The U.S. Workers Most At Risk of Benefit Denials

• Every year in the U.S., 1 in 5 insurance claims are denied, with fewer than 1% of denials ever appealed.

• During 2023, the Employee Benefits Security Administration (EBSA) recovered $844.7 million in previously denied benefits for U.S. workers.

• Public awareness of appeal rights is critically low, meaning millions of workers may lose benefits they’re legally entitled to under the Employee Retirement Income Security Act (ERISA).

The Employee Retirement Income Security Act (ERISA) governs over 156 million American workers, retirees, and dependents across more than 2.6 million health plans and 800,000 pension and welfare plans. Yet every year in the U.S., roughly 1 in 5 in-network insurance claims are denied, with fewer than 1% of those denials ever appealed.

This study will consider why there are so many denials, who suffers most from the denials, and what is and can be done about people being denied benefits.

In terms of protecting U.S. workers and their families, the Employee Benefits Security Administration (EBSA) plays an increasingly crucial role in safeguarding the correct dispensation of retirement, health, and other workplace-related benefits. 

Benefit Denials and EBSA’s Crucial Role

EBSA’s role is to enforce ERISA provisions. As such, it helps U.S. workers understand their rights and benefits, making sure the right pension and health plan payments are made to those eligible, in line with federal regulations.

During 2024, EBSA oversaw approximately 2.6 million health plans, 801,000 private pension plans, and 514,000 other welfare benefit plans. This oversight concerns around 156 million workers, retirees, and dependents, and plan assets worth an estimated $14 trillion. 

To illustrate the importance of EBSA oversight: Kaiser Family Foundation data tells us that, during 2023, EBSA closed 731 civil investigations and recovered $844.7 million in previously denied benefits across various ERISA-covered plans. 

Claims and Denials

If someone needs to make a claim, it depends on the policy and the circumstances of the policyholder. But as an illustrative example, under ERISA regulations for group health-care benefit plans, the timeframes for an initial decision regarding a claim are: 

• 72 hours for urgent care decisions; 
• 15 days for non-urgent pre-service decisions (with a potential 15-day extension); 
• and post-service decisions within 30 days (with one potential 15-day extension).

For disability-benefit claims covered by ERISA: 

• initial decisions are usually made within 90 days, with a possible extension of up to an additional 90 days; and
• appeal decisions should be resolved within 45 days.

In 2023, insurers offering plans through the federal marketplace denied 19% of in-network claims and 37% of out-of-network claims.

Among states in 2023, the highest average in-network denial rate was 34% (Alabama), with the lowest in South Dakota (6%), perfectly illustrating the wide national variance in claim denials.

Whereas, in Florida, the average in-network denial rate was 16%, with individual insurers varying between 8% to 54%, emphasizing the potentially enormous non-network differential.

Here are the top 10 states to have denied ACA (Affordable Care Act) claims, plus their in-network denial rate.

Rank	State	In-Network Denial Rate
1	Alabama	34%
2	Oklahoma	29%
3	Alaska	25%
4	Hawaii	24%
5	Indiana	23%
6	Texas	22%
7	Arizona	21%
8	Illinois	20%
9	Ohio	19%
10	Nebraska	19%

Among large insurers (those subject to more than 5 million claims during 2023), denial rates for in-network claims ranged from 13% to 35%. Across the U.S., fewer than 1% of in-network claim denials were appealed by consumers, a figure that leaves countless uncontested millions of dollars denied to rightful claimants.

In 2024, the EBSA closed 729 civil investigations. 71 % of those cases were successful or resulted in corrective actions, with recoveries totaling approximately $741.9 million. That’s an enormous amount of money, initially withheld. But who are the people most likely to miss out on benefits?

Industries/Occupations That Feature The Most Benefit Denials

According to 2023 Bureau of Labor Statistics (BLS) data, private-industry workers reported an average of 2.4 cases of injury or illness for every 100 full–time workers.

This represents the national baseline for job-related incidents that can trigger disability or benefit claims. Yet, the implicit risk of injury and illness varies sharply across industries.

For example, in 2023, the following average number of cases of injury or illness were recorded in each industry.

• Agriculture, forestry, fishing, and hunting: 4.2 cases of injury or illness per 100 full–time workers.
• Coal mining: 4.4 cases per 100.
• Crop production: 4.5 cases per 100.
• Fruit and tree-nut farming: 5.2 cases per 100.
• Animal production: 8.7 cases per 100. 
• Hunting and trapping: 9.4 cases per 100.

These illness or disability case numbers are all far above the national average. Yet so many workers in each respective dangerous industry don’t even have access to disability insurance.

Access to Disability Benefits

As of March 2024, only 34% of private-industry workers had access to employer-provided long-term disability insurance (compared with 48% of state and local government workers). Limited access among high-risk, lower-wage occupations vastly increases the likelihood of ineligible or denied claims.

Here’s a breakdown of some key disability benefit access statistics (March 2024 figures).

• Only 36% of private-industry workers in the West Census region had access to short-term disability insurance. 
• Among workers in industries classified in the lowest wage quartile (or the bottom 25% of wage distribution), only 24% had access to short-term disability insurance. 
• For full-time workers in private industry, 53% had access to employer-supported short-term disability insurance; however, for part-time workers, the access rate was far lower at 22%, highlighting commonplace large coverage gaps for non-full-time roles. 
• Among private-industry workers employed by establishments with 1 to 99 employees, only 30% had access to employer-supported short-term disability insurance. For establishments with 500 or more employees, that number rises dramatically (69%), clearly indicating that smaller firms are significantly weaker when it comes to offering employee protection. 
• Access to paid family leave and short-term disability insurance varied depending on occupational wage distribution. Workers in the top 25% had 68% access to employer-supported short-term disability insurance, while those in the bottom quarter were restricted to just 24%.
• A recent analysis found that initial claimants for SSA disability waited on average more than seven months for an initial determination (as of August 2024): this wait has almost doubled since 2017, when the waiting period was 3.7 months. Such a lengthy determination period may be difficult to endure for claimants fully reliant on benefits.
• Additionally, a 2023 ERISA report found that many long-term disability benefit plans impose a two–year maximum benefit for mental–health and substance–use disabilities, while physical-illness disability benefits are often paid until retirement age. 

Federal watchdog reviews have confirmed some major deficiencies regarding how denials are tracked. In 2024, the U.S. Government Accountability Office (GAO) recommended that the Centers for Medicare & Medicaid Services mandatorily report and make public all claim denials and appeals.

This recommendation highlights the scarcity of employer transparency and accountability when it comes to plan details and claim denials. 

EBSA Investigations, Audits, and Enforcement Actions

Earlier in this study, we showed the extent to which EBSA has successfully recovered significant amounts of money for wrongfully denied claimants.

ERISA’s own Advisory Council (EAC), while conceding that many health insurers “improperly deny claims,” has already issued 12 recommendations aimed at strengthening claims oversight under ERISA-style rules. 

The recommendations include improvements such as:

• “Update existing regulations relating to urgent care claims to speed the processing of such claims.”;
• “ Develop and implement an educational campaign to better inform claimants about their appeal rights and how to obtain assistance from governmental agencies and consumer assistance organizations when needed”; and
• “Mandate that clinical determinations be made in accordance with generally accepted evidence-based standards of care and treatment.”

A U.S House of Representatives document from June 2024 notes that under current rules, millions of small plans (involving fewer than 100 participants) remain exempt from key reporting requirements, leaving room for abuse and a lack of transparency when denying claims. 

If a wrongful denial is discovered, voluntary compliance letters (VC) are issued. While this often leads to recovery of funds, the neutral nature of the arrangement means that those denying benefits to rightful claimants may escape not only punishment but also public scrutiny and accountability.

Once benefits have been denied, there may then be an appeal. But who is appealing, and who isn’t? And how successful are appeals?

Demographic Breakdown of Appeals

National marketplace data tells us that fewer than one percent of initially denied in-network claims were appealed in 2023. And, according to an American Medical Association article, among prior-authorization denials of Medicare Advantage plans, only one in ten of the denied requests were appealed in 2022.

National Library of Medicine research of external appeals in New York State (in the urology service category) found that an appeal is often dependent on certain claimant characteristics.

According to the research data, older patients presenting a complex diagnosis and prior treatment documentation were much more likely to be successful than other claimants. 

Another investigation notes that insurance carriers use automation and long, impenetrable documentation to discourage appeals, while many patients report the process is “too much” and give up.

A survey of 1,000 physicians revealed that only 18% of physicians always appeal adverse prior-authorization decisions for their patients. Among the reasons for not appealing, 18% cited doubts about success, 55% said they lacked sufficient resources, and over half said the patient’s care could not wait. 

Methodology Note 

Because private-employer ERISA plans currently don’t offer publicly available aggregated appeal-rate data, we instead draw on ACA and prior-authorization appeal data governed under parallel claims-and-appeals frameworks to make qualified observations about ERISA appeal information.

ERISA Denials: How To Curb Them

ERISA oversees over 156 million American workers, retirees, and dependents across more than 2.6 million health plans and 800,000 pension and welfare plans.

With roughly 1 in 5 U.S. in-network insurance claims denied, and fewer than 1% of those denials ever appealed, it’s clear that countless millions of United States claimants are not getting the benefits they are entitled to.

Furthermore, the Employee Benefits Security Administration (EBSA) recovered more than $740 million for workers and beneficiaries in fiscal year 2024, proving systemic issues that required the necessity of corrective enforcement intervention.

Benefit coverage gaps mirror denial exposure—low-wage, part-time, and small-business employees suffer the weakest access to both short- and long-term disability insurance.

Among private-industry workers, only 34% have access to employer-provided long-term disability coverage, compared with 48% in the public sector. Physical labor sectors such as construction, retail, transportation, and service industries combine higher injury rates with lower benefit access, creating the highest risk of denial.

The lack of appeals against denials is also disproportionately high. Most Americans denied benefits simply do not appeal due to time constraints, the complexity of the appeals process, a lack of access to relevant information or a lack of awareness of rights, or the perceived futility of even attempting to appeal.

When appeals are filed, they often succeed—yet over 80% of overturned denials highlight that many legitimate claims never reach review.

Across the U.S., fewer than 1% of in–network claim denials were appealed by consumers, a figure that leaves countless uncontested millions of dollars denied to rightful claimants

And under many plans, mental-health and substance-related disability claims face far shorter benefit limits and stricter review standards compared to physical disabilities.

There’s room for significant improvement regarding the fairness of:

• Benefit payment
• Access to benefits
• Eligibility assessment waiting times – during which claimants are often out of pocket, which can, in turn, mean employees, families, and employers all lose out
• Claimant awareness regarding eligibility for both benefits and the right to appeal
• The clarity and accessibility of information and the complexity of the application process
• The varying length of disability payment durations.

While regulatory oversight is improving, data transparency remains limited, with small employer plans often exempt from disclosure requirements.

Public awareness of appeal rights is critically low, meaning millions of workers may unwittingly forfeit benefits they are legally entitled to under ERISA. Ultimately, if you’re due benefits, you should get them. With the right improvements in place, such as mandatory transparency and accountability, more Americans would get what is rightfully theirs.

With J Price McNamara, recover your denied insurance benefits with a former insurance company attorney in your corner (it’s our specialty and 100% ALL we do). Get in touch today: if you’ve been denied benefits, chances are we can help you!