ERISA Wrongful Denial of Benefits Overview
In 1974, Congress passed The Employee Retirement Income Security Act (ERISA) to establish protections for private-sector employees who had health insurance or pension plans with their employer. Under ERISA, a wrongful denial of benefits can be appealed.
In other words, you can take your employer to federal court if their actions resulted in an ERISA-related denial of benefits.
Read on to learn more about ERISA litigation and how you can obtain the benefits you deserve. Also consider consulting a qualified ERISA denial of benefits attorney today.
What Does ERISA Cover?
ERISA covers almost all employer-provided benefit plans in the private sector. Covered plans include general health insurance plans, short-term disability plans, and long-term disability plans. ERISA also covers 401(k) retirement plans.
Keep in mind, however, that ERISA does not apply to every kind of plan. For one, it does not apply to plans provided by employers that are religious institutions.
Moreover, it does not apply to health plans and pension plans that any government body provides. All government bodies fall under this exemption from ERISA, including local, city, state, and federal governments.
Provided your plan is not exempt from ERISA, you can bring a claim against your employer for a denial of benefits. A qualified ERISA attorney will be able to confirm that ERISA applies to your benefits plan.
Bringing an ERISA Denial of Benefits Claim
Because it is a federal law, ERISA applies regardless of which state you live in. This means that you will always have to bring a ERISA wrongful denial of benefits claim in federal court, not state court.
Before you file a claim in federal court, however, you will have to first appeal the denial internally with your employer. Almost all private employers have an internal appeal process, but the precise details of the process vary from one employer to another.
The best time to hire an ERISA attorney is right before you file your initial internal appeal. Even if you do not win your internal appeal, having an attorney at this stage can help more effectively prepare for your federal case down the road.
An attorney may also be able to negotiate and settle your claim before it progresses further, saving you time and money.
Since ERISA is a special law that gives plan participants a unique claim in federal court, ERISA litigation works a little differently than other kinds of federal litigation.
One difference in ERISA claims is that there are no juries present to hear and weigh the evidence. Instead, a federal judge will evaluate the evidence based on the administrative record.
The administrative record includes your plan information, documentation relating to your internal appeal, and correspondence between you and your employer.
In some situations, your attorney may have to conduct limited discovery to obtain extra information and complete the record. Once the record is complete, the judge will weigh the evidence and decide the case.
ERISA Litigation Related to Breaches of Fiduciary Duty
Another feature of ERISA is that it imposes a fiduciary duty on ERISA plan administrators. This means that employers who manage ERISA plans have to act in the best interests of the plans’ participants and make sound financial decisions.
If the plan administrators violate their fiduciary duties, ERISA empowers wronged employees to sue the plan administrators. A breach of fiduciary duty claim is separate from an ERISA-related wrongful denial of benefits claim, but you may be able to bring both claims in one lawsuit.
Your Remedies After Suffering an ERISA-Related Wrongful Denial of Benefits or a Breach of Fiduciary Duty
Most ERISA denial of benefits claimants can receive only the amount of benefits that they should have rightfully received under their plan. Unlike with other kinds of federal cases, like injury cases, you cannot sue for punitive damages or compensatory damages.
That said, the Department of Labor may impose civil penalties on your employer for violating your ERISA rights. In addition, ERISA § 502(l) states that employers that violate their fiduciary duties can receive a financial penalty of up to to 20% of whatever benefit amount is awarded by the court.
In extreme cases, there are even criminal penalties against your employer; anyone who falsifies ERISA documents can face several years in prison. Keep in mind, however, that a breach of fiduciary duty lawsuit offers more remedies than a denial of benefits claim.
Considering Whether to Sue Your Employer for an ERISA-Related Denial of Benefits?
ERISA is an especially difficult area of law to understand. For one, the law itself is very complex. Also, the facts underlying even a simple ERISA claim can be staggeringly complicated.
If you’re facing an ERISA claim denial, then it’s easy to feel overwhelmed. However, there is good news. John Peace and the Peace Law Firm can fight for you. We are dedicated to helping our clients stand up for their rights.
We’ve successfully appealed many ERISA benefit denials, so we know what it takes to win. Most importantly, our clients are not just numbers to us but real people. With the Peace Law Firm, you will receive the world-class treatment you deserve.
Still not sure whether you should hire an attorney? Don’t worry. All our initial consultations are free, so there’s no reason not to contact us today. Together, we can help you defend your rights and receive your rightful benefits.