ERISA refers to the Employee Retirement Income Security Act, a federal law which was enacted in 1974. ERISA applies to “employee benefit plans” which includes “employee pension benefit plans” and “employee welfare plans.” An employee welfare plan means any program established by or through an employer or union for the purpose of providing (through an insurance company or by self-insurance) medical, sickness, accident, disability, life, or prepaid legal services. ERISA applies only to people working for private industry, not to government workers or churches (although there is dispute whether church-affiliated organizations, such as schools and hospitals, are covered by ERISA.)
At the urging of insurance companies and employers, the Courts have determined that persons provided insurance benefits directly or indirectly by their employers have the restricted legal rights which requires them to appeal their grievances directly with their insurer or plan and go through all steps of the appeals process before being able to seek legal redress in the Courts. Further the Courts have determined that the legal redress is generally limited to the appeal record and that persons who are successful in Court may only receive payment of their claim, interest and attorney fees. Therefore, an important element of risk to the insurance company is missing if your benefit is provided by or through your employer, specifically the Duty of Good Faith and Fair Dealing and the related damages (damages for emotional distress, consequential damages, and punitive damages). For that reason, an insurance company knows even if it is wrongly denies the ERISA claim, the most the court can force the insurance company to pay is the claim it should have paid in the first place.
For any person that has a dispute with any employee benefit plan (medical, sickness, accident, disability, life, or prepaid legal services), it is critical that they timely appeal their dispute and make the best record possible so that they have the proper record to file a lawsuit if their appeal is denied. Remember that benefit plans are familiar with the appeal process and know how to make the best record supporting their decisions to deny benefits and usually the employee or family member has the inexperience to properly handle their appeal to make the best record to support why they are entitled to benefits.
Contact Us for Legal Advice
Our goal is help you understand your ERISA rights and how best to appeal your claim denial. Unlike many law firms, we do handle lawsuits governed by ERISA (for example see Hertz v. Hartford Life & Accident Ins. Co., 991 F. Supp. 2d. 1121 (D. Nev. 2014)), provided the appeal record and the amount of the claim warrant it. The earlier in the process you contact us, the more we can help.
Contact Leverty & Associates Law Chtd., at (775) 624-5276 for a FREE CONSULTATION.