Enforcement Of Your Right To Information And Copies Of Documents
Timeline for Denial Of Beneifts
ERISA is very specific about how a Plan may deny a benefit.
If a Plan Administrator wants to deny a claim, the denial must be made within a reasonable period of time after the claim is filed. Under ERISA, that means within 90 days unless special circumstances require an extension.
If an extension is required, you should receive written notice about the extension during the 90 day period after you filed your claim. The extension cannot last more than an additional 90 days.
The denial letter must include:
- The specific reason or reasons for the denial.
- Reference to the Plan provisions on which the denial is based.
- Listing of any material or information necessary to reverse the denial and an explanation of why it is necessary.
- Information on how you may appeal the denial -- as described in more detail in the next section.
Your Right To Appeal A Denial Of Benefits
Every denial letter must include a statement detailing how the claimant may request a review of the claim denial and present material to have the denial reversed.
Although each Plan may establish its own procedure within the guidelines of ERISA, generally:
- All appeals of denials must be made in writing within a reasonable time after the denial (ERISA considers 60 days to be reasonable under normal circumstances).
- The Plan must review the request and all documents submitted in support of reversing the denial.
- Under insured plans, the insurance company may provide the review procedure rather than the Plan Administrator.
- A decision on the review must be made within 60 days of receiving the appeal. However, in special circumstances, the time period may be extended an additional 60 days, provided written notice is given to the claimant during the first 60 days.
- The decision on review must:
- Be in writing.
- Include specific reasons for the decision.
- Include specific references to the relevant Plan provisions on which the decision is based.
- Be written in a manner calculated to be understood by the claimant.
External Appeals: If, after going through all internal appeals procedures, you still maintain the claim should be approved, you may file suit in a state or federal court.
The court will decide who should pay court costs and legal fees. If you lose, the court may order you to pay these costs and fees, particularly if it finds your claim is frivolous.
Limitation on Right To Sue
Employers are encouraged to comply with the ERISA requirements because the law imposes substantial fines on employers and other fiduciaries for not complying with ERISA provisions.At the same time, employees are limited in their right to sue under ERISA. as follows:
- Employees must sue under federal law. Employees are prevented from suing their Benefit Plans under state contract law.
- Employees are prevented from collecting punitive damages in federal court. A Plan losing in federal court would only be required to pay the benefits that had been denied originally, with no additional penalty other than the possibility of having to pay some attorney's fees.
- While attorney's fees may be awarded at the judge's discretion, no contingency fee arrangements are permitted, which means you have to pay cash (or find a lawyer to work for free.) It can be very difficult for an individual to find legal counsel and to afford the hourly rates required to retain such counsel.
Most courts also hold that there is no right to a jury trial for ERISA litigation.
To Learn More
More InformationHealth-Appealing Claims Long-Term Disability-Appealing Claims
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