You have applied for benefits under an employee benefit plan and you have received a letter from the insurance company or plan administrator informing you that your application for benefits is denied. Whether you are applying for disability, life, health or other benefits the letter advises you that you have a right to an administrative appeal or review of your claim. This article is about that process – what is an administrative appeal or administrative review; what are your rights and obligations; and generally how should you approach this process.
The administrative appeal/review is your opportunity to convince the insurer/administrator that you are entitled to benefits without having to file a lawsuit. Most people’s knee-jerk reaction when they receive the denial letter is to immediately request an appeal, sending a letter to the insurance company telling them how wrong its determination was, that they truly are disabled, and that their doctor has already advised them of that fact. As you will see below, this is the wrong approach to take.
You have certain rights and obligations under the employee benefit plan and the laws regulating these plans. You have a right to a “full and fair review” of your claim by the claims administrator. Part of the entitlement to a full and fair review includes the right to examine all documents relied upon or reviewed by the plan in denying your benefits and an opportunity to respond to those documents. Thus, your first step is to obtain those documents. Write to the adjuster and request a copy of the entire administrative file (claims file). The file contains all the communications and internal memos on your claim, the insurance carrier’s physicians, vocational consultants, nurses and others’ opinions and reports regarding your claim, not to mention all of your medical records. These documents must be provided to you within 30 days at no cost to you. Once you receive this file, then you will know what the claims administrator does and does not have which becomes important when it comes to deciding what additional documents should be submitted to the claims administrator.
In addition to the administrative file you should also obtain a copy of the Plan itself, which may be in the form of an insurance policy, a summary plan description (SPD), or an employee handbook. These documents define the specific contractual obligations of the Plan and its participants. Thus if you are looking for the definition of “disability” or “pre-existing condition” it will be in the Plan.
Another aspect to your entitlement to a “full and fair review” is the obligation by the Plan to tell you (1) the specific reasons for the denial; (2) reference the plan provisions on which the denial is based; (3) a description of any additional material or information necessary for you to perfect your claim, and an explanation of why such material or information is necessary; and (4) the steps you need to take in order to submit your claim for appeal or review. Thus, if you look at your denial letter closely you will discover the Administrator’s reasons for denying your claim and what additional information you need to present in order to get your claim approved.
Typically, you are given 180 days from the receipt of the denial letter in which to submit an administrative appeal. There is no rush in submitting the appeal. You should take advantage of this opportunity to fully document your claim. If you are unsuccessful in the appeal process, then your only option is filing suit against the Plan. The court in reviewing your case is generally limited to reviewing the evidence contained in the administrative file. If your evidence was not put into the file during the administrative process the court will generally not consider it.
What you should submit differs depending on the facts of your claim. This is the point in your claim where I highly recommend that you contact an attorney experienced in handling ERISA or employee benefit claims to at least discuss your options. If your claim is denied after the appeal process is concluded then your only option thereafter is litigation. If you have not contacted an attorney before you have exhausted your administrative remedies you are at a tremendous disadvantage.