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My Claim for Benefits Under an ERISA Plan has Been Denied, What’s Next?

ERISA: Introduction

The Employee Retirement Income Security Act of 1974 (“ERISA”) is a federal law that protects an individual’s rights to benefits under employee benefit plans that are established or maintained by an employer or employee organization. The Act provides two categories of benefit plans: “welfare benefit plans” and “pension plans.” Under both plans, either a participant or beneficiary may receive benefits for medical, health, unemployment, vacation, and/or retirement. However, after making a claim for the benefits believed due, the claim is often denied. A denial of benefits is not the end of the road though.

Can I appeal a decision denying my claim for benefits?

Under ERISA, a plan administrator is required to provide a “reasonable opportunity” for a participant or beneficiary to seek “full and fair review” when a claim for benefits has been denied. However, a “full and fair review” does not mean a trial or formal hearing. Only a written record is required. The Eleventh Circuit has held that “full and fair review” of a denial occurred when the participant was (i) given written notice of the decision and the basis on which the decision was made, and (ii) a meaningful opportunity to dispute the findings.

Notice of Appeal Rights

Upon denying a claim for benefits, a plan administrator sends a letter to the participant or beneficiary indicating that the claim has been denied. However, in addition to notice of the decision and the basis upon which the decision was made, the letter must also contain notice of appeal rights. A letter that does not contain such notice is deficient as a matter of law.

Additionally, Department of Labor (“DOL”) regulations state that every claims appeal procedure must provide the following: (i) at least 60 days after notification of denial to appeal the determination; (ii) the opportunity for a participant or beneficiary to submit written comments, documents, records, and other information relating to the claim for benefits; (iii) notice that the participant or beneficiary, upon request and free of charge, shall be provided reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits; and (iv) provide for a review that takes into account all of the above, without regard to whether such information was submitted or considered in the initial benefit determination.

Time for Appeal

A participant or beneficiary appealing a denial of benefits must be given at least 60 days to file an appeal, with the deadline extended to 180 days for appeals of group health or disability benefit determinations. The time period in which an appeal is permissible begins to run upon receipt by the participant or beneficiary of a notice of denial that meets the ERISA requirements. However, this time period only applies to the first appeal. The only time requirement imposed upon second appeals is a “reasonable opportunity for full and fair review.” If the deadline is fast approaching and a participant or beneficiary requires more time to appeal, an extension may be provided upon request.

If you feel your rights under ERISA have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us either online or by calling us at (205) 3199724. We are here to serve you!