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Adverse Benefit Determinations Under ERISA

Tue Jul 24th, 2018 on     Insurance Claims,    

The Employee Retirement Income Security Act (ERISA) established certain standards for qualifying plans — more specifically, for private employee benefit plans — that are intended to protect employee-claimants from abuse, mismanagement, and various other concerns commonly encountered in the insurance dispute context.  Over the years, ERISA has been expanded quite substantially.  If your insurance plan is governed by ERISA regulation, you may be entitled to notification and the opportunity to appeal an adverse decision relating to your benefits.

What is an Adverse Benefit Determination?

Pursuant to existing ERISA regulation, an “adverse benefit determination” is any decision by the insurer that involves the denial, reduction, or termination of an insurance benefit.

For example, if your insurer chooses to reduce your benefits on the basis of improvements in your disabling condition, then that would almost certainly constitute an adverse benefit determination.

Adverse benefit determinations afford the claimant certain rights necessary to protect their interests.  When an insurer (plan covered by ERISA) makes an adverse benefit determination, they must provide adequate notice of the decision.  Further, the claimant must be given the opportunity to appeal within 180 days of the adverse benefit determination at-issue.  This 180-day rule gives the claimant a significant time period with which to secure qualified legal assistance and challenge the insurer’s decision.

Insurance Plan Administrator Must Give a Reasonable Basis for the Determination

Discretionary authority of insurers in ERISA-covered plans is limited.  Any and all adverse benefit determinations must be accompanied by an explanation that gives a reasonable basis for the insurer’s decision.  This explanation must be sufficiently specific — it is not enough, for example, to cite an regulation or guideline that may have contributed to the insurer’s adverse benefit determination.  When referencing regulation, the insurance plan administrator must specify the particular regulations/rules/guidelines that led to their decision.

Statements in support of the determination may suffice (to justify an adverse benefit determination), but those statements must also be specific in nature.  General, vague statements are not satisfactory.

Speak to an Experienced Team of Miami Insurance Law Attorneys for Guidance

If your benefits plan is governed by ERISA, then you may be afforded certain rights in accordance with such regulation — these include the right to sufficient notice of an adverse benefit determination, as well as the right to challenge the determination itself.  Challenging an adverse benefit determination isn’t easy, however.  In fact, you’ll want to work with an attorney that has extensive experience litigating claims against insurers in cases involving ERISA-covered plans.

Here at Ver Ploeg & Lumpkin, P.A., our attorneys have over two decades of experience representing policyholder-claimants in disputes with their insurers, including cases that involve ERISA-covered plans.  Unlike many other insurance law firms, we are well-equipped to handle the unique complexities of an ERISA dispute — we have a consistent track record of success in handling such disputes.

Interested in learning more?  Call (305) 577-3996 today to get connected to our skilled Miami insurance law attorneys for further guidance.  We will evaluate your dispute and help you move forward with litigation.

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