Updated: May 27, 2022
Most Americans get their health insurance through a group health plan provided by their employer or employee organization (a/ka/a employee welfare benefit plan), governed by the federal Employment Retirement and Income Security Act (ERISA). ERISA has specific requirements that, if overlooked, might prevent you from pursuing a lawsuit or affect the evidence you're allowed to use.
Exhaust Your Appeal Rights
Generally, you must exhaust your administrative appeal rights before filing a lawsuit. See e.g., Held v. Mfrs. Hanover Leasing Corp., 912 F.2d 1197, 1206 (10th Cir. 1990) (holding that exhausting administrative remedies is an "implicit prerequisite to seeking judicial relief").
Although there are some exceptions. See Jensen v. Solvay Chems., Inc., 520 F. Supp. 2d 1356, 1358 (D. Wyo. 2007) (reasoning that waiver of the requirement of administrative exhaustion may apply in breach of fiduciary cases). Administrative or internal appeal rights can have multiple levels. For example, your plan may require you to submit an appeal. If your first appeal is denied, you may be required to make a second appeal or take other action. If you fail to exercise all your appeal rights, your lawsuit might get dismissed. Although you're allowed to file a lawsuit after completing the appeals process, you risk running out of time before the limitations period. Because ERISA does not have a statute of limitations, most jurisdictions allow the insurer to set one, provided it's is not unreasonably short. Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 109, 134, S. Ct. 604, 612 (2013). Most insurers have three (3) year limitations period. If the plan does not provide a limitations period, then state law applies by default. In Oklahoma, the statute of limitations for written contracts is five (5) years.
Note: The Northern District of Illinois held that a plan administrator must notify a member in its denial letter of the date when the statute of limitations period would expire. Hewitt v. Liberty Mutual Insurance Co., Case No.1:18-cv-08235 6-7 (N.D. Ill. Feb. 2, 2021). This is now required under federal regulations. 29 C.F.R. 2560.503-1(j)(4)(ii)).
What to Submit with Your Appeal
When you submit an appeal, you should include all the relevant information and documents supporting your claim. If you fail to do so, you might not be allowed to present new evidence later. The Tenth Circuit held in Caldwell that the court will only review the administrative record relied upon by the plan administrator to determine entitlement of benefits. Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1282 (10th Cir. 2002). The administrative record is comprised of the information used to determine your claim for benefits. When you file a lawsuit the court focuses on whether the plan administrator's decision was reasonable. Weiss v. Banner Health, 846 F. App’x 636, 640 (10th Cir. 2021) (concluding that when a plan administrator has discretionary authority to determine plan benefits, the courts will uphold the decision so long as it was not "arbitrary and capricious.") Meaning, the court is concerned with whether there was a reasonable basis for denying your claim. However, if there was information available to you that you failed to submit with your appeal, and it was not otherwise reviewed by the plan administrator, then the court will likely disregard it. Therefore, you should make sure that you send everything relevant to your claim when you submit your appeal.
TIP: You can get copies of most plan documents on the SERFF Filing Acess page.
Make sure your appeal includes all the required information in a conspicuous place. Most insurers require you to provide certain details like your claim number, member ID, and other information. If you forget to put any of the required information, your appeal may not be considered properly submitted.
Submit all the documents or information you believe support your claim for benefits with your appeal. If you don't have the actual documents, you should refer to them and the specific provisions the best you can in your appeal. Note that you have the right to receive a copy of your plan documents. Many documents you'll want are typically available through an online member portal. You're not limited to just plan documents either. Plan administrators are supposed to consider all reasonably available information which may include medical records, doctor's notes, medical bills, etc.
Explain why you believe your claim should be covered. Use specific details and reference the part of the policy documents you think support your argument. You should also address the explanation you received from the insurer and why your claim was incorrectly decided.
Plan ahead. Be sure to give yourself plenty of time before the deadline. If your appeal is sent back to you because of an error, you'll need extra time to fix it and resubmit it.
Determine what appeal rights you have. You'll most likely be required to exhaust all your administrative rights before you're allowed to file a lawsuit.
Pay attention to deadlines and the statute of limitations so you don't inadvertently waive your rights.
When submitting an appeal, follow the directions provided by your insurer.
Give a thorough explanation for why your claim should not have been denied and why you're entitled to benefits.
Include any relevant information and supporting documents with your appeal.
Need more help?
Your appeal can be a defining factor in getting your claim covered. At Martuch Law, we will make sure your rights are protected. We thoroughly review each event and your plan documents to make sure you have the strongest, most persuasive appeal. Not sure where to start? We offer free, no-obligation consultations.
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