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What you need to know as an insurer to comply with ERISA

On Behalf of | Apr 22, 2021 | Insurance Law |

There are many different laws and rules that insurers must comply with to remain in good legal standing with both federal and state government agencies. The Employee Retirement Income Security Act of 1974 (ERISA) is one of those.

ERISA affords certain rights and protections to those who receive employee disability insurance through a group benefits plan — and failures to adhere to those rules can result in costly legal actions.

The rights of the insured under ERISA

ERISA affords insured parties a right to know why any of their claims were denied. They are entitled to request copies of written documents used to make those denial decisions at no personal cost.

Insured parties also have a right to appeal any insurance denials in either state or federal court, provided they meet any stated deadlines to do so. It’s not uncommon for insured parties to allege discrimination or misuse of plan funds when filing such lawsuits. 

Another reason why insured parties often file lawsuits in federal court against their health insurance companies is that the insurers fail to produce a copy of the plan documents or their latest annual report within the allotted 30-day turnaround time frame. The court may order plan administrators to produce those materials and pay the insured party who filed the complaint up to $110 per day until the insurance company complies. Plan administrators must produce evidence showing that a situation beyond their control prevented them from producing such documents to avoid this fee assessment.

How to respond to allegations of ERISA violations

It’s important that you’re aware of the many different laws and regulations that government officials expect you to abide by. An insurance defense attorney may be a good resource for this information and guidance for defending yourself against any allegations of impropriety. 


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