What is ERISA?

If you work for a private sector employer, your employer's benefit plans are governed by a federal law called the Employee Retirement Income Security Act of 1974, or “ERISA.” This law was put in place in order to protect employee pension and health and welfare benefits from misappropriation or underfunding by an employer. ERISA's primary purposes are to provide employees with clear information about their benefits and a claims process that "levels the playing field" when individual participants appeal a denied claim. ERISA requires plan sponsors to act responsibly and fairly in the distribution of benefits.

Benefits Governed by ERISA

Your employer may provide some or all of the following types of benefits:

• Medical and surgical coverage

• Behavioral health care, including residential treatment coverage

• A 401(k), 403(b), cash balance, or other defined contribution plan

• A pension plan

• Long-term disability income

• Life insurance

• A legal services or child care expense plan

ERISA does not mandate that employers offer these benefits, but if offered, employers must follow minimum standards, including:

• Procedural safeguards: The act requires that companies provide written policies for how claims should be filed and the process to be followed when a claim is denied.

• Disclosures: ERISA requires that plan participants receive disclosures that include a plan summary and other key descriptions of the coverage and limitations of the plan.

• Conduct: Under the Act, certain individuals are "fiduciaries" that must carry out their responsibilities for the exclusive benefit of participants and beneficiaries of the plan. Fiduciaries can be held accountable for breaching their fiduciary duties under ERISA.

Because ERISA is a federal law, you may work with an attorney anywhere in the country. While it may be preferable to have someone close to you, most legal work in the area of ERISA is done remotely, because there are so few attorneys who practice in this area, particularly on the employee side.

We Help You Navigate the ERISA Claims Process to Access Vital Employee Benefits

If you work in the private sector, you likely have a package of benefits in addition to your weekly or bi-weekly pay. For example, your employer may provide health care benefits, a 401(k) or pension plan, or long-term disability income if you become disabled. Congress enacted the Employee Retirement Income Security Act of 1974 (“ERISA”) to strengthen the rights of workers who count on these benefits, and to ensure that these plans were subject to the same rules across the country, regardless of the state in which you live or work, Though few employees or their dependents know it, ERISA actually provides them with very strong procedural protections if their benefit claims are denied or calculated incorrectly, they are unable to obtain basic information about their benefits, or many other situations where their promised benefits are at risk of being lost or diminished.

Claiming your benefits.

When you make a claim for benefits and it is denied or incorrectly paid, you may struggle to cover needed medical treatments or ongoing mental health care, or even the basics of life if you are disabled and not working. Or you may believe your retirement benefits were not calculated correctly, impacting your lifestyle in retirement.

ERISA helps in these and other situations by requiring the plan or claims administrator to respond to your claim or questions within certain mandatory time frames. In addition, the response must provide detailed information about why your claim was denied or how your benefit was calculated, so that you may prepare a strong appeal to the plan and have the denial overturned.

Information to which you are entitled. Employer plans are required to provide descriptions of your benefits that are easy to understand, and a written claims process that you may follow to obtain your benefits. Typically this information is contained in a Summary Plan Description, or “SPD.” It is mandatory under ERISA for a plan to provide participants and beneficiaries with an SPD at regular intervals and on written request. If you do not get the information you request, ERISA permits courts to assess penalties against an employer that may be as high as $110 per day starting the 31st day after a written request. Health, retirement, and disability or other plans often do not follow the processes required under ERISA, and it is important to work with an attorney to document these mistakes as you seek your benefits.

Timelines for the initial ERISA claim decision. Once you file a claim for benefits, the plan or claims administrator (usually but not always an insurance company or third party hired by your employer to process claims) must comply with these deadlines:

• For a disability claim, the plan administrator has 45 days to make an adverse determination (deny your claim), with up to two 30-day extensions available to them if the administrator requests them properly

• For a health care claim, there are different mandatory time periods for urgent care, pre-service, post-service, and concurrent care claims, with the longest decision-making period being 30 days for post-service claims. The other claims have much shorter deadlines

• Retirement and other benefits permit the administrator to take up to 90 days to decide.

These are mandatory time frames, and the plan must communicate with you in writing about the status of your claim. The summary above is highly simplified: there are many procedural requirements a plan must follow under ERISA’s regulations, and because of their complexity it is common for plans to make missteps. It is important to work with an attorney knowledgeable about ERISA’s claims procedures as you seek your benefits, so that the plan’s mistakes are documented for any future court action.

Challenging the Denial of an Employee Benefit Claim

Appealing a denied claim

If your initial claim is denied, ERISA's detailed regulations require that the insurer or plan provide a fair and transparent appeal process, within specific timeframes. An appeal must be done before initiating litigation, or the court will not hear your case. If the insurer or plan does not follow ERISA's claims procedure rules, in some circumstances you may be able to initiate litigation before the appeal is complete. It is critical to provide the strongest appeal possible because, in the majority of cases, a court will only review what you have provided to the plan on appeal to determine if the insurer or plan has been "arbitrary and capricious" in its decision, a fairly high burden to overcome.

Crucial Deadlines for an ERISA Appeal

As the claimant, you typically have 180 days from the date of the denial to appeal the decision, however, a statute of limitations for filing a lawsuit may be shorter and run separately from the appeal timeline. It is therefore critical to consult an attorney soon after your claim is denied.

• The plan administrator must decide a disability claim appeal within 45 days, with one 45-day extension if properly requested.  

• For health care claims, the decision time frame varies depending on the type of claim. Generally, for a pre-service claim, the response must be within 30 days, and for a post-service claim the insurer must respond within 60 days of the appeal. 

• For concurrent claims (an ongoing course of treatment or a number of treatments): notification of any reduction or termination of the course of treatment must be sufficiently in advance of the reduction or termination to allow the claimant to appeal and obtain a determination on review of the adverse decision before the benefit is reduced or eliminated.

• For all other claims, appeals must typically be decided within 60 days of the plan's receipt of the appeal.

Like the initial denial, the insurer’s or plan’s denial on appeal must include very specific information so that you understand why your claim was denied and whether you have a strong case for litigation. In some cases you have a chance to request additional information from the insurer and make a second appeal.

If your appeal is denied by the plan and your case is strong enough to warrant filing a lawsuit, your case will be reviewed by a judge, typically through a motion that provides the court with the record put together during the appeal process, called the administrative record. It is critical that you make the strongest appeal possible, not only to overturn the denial but also to prepare for litigation, because your case will rest on the strength of your appeal and any mistakes the plan made in processing your claim. If you have not prepared a convincing administrative record for challenging your denial, it is unlikely you will prevail in court because, typically, you cannot add documentation to your record after the appeal.

McKain Law, PLLC can help you build a strong case for your appeal during this internal review period. For example, in long-term disability cases, the firm may help you obtain an independent medical examination, collect statements from relevant medical professionals, and research and document all aspects of your claim.

Because ERISA is a federal law, you may work with an attorney anywhere in the country. While it may be seem important to have someone close to you geographically, most legal work in the area of ERISA is done remotely, because there are so few attorneys who practice in this area, particularly on the employee side. Geographic distance should not prevent you from finding the attorney best suited to build a strong case for you.