If you’re having trouble with your employer-sponsored health plan for a long term disability issue, you’re not alone. Lots of Americans have their claims denied or receive confusing answers from their insurers, and because they don’t really understand how a health plan covered under ERISA law works, they often don’t know what to do to fix the problem.
That’s why I decided to break down the basics of how most plans under ERISA are set up. It’s not going to make you an expert, and you definitely still want to work with an attorney if you need to file a lawsuit against your insurer, but hopefully it will at least make some things clearer.
The Basic Setup for Plans Covered By ERISA
The first and most important thing to know is that if you get insurance from an employer, you most likely have a plan covered under ERISA law. After that, you have to understand that you’re probably going to need to lower your expectations for what you’ll get if you file a lawsuit. Unlike with independent plans, people covered by ERISA can’t sue for punitive damages, bad faith, emotional distress, unfair practices, and many other things that seem like they should be allowed.
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How does ERISA insurance work?
There’s a plan. This includes the policy and a “core set of defining documents,” as well as any amendments.
There’s an administrator. Basically, the administrators are the ones who decide if coverage for someone is accepted or denied. Insurers like to be the ones with this power and most of the time it’s given to them.
You have to go through internal review. If your claim is denied and you disagree, you are required to have the denial reviewed internally (i.e. by the insurer) and “exhaust” your administrative options with them before filing a lawsuit. This can be quite time-consuming.
You will get a benefits denial notice. ERISA regulations require insurers to send you a denial notice that explains why you were denied and what options you have to appeal the decision within a timely manner.
If your insurer meets all of the standard requirements, it is vital that you act fast to appeal. Because of this and the specific rules that have to be followed, you want to work with a lawyer experienced in ERISA cases.
Check out our free e-book for more information on ERISA claims and be sure to check back weekly for even more long term disability claim blogs!
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