ERISA

What is ERISA?

T

his is like no other type of law you have heard of or dealt with. ERISA is an acronym for the Employee Retirement Income Security Act of 1974. A federal law, ERISA covers benefits such as insurance, retirement, health and more, provided by employers to employees. By design, it was meant to protect the employees, but it has become a law that protects the employer and insurance company. It is complex in nature and requires an attorney who regularly handles this type of law.

 

Due to its complexity, few plaintiff lawyers are well-versed in ERISA. In these cases, there is an escalated urgency during the time before a claims adjuster formulates a decision. For this reason alone, you should seek legal counsel at first indication your benefits will be terminated, or a claim denied.

 

ERISA overrides state bad faith and breach of contract laws and it drastically reduces an insured employee’s (or their beneficiaries’) rights to recovery, types of claims, and chances of winning. ERISA also may limit the evidence that can be considered by the court if it goes that far.

Knowledgeable and Experienced ERISA Attorneys 

An ERISA attorney’s main duty is to understand how this complex law impacts their client’s right to benefits, as well as how to stay in compliance with ERISA, how to navigate any related laws and regulations, and how to best use that knowledge to help potential clients with any ERISA benefit denials. Some of the ERISA related issues our law firm can assist our clients with include:

 

  • Disability Benefit Denials
  • Life Insurance Benefits
  • Pension Denial
  • 401(k) Claims
  • Health Insurance Benefit Claims

 

Sinclair Law Firm is here to help our clients with their ERISA claims. If you believe you have been denied a workplace benefit, contact us today! 877-249-0091

 

We thoroughly understand and know how to correctly interpret the Employee Retirement Income Security Act (ERISA), Department of Labor Regulations, as well as applicable laws that impact ERISA claims. Just as importantly the insurance companies know our firm and our commitment to getting our clients’ benefits.

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.

ERISA – Interpreted Differently Across The Country

Many times clients have come to us after they have been dealing with certain law firms who advertise they handle ERISA claims, and then later found out that the attorney rarely, if ever, actually litigated an ERISA claim in a courthouse.

 

To compound the problems even further is the fact that the various district courts across the country have different interpretations of the law itself. Thus, where your case is filed can often win or lose the case before you even get started. The Eleventh Circuit in general is a particularly difficult place to be an ERISA plaintiff.

ERISA Deadlines – The Administrative Appeal and The Statute of Limitations

 

ERISA is full of deadlines and those deadlines come very quickly after the first denial of your benefit. You will often find you have somewhere between 30 and 180 days to appeal back to the claims adjuster who just denied your claim and ask them to overturn their denial.

 

Then, if that final denial of your appeal is issued, the clock begins to run on your right to file a lawsuit in court. A statute of limitation is a clock that begins running at a certain time during the course of your claim and once that clock runs out you will not be allowed to file a lawsuit if you haven’t already done so. When that clock starts and stops clicking is no easy thing to calculate because ERISA has been subjected to a lot of different interpretations and ERISA doesn’t contain its own defined clock or statute of limitation.

 

Instead, courts will look to state law if a statute of limitation is not specified in the contract. If the contract provides a limitations period, things can be particularly counterintuitive because some courts have found that the limitations period begins running on the date of the claim, regardless of whether the claim was being paid or not.

 

Thus, an insurer could pay a claim for a year and a half, deny the claim and take six months or more to render its final appeal decision. If a two-year period is set out in the policy, the insurance company could argue you might have only months to file suit. This may sound like a lot, but it takes time to get the ERISA claim file from the insurer, the plan documents from the employer, and to decide who the proper defendants are.

ERISA Claims – How The Wrong Decision Can Win

Another pitfall of ERISA is how one-sided the law can be. The ERISA record limitations discussed above are bad enough, but insurers’ decisions are also typically granted deference under the arbitrary and capricious review standard. Thus, the court could find in the insurer’s favor even if they find the insurer made the wrong decision.

 

A judge could be required to allow the insurance company’s wrong decision to win if there is any reasonable basis the insurer can manufacture or point to. When it comes to defining what constitutes a “reasonable basis,” courts are all over the map with some appearing to suggest that any basis would be good enough. That would mean the insurance company’s in-house physician could be wrong about everything in his/her opinion, but if the claims adjuster who denied the claim relied upon that in-house physician opinion that may win the day in court.

 

Compounding all of these barriers is the limitation on damages. Past due benefits are all that can be sought. There are no future benefits or punitive damages or any other real skin in the game for the insurer here. It will just have to pay the claim it refused to pay and potentially interest. Insurance companies have no economic incentive to pay an ERISA claim.

The Courthouse – The Last Hope for ERISA

Knowing the benefit ERISA provides them, insurers are particularly bold when ERISA is involved, and most major insurers have developed a litigation strategy designed to be as recalcitrant and difficult as possible. When you file a lawsuit against them, they will attempt to bury your attorneys in work if you try to conduct any discovery once you get to court. This is meant to make it so the case will only be profitable to the lawyer if you take an early cut rate settlement that leaves a disabled client in an awful position.

ERISA Insurance Companies Will Take Advantage of Inexperience

The defense attorneys selected by the insurer will undoubtedly be very experienced in ERISA, and they will use that experience to distort the law and confuse the court. The common perception among attorneys and court staff is that ERISA automatically means the insurance company wins, and it takes a lot of work to counteract that. It is important your attorneys know what they are talking about. Even then, your attorneys are still faced with trying to win a case where the court is deferring to the insurer and the insurer likely claims it controls the entire body of evidence in the case.

 

Insurers will typically define the ERISA record as being whatever they choose to send your attorney, and this is essentially the same as an opponent saying you have to settle for whatever they proved. This is problematic for obvious reasons, and it will take an extended discovery battle to get anything. We have been told on more than one occasion by federal judges that there are two things judges hate: 1) discovery disputes and 2) ERISA. But you have to fight those battles to level the playing field.

At Sinclair Law Firm, our legal teams handle ERISA claims Nationwide.  For the better part of two decades, our legal teams have handled ERISA claims on behalf of individuals from across the nation.  We have also appeared in courthouses across the country serving our clients. Call today us for a Free Consultation! 877-249-0091. Let our extensive ERISA expertise benefit you.