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Understanding Retroactive Benefit Denials Under ERISA
ERISA is the Employee Retirement Income Security Act, which was enacted by the federal government in 1974 to protect employees' rights under benefit plans. A lawyer can help after an employee received notice of a retroactive benefit denial under ERISA.
November 13, 2011 /Finance PR News/ -- The laws regulating employee benefit plans are complex and cumbersome. Yet average employees are indifferent until they're denied a benefit, particularly when the denial is for a benefit that has been previously approved. Unfortunately, the retroactive denial of benefits happens frequently. This is a problem for the employee, the provider and the insurer.
What Is ERISA?
ERISA is the Employee Retirement Income Security Act, which was enacted by the federal government in 1974 to protect employees' rights under employer-sponsored benefit plans. ERISA only applies to private employers who offer employer-sponsored plans and does not apply to government entities. ERISA applies to two types of plans: retirement (or pension) plans and welfare benefit plans such as health, life, accident or disability insurance.
What Are "Benefit Denials?"
ERISA requires that each regulated plan must:
- Provide a procedure for an employee to file a claim
- Inform an employee within 90 days of eligibility for a benefit
- Have an appeal process for any denial
Once an employee files a claim, it is either accepted or denied. Benefit denials or adverse benefit determinations are defined by the Act as the "denial, reduction, or termination of, or a failure to provide or make a payment (in whole or in part) for a benefit" or "a failure to provide or make a payment that is based on a determination of a participant's or beneficiary's eligibility to participate in a plan."
A retroactive benefit denial is when the provider has received payment from the insurer but the insurer later determines that the benefit should not have been paid. This creates a nightmare situation because the insurer sees this as an overpayment that should be repaid and the provider is often unwilling to absorb the cost. Therefore, the provider may go after the employee (or patient) who is confused because the benefit has already been approved and paid for.
Further complicating matters, one has to figure out what protections ERISA may offer under these circumstances. It helps if the employee has a basic knowledge of his plan and what the law requires under ERISA. However, in these situations, an employee should consider consulting an experienced ERISA attorney.
Article provided by Feldman Fox & Morgado PA
Visit us at www.floridatrialattorneys.net/
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