Common ERISA Compliance Errors
A single paperwork slip by an employer or insurer can ripple into months of lost benefits for employees. Unfortunately, strict rules govern employee benefit plans, and mistakes by plan administrators are common. ERISA compliance errors range from procedural violations and missed deadlines to faulty plan documents, and they can put an employee’s health, life, or disability benefits at risk. For South Carolina workers, understanding which errors are most critical helps explain why claims are denied and what can be done to rectify them.
Attorney John Peace has spent over 20 years representing individuals in ERISA cases, never representing insurance companies or employers. His Greenville-based firm focuses on disability and benefits claims, utilizing his background in business and insurance to advocate for individuals who have discovered their benefits were mishandled. With free consultations, the Peace Law Firm makes it easier to learn whether a compliance mistake may have cost you what you deserve.
What Does ERISA Require?
The Employee Retirement Income Security Act of 1974 sets federal standards for private benefit plans. Employers and plan administrators must:
- Provide clear plan documents;
- Give participants accurate disclosures;
- Handle claims and appeals under fair, timely procedures; and
- Act solely in the interest of plan participants and beneficiaries.
When administrators cut corners, employees suffer. Federal courts in South Carolina, applying ERISA and Fourth Circuit precedent, carefully review whether administrators have met these fiduciary duties.
What Are Common ERISA Compliance Errors?
Here are several of the more common errors that can derail an ERISA claim.
Missed Deadlines and Notice Failures
One of the most frequent ERISA compliance errors involves time. Under federal regulations, plan administrators must follow strict deadlines when it comes to processing benefits, including:
- Initial disability claim decisions made within 45 days (extendable only for specific reasons); and
- Appeals typically decided within 45–90 days, depending on the type of benefit.
When administrators delay or fail to notify participants promptly, employees lose valuable time and may miss their chance to respond. Courts have criticized and, in some cases, penalized insurers who ignore these rules, recognizing that delay undermines ERISA’s promise of fairness.
Faulty or Incomplete Plan Documents
Plan documents serve as the foundation of an employee’s rights. Errors such as outdated policies, conflicting terms, or failure to provide a Summary Plan Description (SPD) create confusion. Plans must provide SPDs that are “written in a manner calculated to be understood by the average plan participant.”
If your plan materials are missing or inconsistent, that may be grounds to challenge an adverse decision.
Mishandled Claims and Appeals
A central promise of ERISA is the right to a “full and fair review.” Mistakes here include:
- Ignoring medical evidence from treating physicians,
- Relying exclusively on paper reviews without independent exams,
- Refusing to provide claim file access during an appeal, and
- Using conflict-ridden medical reviewers paid by the insurer.
These errors can violate both federal regulations and fiduciary duties under ERISA, which requires loyalty and prudence. South Carolina employees can challenge denials based on these flaws, especially when insurers cut corners to save money.
Employee Misclassification
Another recurring problem arises when companies misclassify workers as independent contractors. Misclassified employees may be unlawfully excluded from benefit plans. The Department of Labor enforces these rules; however, litigation is often necessary to secure benefits that have been wrongfully denied.
The impact for individuals is immediate: no health coverage, no disability protection, no retirement contributions. Correcting classification requires both factual evidence and legal analysis, which an experienced ERISA attorney can provide.
What Are the Remedies for ERISA Compliance Errors?
Employees harmed by compliance mistakes have several remedies:
- Benefit recovery. Courts can order the payment of benefits that were wrongly denied.
- Statutory penalties. Courts may impose up to $110 per day when administrators fail to provide plan documents in response to written requests.
- Attorney fees. Courts may award fees to successful plaintiffs, easing the financial burden of litigation.
While remedies exist, asserting them requires navigating strict federal court procedures. That is where experienced legal guidance becomes critical.
Contact the Peace Law Firm
The Peace Law Firm has represented individuals in Greenville and throughout South Carolina since 2002, focusing on disability and benefits claims. Attorney John Peace combines an MBA, prior experience in the insurance industry, and over 20 years of ERISA litigation to advocate for employees. We do not represent insurance companies or employers; we only represent individuals whose benefits are at risk.
Because strict rules and deadlines govern ERISA cases, early legal guidance often makes the difference between dismissal and recovery. If you suspect your claim was mishandled, the Peace Law Firm can evaluate the errors and fight for the benefits you earned. With free consultations and contingency fee representation, we make it easier to learn whether a compliance mistake may have cost you what you deserve. Contact us and let us help you pursue your rights without adding financial strain.
Additional Resources
Fidelity PSW: What Do I Need to Do If I Am a Fiduciary? Link
Legal Information Institute: 29 U.S. Code § 1104 - Fiduciary duties. Link
CHAPTER 18-EMPLOYEE RETIREMENT INCOME SECURITY PROGRAMSUBCHAPTER I-PROTECTION OF EMPLOYEE BENEFIT RIGHTS. 29 USC 1132: Civil enforcement. Link
Rate this Post
Loading...