Monday, April 21, 2008

The Truth About The ERISA Law

ERISA or Employee Retirement Income Security Act of 1974 was originally designed to control corruption in pension plans. Although it was not designed to be a measure for controlling medical and disability insurance plan, ERISA now controls most employee benefits plan including health, disability, and life insurance plans.
ERISA works best in people who have been denied short-term or long-term disability. This is covered by “Statute of Limitations” which means that you will forfeit your chance to make an appeal if you fail to file it within the allotted time period. Under this Act, you will be given sixty days to make an appeal.
When you lose an appeal and your insurance plan falls under ERISA, your only choice is to file an administrative appeal in a federal court. Like regular cases, the fee is on a contingency basis.
One setback of ERISA is that does not hold insurance companies liable for any unfair of fraudulent practices. When ERISA is enforced, all other claims are pre-empted so you cannot claim for any punitive damages. The only thing that the claimant can recover is the benefits past due, cost of interest, or attorney’s fees.
In my opinion, the ERISA Law benefits the insurance companies and not the claimants. When you file an administrative appeal, there is no trial by jury instead the judge will only look at the administrative records. The implementation of the ERISA Law aimed at pre-empting future ordinances on health and insurance plans. This was the case in Maryland, New York, and San Francisco, where health and insurance ordinances were pre-empted by the ERISA ruling.