ERISA Claim: Are You Covered?

Most of us have a general idea of what ERISA, the Employee Retirement Income Security Act, is all about. However, knowing whether a specific claim is covered is another story. ERISA has continually confused employers, employees and attorneys alike. So, how do you know whether your claim is covered under the Act?

What is the source of the benefit?

Employees will generally know if their claim falls under ERISA by looking at the source of the benefit, according to Ron Dean, a California attorney who has been engaged in employee benefits litigation primarily on behalf of participants for over 30 years. He explained, “If the “benefit” is provided through your employer, it’s a good bet your claim is covered by ERISA, even if you pay the whole premium. There are exceptions, such as if your employer is a government entity, or a church or church sponsored entity, of if your employer has no real involvement in the administration of the benefit.”

Summary plan descriptions

According to the U.S. Department of Labor, the summary plan description (SPD) is an important document that tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when and in what form benefits are paid and how to file a claim for benefits.

However, according to Dean, usually it’s the only document you get. He explained, “ERISA says that you’re supposed to be given a summary of the Plan. Sadly, most courts also say that the company can still enforce certain terms even if the summary doesn’t tell you about them. Even if the summary tells you the rule is one thing and the Plan says it’s another thing, some courts still hold that the Plan controls. So, if you’re planning a big decision based on what’s in the Summary, you’d better get a copy of the full Plan document as well before deciding.”

The limitations of ERISA claims

There is a very big difference between an ERISA claim and a general insurance bad faith claim. Dean continued, “In a general insurance claim or even a bad faith claim, you’re entitled to have your claim heard by a jury of your peers, your claim considered without a thumb on either side of the scale of justice and you can recover all your damages, including punitive damages. In an ERISA claim, you don’t get a jury, you get a short hearing based on a paper record, and the thumb of the law is placed heavily on the insurance company’s side of the scales of justice.”

Balancing that scale is not impossible. If you’ve been denied valid benefits that are subject to ERISA, contact an attorney whose practice focuses in this area of the law. Consultations are free, without obligation and are strictly confidential. To contact a qualified attorney to discuss your situation, please click here. We may be able to help.