Group health plans generally cover an employee, their spouse, and their dependents.
The Employee Retirement Income Security Act of 1974 (“ERISA”) is a federal law that affords individuals who receive employee health insurance and other incentives through a group benefits plan certain protections and rights — even when a claim or coverage is denied.
What rights you’re afforded under ERISA
You have a right to know exactly why your claim was denied. ERISA requires group benefits plan administrators to provide written documentation outlining the reasons for their decisions and not charge for them. You have a right to appeal such denial in either state or federal court, provided that you bring your claims within the statute of limitations. It may be possible for you to seek further assistance from the U.S. Department of Labor if there’s evidence that the administrator denied your claim due to misuse of plan funds or discrimination.
Additionally, you can file a lawsuit in federal court if your request for a copy of plan documents or the latest annual report goes unanswered. The amount of the penalty the plan administrator or insurer may have to pay varies depending on which documents they withheld. For example, a failure to provide a Summary of Benefits and Coverage (“SBC”) carries with it a potential $1,190 fine per violation. This amount is prorated on a per diem basis until the requested materials are turned over by the plan administrator.
Countless plan administrators deny a former employee’s group benefits for unfair reasons, leaving them without the coverage they count on or expected. You must understand what your rights are as afforded by ERISA. That knowledge will guide you as you determine which steps to take next.