies. He learned his true calling was helping people who’ve been let down by the system. Our law office can use this firsthand knowledge of insurance company tactics to your advantage.
- We Have Access to Trusted Experts: Insurance companies have access to experts, and so do we. We can consult our medical experts to help support your case while building your claim.
- Insurance Companies Know Our Reputation: We know for a fact that some insurance companies flag files when they see the Sinclair Law Firm is on the case. This pleases us immensely. It means we have a great reputation for taking on insurance companies and doing right by our clients.
- We Offer Free Claim Reviews: If you were denied benefits, you might be strapped for cash and trying to figure out how to stretch your savings for the time being. That’s why we offer free claim evaluations. You can share your story with a lawyer you can trust, get guidance on what options you have, and not have to worry about a bill.
- We Will Work with Your Financial Situation: Each person who comes to our law firm faces a different financial reality. When you work with us, we can figure out a payment structure that makes sense given your current means and circumstances.
Contact Our Law Firm for Help with ERISA and Non-ERISA Claims
Whatever issues you’ve experienced related to your workplace benefits, you can count on Sinclair Law Firm for help. Our legal team has helped many Alabamians with their ERISA and non-ERISA claims. We’re here to provide answers, insight, and guidance so you can enjoy the benefits you worked hard for.
To schedule a free claim review, contact our Birmingham law firm today. You can also set up a case evaluation by phone at (877) 249-0091.