As a safeguard against the unknown, many individuals elect to carry employee-sponsored health care and retirement benefits. When something happens resulting in a claim, plan holders expect the insurance carrier to follow through on promised coverage.

But the claimant and the insurance company may have widely different ideas of what adequate coverage of a claim looks like or the insurer could deny the claim completely. When an insurance company elects to deny a claim, they must comply with ERISA claim denial regulations established by the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor.

Procedural safeguards to protect consumers

The EBSA regulations for how insurers accept, deny and process claims help to protect the individual consumers who purchase the plans. If an insurer chooses to deny a claim, they must provide detailed information regarding the reasons for the denial in writing, either via a letter or through electronic communication.

What information should a denial letter include?

For claims initiated after January 1, 2018, required claim denial information includes:

  • The specific reason for the denial and the standards the insurer used to determine eligibility or a statement that no criteria were used in the determination
  • An explanation of the plan’s provisions on which they based the denial
  • A summary of additional information the plan holder could provide that might persuade the insurer to reconsider the denial
  • Information about how to file an appeal for denied claims, including how to file an external appeal for non-grandfathered plans
  • Culturally and linguistically appropriate information for plan holders who live in a parish where more than 10% of the population is literate in a non-English language, such as Spanish

Remember, if your insurer chooses to deny your claim, they must clearly explain the reason(s) for the denial and the next steps you can take.