The Employee Retirement Income Security Act of 1974 – ERISA
Don’t Handle Your ERISA Claim Without Help!
Does ERISA apply?
If the benefits in question were connected to your employment, the answer is probably yes. However, if the employer was a government or church, then ERISA may not apply. Although this seems straightforward, this question can be incredibly complex.
One of our cases involved several months of litigation surrounding the question of whether a church was a church. There is some division of whether “religious entities” are considered churches and quasi-governmental entities can lead to lengthy preliminary disputes as well. The insurance company will do everything it can to get ERISA to apply if there is even a slim chance it will work.
What Terms Apply?
If ERISA does apply, finding out what the terms of the insurance policy are can prove quite difficult. ERISA benefits often involve interpreting several documents, including global wrap plan documents, summary plan descriptions, and insurance policies or certificates of coverage. These will often have different, conflicting terms, and it is not always easy to know which the court will find to be controlling.
The other big problem here is that employers will rarely send you all the documents you need and have requested. It is also often quite difficult to know who to request these documents from in the first place. Further, many of the benefits under an employee welfare benefit plan or pension plan will be interconnected. So, if you have an ERISA disability benefit claim, you will need the ERISA life insurance policy as well because the ERISA life insurance policy premiums for that life insurance policy should be waived and coverage continued while you are disabled.
ERISA is Exhausting
Exhaustion of administrative remedies is also very important under ERISA. If your ERISA benefits require you to go through certain administrative remedies in order to dispute a claim denial, then you must exhaust those remedies before you can go to court. For example, in the case of an ERISA life insurance claim, the insurance policy may require you to appeal to the claims handler who denied your claim and ask them to reconsider that denial before you file a lawsuit. If you don’t go through that process, a court may later find that you failed to exhaust administrative remedies.
Your case will be dismissed by the court if exhaustion has not occurred. Although most claims will involve an initial decision and an appeal, some plans may allow additional administrative remedies that should be utilized before you can file suit. The plan can also specify the statute of limitations, so this whole process can easily cause disaster.
The ERISA benefit plan may also require sending each claim to a different entity, so it is important to know exactly what to do and what the deadlines are for each step. It is also important to know when the insurance company has missed a deadline, because you may be able to file suit and strip them of one of their biggest defenses to your claim; the arbitrary and capricious standard of review.
ERISA Appeals are Traps
During the appeal review phase, the insurance company will likely do everything it can to avoid a full investigation of your claim. Why? Because the more evidence it gathers the more likely the evidence would show you are entitled to your ERISA benefits. Essentially, the insurance companies avoid helping you prove your ERISA claim which is why they only request a couple of months’ worth of doctors notes for a disability claim arising from a lifetime illness.
Insurance Company Doctors – “Denial Docs” – Never Saw A Claim They Would Approve
Another tactic we often see is that the insurance company will often pay so-called impartial paper reviewers or, even worse, have its own in-house physicians (employees of the insurance company) to dispute your own physicians’ findings and provide the insurance company evidence that you are capable of work. This is particularly problematic if you appealed an ERISA claim denial without an attorney and exhausted administrative remedies, because the record in court will likely be limited to whatever evidence the insurance company had at the time of its final decision.
Clients or their prior attorneys rarely understand how important this appeal phase is, and some actually rely on the insurer to obtain medical records, talk to their doctors, and actually help them with their ERISA claim. Anyone who has dealt with an insurance company knows how this will play out in most cases. ERISA claims are often won and lost in the “administrative” review phase, and this will often take a very considerable amount of work.