Explaining the Federal ERISA Statute
ERISA stands for the Employee Retirement Income Security Act of 1974. According to this federal statute, which is a part of the United States Code (U.S.C.), insurance companies that provide employer-sponsored benefit plans must follow minimum standards, procedures, and guidelines at all times. Specifically, they must make plan beneficiaries aware of certain information, including financial information, and they must do so at regular intervals. Moreover, they must allow plan participants and beneficiaries to access the federal court system to address a grievance with the insurance company. Ordinarily, if a beneficiary makes a claim under an insurance policy, and the insurance company denies the claim, they must exhaust all of their administrative remedies before filing a lawsuit against the insurance company directly in the federal court system. Because the federal ERISA statute contains complicated language and phrasing, it can be complicated for the average person to understand. If you think you may need to appeal an adverse decision from an insurance company, your attorney can research the necessary cases and help you determine whether the ERISA statute may apply to the facts and circumstances of your case. If it does, your lawyer can take the necessary legal actions on your behalf and help you pursue the benefits you deserve under an insurance policy.Denying a Beneficiary’s Claim for Life Insurance Benefits
First, an insurance company may deny a claim for benefits if the insured policyholder fails to keep up with their monthly premium payments during their lifetime. In some instances, elderly individuals might forget to make a payment or simply not have the financial means to continue making payments on the policy. If an insured policyholder fails to make a payment, the insurance company must typically notify them in writing of their intention to terminate coverage. In most situations, an insurance company may not simply stop coverage if the policyholder misses a payment. In the event, the policyholder does not take heed of the insurance company’s written communication and fails to resume payments (or make back payments), then the insurance company may validly and legally deny a claim for benefits a plan beneficiary later makes. In other situations, an insurance company can deny a claim for benefits if the policyholder made intentional representations or falsehoods on their initial application for coverage. For example, the policyholder might have failed to list a significant medical condition, such as heart disease, which they suffered from at that time. Alternatively, the policyholder might have chosen not to disclose a debilitating health condition or a harmful habit, such as smoking, that will likely affect their health—or precipitate their death. Again, suppose a beneficiary goes to make a claim under the life insurance policy, especially if the policyholder passed away within the period of contestability. In that case, the insurance company may validly deny the claim following a thorough investigation. Moreover, a life insurance company can deny a claim for benefits if the policyholder fails to validly name a plan beneficiary in their policy. For example, the policyholder might have named a minor child as the life insurance beneficiary, or they may have named a spouse whom they later divorced as the beneficiary. An insurance company can also deny a claim for life insurance benefits if the policyholder’s death occurs within an express policy exclusion. For example, some insurance companies will exclude various types of death from life insurance coverage, including suicide or homicide. In addition, a policyholder’s death might be excluded from coverage if their death resulted from one or more illegal activities, such as failing to wear a seatbelt before a car accident, alcohol or drug abuse that caused adverse health conditions, or operating a motor vehicle while under the influence of alcohol or drugs. In some situations, insurance companies have valid legal reasons to deny a claim for life insurance benefits. However, at other times, a claim denial might be arbitrary or capricious. In the latter instance, you can validly appeal a claim denial. A skilled ERISA attorney in your area can help you determine if you have a valid legal basis to file an administrative appeal with the insurance company. If so, your attorney can assist you with every step of the legal process, including gathering the necessary documentation and submitting the claim documents to the insurance company. Your attorney can also represent you in the required legal proceedings if a further appeal is warranted. What Are the Steps You Must Take After a Life Insurance Benefits Claim Denial?
If an ERISA insurance company recently denied your request for life insurance benefits, there are several steps you should take to pursue the full benefits you deserve.Step One
The first step to ultimately recovering these life insurance benefits is to determine why the insurance company denied your benefits claim in the first place. By law, an insurance company must send you a written denial letter that explicitly outlines the reason or reasons for the claim denial. For example, the policyholder might have failed to pay their premiums during their lifetime, and the insurance company may have cut them off. Alternatively, the policyholder might not have responded truthfully to questions on an initial policy application. A knowledgeable ERISA attorney can thoroughly review the benefits denial letter and help you determine why the insurance company rejected your benefits claim.Step 2
Next, you should learn about the appeals process. A claim denial letter should have specific information about how to start the process and what you need to include in an administrative appeal. However, even with these instructions, you need legal representation for the appeal process. Should you miss something, it can result in a final denial - even if it is wrongful. Further, there is more you should know about the appeal process than the insurer includes in your denial letter. The letter should also state the deadline by which you must file your appeal. If you miss the deadline, you are almost certain to receive another claim denial letter. Take action and seek legal help immediately.Step 3
Let a knowledgeable ERISA attorney secure the benefits you deserve, and you need to hire one as soon as possible. Your attorney can help you gather essential appeal documents, submit them to the insurance company, or represent you at a court proceeding if you ultimately have to appeal your case to the federal court system.Step 4
Next, you should gather sufficient documentation to support your administrative appeal. Administrative appeals are the only time an individual may add supplemental documents to the record. If the case ultimately proceeds to federal litigation, you and your lawyer cannot supplement the record at that time. During an administrative appeal, your lawyer must submit all possible evidence to support your claim for benefits, including:- The actual life insurance policy
- The policyholder’s death certificate
- Notes and reports from medical providers
- Receipts from premium payments showing the policyholder made the required payments over their lifetime
Step 5
Likewise, a skilled ERISA attorney can assist you with filing your appeal paperwork. Before you file, make copies of all documents and secure these documents in a protected location, such as a safe deposit box. In addition, you may want to provide a trusted family member, or your attorney, with copies of these documents—just for added security. Again, you should follow all of your insurance company’s instructions when filing your administrative appeal. Otherwise, the chances are high that you will receive another claim denial.Step 6
Next, you should follow up with your insurance company to make sure they receive copies of your appeal paperwork, as well as supporting documentation. For example, you can track the package containing your appeal documents, or you can request the insurance company provide you with delivery confirmation in writing. Your lawyer can handle this for you. A knowledgeable attorney can assist you with each of these seven steps and can help you pursue the life insurance benefits that you deserve.Appealing a Claim Denial in Federal Court
If you receive a second claim denial from the insurance company, and you have exhausted all of your administrative appeal remedies, you can file a lawsuit against the insurance company in the federal court system. However, after filing a lawsuit, you or your lawyer are ineligible to supplement the record. Instead, a federal court judge will use the documents already part of the record when deciding on your case. In addition, after filing a federal lawsuit, the court will typically schedule a hearing date that you and your attorney must attend. At this hearing, your lawyer can make various arguments on your behalf in support of your case. Before your federal court hearing, your attorney can also perform necessary case research on favorable ERISA cases throughout the country. During oral argument, your lawyer can cite any favorable cases as a basis for recovering the benefits you deserve from the insurance company. By having an experienced ERISA attorney advocating for you in court, you significantly increase your chances of winning the case and recovering the life insurance benefits you deserve.Speak with a Knowledgeable ERISA Attorney about Your Legal Matter Today
J. Price McNamara
Attorney
Losing my own brother, then my father and sister after long, disabling illnesses just a few months apart drove a career change for me. Before that experience, I never truly understood the place you’re in. I never understood the dramatic impact that receiving (or not receiving) the disability and life insurance benefits you paid for and counted on can have on your life especially when you need to focus on family and healing. What I experienced with my own family now drives the way I view my clients and my work, and I will never forget it!
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