Procedures Important, Even in Denial (article)
ERISA sets forth specific claims and appeal rules to be followed by health and welfare benefit plans, as well as retirement plans. Accordingly, plans are required to provide written notice of claim denials to participants and beneficiaries, in clear, easily understood language, setting forth the specific reasons for the denial, together with information about how the individual could seek a full and fair review of the denied claim. The plan’s specific procedures, together with the relevant timeframes for processing claims and appeals, must be set forth in the plan document, as well as the summary plan description (SPD).
A recent case highlights the importance of providing adequate information to enable beneficiaries to exercise their rights under claims and appeals procedures. In Turner v. Volkswagen Grp. of Am., Inc., 2017 WL 3037803 (S.D. W. Va. 2017), an employee was covered under a group plan that included health, life and disability benefits. Following the covered employee/participant’s death, his surviving spouse sought the proceeds from the life insurance and long term disability benefits under the plan. While the employee/participant had received confirmation of coverage prior to his death, the insurer denied both the life and LTD benefits. Upon the spouse’s inquiry relating to denial of the group life benefit, she subsequently received a letter from the employer/plan sponsor stating that an appeal of the denial must be accomplished within 60 days of the denial, together with the plan’s SPD. The Court determined that the denial letter failed to reference the specific plan’s internal review procedures in the body of the denial letter and merely enclosing the SPD was insufficient notification to enable the spouse to timely file an appeal.
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