What Are ERISA Claims and How They Work?
ERISA Claim Questions? Contact ERISA attorney John Peace to schedule a free, fully confidential review of your case: (864) 485-6958
Many people have never heard of ERISA. If everything is going smoothly with your benefits, you have little reason to. But if you’ve started having trouble accessing your employee group benefits, ERISA might be your best option for pursuing justice.
Below is everything you need to know about ERISA and ERISA claims. Just remember that you don’t need to be an expert. You just need a knowledgeable guide to help you when things go wrong.
At The Peace Law Firm, we’ve been helping South Carolina workers with ERISA claims for 20 years. If you think your ERISA rights have been violated, give us a call today.
ERISA Overview
The Employee Retirement Income Security Act (ERISA) protects employees' retirement and health benefits.
ERISA grants various rights to employees participating in a benefit plan covered under the Act. ERISA also provides causes of action for enforcing those rights.
There are many claims that you can bring under the ERISA statute. Congress wanted to give the law teeth, so you might be able to bring a claim for the following reasons:
- Recover benefits due under a plan covered by ERISA;
- Breach of fiduciary duty;
- Violation of ERISA or the terms of a plan; and
- Anti-retaliation.
In other words, filing an ERISA claim is how you pursue justice if you have been wronged by the companies that are supposed to provide you your work benefits.
Types of ERISA Claims
There are many types of ERISA claims you can bring. Here are some examples.
Denial of Benefits
An employee has a long-term disability plan that provides benefits if she is totally disabled. After suffering a serious fall at work, the employee struggles with a traumatic brain injury and other impairments. She submits a claim for disability benefits. However, the plan denies her claim, citing that she is not totally disabled based upon their review of the medical evidence. Because the employee wants to enforce the terms of her plan, she can bring a lawsuit.
Restricted Access to Benefits
An employee falls sick and goes to the doctor. The doctor performs several tests and decides that the employee needs to have surgery to address her condition. Her group health insurance plan will cover any medically necessary surgery, but to submit a claim she needs to pay a $100 filing fee with the insurance company. The employee believes this fee is hampering her ability to obtain benefits, so she sues to prevent having to pay for it.
Misrepresentations Regarding Benefits
An employee signs up for a life insurance policy. The plan administrator makes oral misrepresentations that the plan is worth much more than is stated on the plan document. The employee relies on these misrepresentations and signs up, only to realize later that the plan pays out far fewer benefits than he expected. In this situation, the plan administrator might have breached their fiduciary duty of honesty. The employee can often sue.
Unreasonable Fees
An employee participates in her employer’s 401(k) plan and reviews the fees being charged to her account. She discovers that the fees are significantly higher than expected and may not be reasonable or necessary. If the plan fiduciaries failed to act in the best interests of participants, she may be able to bring a fiduciary breach claim challenging the excessive fees.
Why ERISA Claims Are So Complicated
An assortment of statutory requirements and procedures make bringing ERISA claims complicated.
First, ERISA must apply to the plan involved in the claim. Second, an employee must try to remedy the dispute with the employer before bringing the claim to a court. Third, ERISA claims must follow civil procedure rules to bring the claim in federal court. Finally, the standard of review adopted by the court may make a claim more difficult to prove.
Questions about ERISA Claims? We Can Help. Let's Talk Today.
Submit the short form below. Johnny Peace will review your case for free.
We explain each one of these in more depth below.
Does ERISA Apply to the Plan Involved in the Claim?
ERISA governs a claim only if the benefit plan involved is covered by ERISA. The law applies to most employee benefit plans, including employer-sponsored health and retirement plans. However, ERISA does not apply to certain plans, such as government plans and church-sponsored plans.
Has the Employee Sought a Remedy Through Internal Claims Procedures?
ERISA provides internal claims procedures for determining whether to grant or deny benefits. Courts generally hear ERISA claims only after the employee exhausts these remedies.
First, the plan must provide an employee with notice of a decision to deny the benefits under the plan. The notice must give specific reasons for this decision.
Second, the plan must provide the opportunity for "a full and fair review" of this decision.
If the benefits remain denied after a full and fair review, the next step is to bring the claim to a federal court.
Initiating ERISA Claims in Court
Initiating ERISA claims in federal court comes with its own set of hurdles. There are several issues to keep in mind when initiating a claim under ERISA.
Proper Claim
The plaintiff must determine the proper ERISA claim to file. ERISA provides a variety of claims, but certain causes of actions may not be available in every case.
Procedure Rules
Federal civil procedure rules may apply to the claim. For example, ERISA claims may raise complicated issues of preemption, jurisdiction, and venue.
The employee must file the claim before the applicable statute of limitations passes. Some jurisdictions apply the state's statute of limitations. Other jurisdictions will apply a statute of limitations set by the benefit plan.
Standard of Review
The standard of review a court adopts has a significant impact on the outcome of the case. The court may review the decision de novo or under the arbitrary and capricious standard.
Federal courts usually review ERISA claims “de novo.” De novo simply means that the reviewing court will look at the issue “anew.” When the court treats the case as though it hasn’t been decided, it doesn’t give any weight to the agency’s original decision. De novo review is the default standard, and it can make ERISA claims easier to win on appeal.
If administrators have been given discretion over eligibility for benefits, the arbitrary and capricious standard governs. The court looks at whether the agency’s decision was “arbitrary and capricious,” meaning that it will generally uphold the decision unless it was clearly irrational.
Any reasonable explanation for the decision is enough to defeat the ERISA claim. This standard makes the employee's claim much more difficult to win.
ERISA Claim Timeline
While ERISA claims can be complicated, the timeline for one is very straightforward.
Each step happens sequentially. For example, you must file an internal claim before you file an administrative appeal.
Also, many of the steps have defined response or appeal periods. For example, your employee benefit plan usually has 60 days to make a decision on your administrative appeal.
While this highly structured timeline helps keep things clear, it can work against South Carolina workers who aren’t aware of its strict nature or who are too overwhelmed to take quick, decisive action.
When you work with The Peace Law Firm, we move quickly to make sure your ERISA claim meets the deadlines. We present a strong case at each adjudication point, working to get your claim approved as early in the process as possible.
Here are the steps in the process.
1. Review the Plan Documents
First, we obtain and carefully read the summary plan description (SPD), full plan document, and any recent amendments. We verify what benefits were promised. We check the procedural requirements.
2. File an Internal Claim
Next, we create a written claim and send it to the plan administrator following the plan’s specified process. We include all relevant evidence, such as denied benefits, communications, supporting documents, etc.
3. Wait for the Plan’s Decision
The plan has 90 days to respond to our written claim. In cases of disability claims, it only has 45 days. Sometimes the plan can receive an extension.
The plan’s decision must be in writing. If the decision is a denial, it must explain its reasons.
4. File an Administrative Appeal
If your internal claim is denied, our next step is to file an internal appeal. Typically, we have 180 days to file this internal appeal. In the appeal, we can provide additional evidence and clarify any misunderstandings.
5. Receive Final Decision
The plan must decide on our internal appeal within 60 days (or 45 for disability), with limited extensions. If the plan again denies the claim, the administrative remedies part of the process is over, and now we start the litigation stage.
6. File a Lawsuit in Federal Court
Once we have exhausted all administrative remedies, we can file an ERISA lawsuit in federal district court. We must file within the applicable statute of limitations, usually 1–3 years depending on the claim and jurisdiction.
7. Engage in Litigation
Once we file the case, the court reviews it based primarily on the “administrative record.” There is no jury trial. The judge decides the case based on the plan documents and evidence submitted during internal claims.
8. Potential Outcomes
If the judge rules in our favor at this point, we can secure:
- Reinstatement of benefits;
- Payment of denied benefits;
- Attorney fees and interest, if the plan is found to have violated ERISA; and
- Possible injunctive relief or penalties for fiduciary breaches or disclosure failures.
It’s very important that you complete each of these ERISA claim steps carefully because they build on one another. That’s why we encourage people to reach out to us as early as possible. The earlier we get involved, the better we can help.
Reasons You Can Bring an ERISA Claim
Filing an ERISA claim is the right approach if you want any of the following:
- You want to enforce the terms of your plan after being unfairly denied benefits;
- You want to remedy a breach of fiduciary duties, which are duties the plan owes to plan participants and beneficiaries; or
- You want to remedy any interference with the exercise of your ERISA rights.
In other words, you should file an ERISA claim if you want the company to do what it is supposed to do regarding your benefits.
Bringing an ERISA Claim
By bringing these lawsuits, employees are enforcing their rights under the benefit plans. They are also making sure that plan administrators and others are being prudent and honest in how they administer plans.
ERISA allows plan participants and beneficiaries to get into federal court to bring these claims. Otherwise, the claims would be stuck in state court with laws that do not provide the breadth of protection as ERISA does.
It is not always clear whether you have a valid ERISA claim. Rather than guess, or (even worse) simply assume that the law is too complicated to pursue, you can meet with a seasoned ERISA attorney to go over your complaints.
You might find that other plan participants have similar complaints and that a lawsuit might be an effective way of changing the plan’s behavior.
We have 20 years of experience tackling these complicated cases. If you need help with your ERISA claim, contact us today.
Rate this Post
Loading...