$20,000 Denied Life Insurance Claim Successfully Resolved
We are pleased to announce the resolution of a $20,000 denied life insurance claim on behalf of our client. This case involved an employer-sponsored life insurance plan, where the insurer wrongfully denied payment based on a procedural technicality. After reviewing the claim under the applicable provisions of the Employee Retirement Income Security Act (ERISA), our attorneys were able to successfully challenge the denial and recover the full benefit. This outcome underscores the importance of understanding how ERISA impacts denied life insurance claims that arise from workplace-provided policies.
Why Are Employer Life Insurance Claims Governed by ERISA?
Life insurance policies provided through employment are governed by ERISA because they are part of an employer-sponsored employee benefit plan. ERISA, or the Employee Retirement Income Security Act of 1974, is a federal law that sets minimum standards for how employer benefit plans are managed and administered. This includes rules for plan disclosures, fiduciary responsibilities, claim procedures, and appeals processes.
ERISA was designed to protect employees and beneficiaries by ensuring that benefits are handled uniformly across states and are not subject to conflicting local laws. However, while it offers certain protections, ERISA also imposes strict procedural requirements and limits legal remedies, making denied ERISA claims much more difficult to challenge than denials under private life insurance policies governed by state law.
Key Differences Between Denied ERISA Life Insurance Claims and Regular Denials
When a life insurance claim is denied, the path forward depends largely on whether the policy falls under ERISA. Below are the primary differences between ERISA-governed life insurance claims (typically group policies through work) and non-ERISA claims (usually private, individually purchased policies):
1. Time Constraints Are Tighter Under ERISA
ERISA claims are subject to short administrative appeal windows—often 60 or 180 days—and lawsuits must be filed within specific timeframes outlined in the plan documents. Regular life insurance policies follow state law, which may allow more time for appeals and legal action.
2. Courts Use a Deferential Standard of Review
ERISA denials are often reviewed under an “abuse of discretion” standard, meaning courts give weight to the insurer’s decision and will only overturn it if it was unreasonable. Regular claims are reviewed de novo, allowing the court to consider new evidence and make an independent judgment.
3. You Must Exhaust Internal Appeals First
Before you can sue under ERISA, you must exhaust all internal administrative remedies, meaning you must complete the insurer’s appeals process. This requirement does not apply to private policies, where you may file a lawsuit immediately after denial.
4. Discovery Is Severely Limited
ERISA litigation restricts the discovery process. Claimants typically cannot obtain additional documents or compel depositions beyond what is already in the administrative record. In contrast, state law allows broader discovery in regular insurance disputes.
5. No Right to a Jury Trial
ERISA claimants must have their cases decided by a federal judge, without a jury. State law claims involving private policies allow for jury trials, which can be more favorable for claimants—especially in cases of bad faith denial.
6. Damages Are Strictly Limited
In ERISA cases, damages are generally limited to the unpaid benefit amount only. You cannot recover punitive damages, emotional distress damages, or attorney’s fees unless specifically authorized. In regular life insurance disputes, punitive and compensatory damages may be available.
7. ERISA Preempts State Law
ERISA preempts most state law claims, including breach of contract, negligence, or insurance bad faith. This means ERISA claimants cannot sue under state law, whereas private policyholders can use both state statutory and common law claims to strengthen their case.
8. Only the Administrative Record Counts
Courts deciding ERISA cases usually only consider evidence that was in the record at the time of the claim and appeal. No new evidence may be introduced. In non-ERISA cases, new evidence—including expert opinions and witness testimony—is often allowed.
9. The Burden of Proof Is on the Claimant
In ERISA disputes, the claimant bears the burden of showing that the insurer abused its discretion. In contrast, insurers often bear the burden in state law cases to justify the denial of a valid claim.
10. Statutory Penalties Apply Under ERISA
If an ERISA plan administrator fails to follow required procedures or refuses to provide plan documents, courts may impose statutory penalties. These penalties do not exist in typical state-law governed life insurance cases.
Don’t Face ERISA Life Insurance Denials Alone
If your life insurance claim was denied and the policy was provided through your employer, you are likely dealing with an ERISA-governed claim. These are among the most complex cases to handle and require legal counsel who understands federal regulations, court precedent, and the nuances of administrative appeals. Our attorneys routinely reverse ERISA claim denials and have recovered life insurance benefits from plans provided by Hartford, Prudential, Lincoln Financial, Cigna, Voya, MetLife, and many others.
Frequently Asked Questions
What does it mean if my life insurance policy is governed by ERISA?
It means your policy was provided as part of an employer-sponsored benefits plan and is subject to federal ERISA regulations rather than state insurance laws.
How can I tell if my life insurance policy falls under ERISA?
If you obtained the policy through your job and it’s part of a broader benefits package, it’s likely governed by ERISA. A benefits summary or plan document should confirm this.
What is the first step after an ERISA life insurance denial?
You must file a timely internal appeal with the insurance company. This is a required step before you can take legal action.
Can I sue my employer if they mishandled my life insurance coverage?
Yes, under ERISA, employers and plan administrators have fiduciary duties. If they fail to enroll you properly or fail to provide conversion rights, you may have a claim against them.
Why can’t I sue for bad faith in an ERISA case?
ERISA preempts state laws that provide for bad faith damages. Your remedies are limited to the unpaid benefits and sometimes attorney’s fees or statutory penalties.
Do I have a right to a jury trial in an ERISA lawsuit?
No. ERISA cases are decided by a federal judge, and you cannot request a jury trial.
What if my claim involves both a group policy and a private policy?
You may have claims under both ERISA and state law. We handle multi-policy disputes and can help structure your case to maximize recovery.
Is it harder to win an ERISA life insurance appeal?
Yes, because of the limited evidence allowed and the deferential standard of review. Success requires detailed knowledge of ERISA law and how to build a compelling administrative record.
Can new evidence be submitted after the initial denial?
No, in ERISA cases, the court generally only considers evidence that was part of the administrative record during the claim and appeal stages.
How much do you charge to handle ERISA life insurance cases?
We work on a contingency fee basis, so there’s no upfront cost. We only get paid if we win your case. Contact us for a free consultation.