Few things are as frustrating, and even frightening, as losing expected health, life, accidental death, long-term disability, or retirement benefits. Our firm has experience handling these disputes.

Health Insurance and Employment Benefits

Health insurance and other employment benefits play an important role in our lives. Too often health insurers or third-party administrators refuse to pay valid claims. Sometimes, plan administrators refuse to pay for claims after authorizing the patient to undergo expensive procedures. The plans provide a variety of reasons for refusing to pay claims: the procedure was experimental, the patient had a pre-existing condition, the patient failed to satisfy an initial ineligibility period, the claim was not timely, and so forth. In some rare cases, health plans offer no valid reason for denying the claim. Other times, insurers will only pay a portion of the billed charges, claiming that the medical provider’s charges exceeded the “usual and customary” rates of other medical providers. Sometimes, self-insured employers simply fail to set aside enough money to pay the employee health claims.

Many of us have seen the Hollywood portrayal of the health insurance company that continuously refuses to pay the valid claim for its insured patient, eventually sending a letter stating that he “must be stupid, stupid, stupid.” Unfortunately, through experience, we have learned that this scenario may not be too far from the truth. Plan administrators routinely deny valid claims, playing the odds that most patients will not have the will or resources to fight them.

One of the chief reasons plan administrators are willing to play this game is that most claims against health insurers are governed by the Employee Retirement Income Security Act of 1974 (ERISA). Originally enacted to ensure the viability and security of employee pensions, ERISA also governs all claims for employee benefits (with some exceptions). Because over 70% of all health insurance policies are employer-sponsored, ERISA governs most claims.

Watch: What Is ERISA?

ERISA, Employee Retirement Income Security Act of 1974

ERISA is a complicated statute. A federal ERISA lawsuit against a health insurer does not operate as would a typical lawsuit against an automobile insurer. ERISA does not allow for punitive damages. The plaintiff typically has no right to a jury. There are strict administrative requirements that must be satisfied before filing suit. Because of these complications, health, disability, and life insurers are willing to bet that few will contest wrongfully denied claims. Plus, the worst that can happen is that the insurer will only have to pay the value of the claim–exactly what it was supposed to do in the beginning.

This does not mean that you should give up. It is possible to force your health, life, accidental death, or disability insurer to pay your valid claims. Plus, although not allowing for punitive damages, ERISA does provide that a prevailing plaintiff may be awarded his or her attorney’s fees.

If your insurer or pension plan has wrongfully denied your claim, do not wait. We recommend that you involve an attorney as early in the process as possible. The chances of making the plan reverse course are much greater during the internal appeal process. Often, simply involving a knowledgeable attorney will cause the health insurer to re-evaluate its position.

Furthermore, failing to present a thorough internal appeal can hurt your case if you are forced to sue later. Some make the mistake of holding back important information, erroneously believing that it is wise to bring out the best facts in the lawsuit. The internal appeal is the quickest and best chance to achieve success. If you are forced to sue, your well-drafted appeal will serve as the basis for your arguments before the court. We have successfully obtained benefits and avoided lawsuits for a number of clients by simply drafting well-crafted appeals.

Likewise, ERISA does not govern all health plan claims. Privately-procured or government-sponsored health plans usually are not covered by ERISA. Claims under these types of plans are prosecuted differently than ERISA claims.

Aside from employer-sponsored health insurance, ERISA also governs other employer-sponsored benefits such as retirement benefits, life insurance, accidental death and dismemberment, and long-term disability insurance. These claims are also often wrongfully denied. The procedure to recover on these policies is very similar to health insurance claims.

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