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What is an "Adverse Benefit Decision" Under ERISA?

An Adverse Benefit Decision is anything less than full payment for the rest of the claim. Did your disability insurance company deny or terminate your benefits? Are they paying you less than the policy says they should? Are they saying that your benefits are limited for any reason? Any time a claimant tells the insurance company that they should be receiving more money and the insurance company says no, then that is an adverse benefit decision.

The Most Important Factor to Understand if There is an "Adverse Benefit Decision" on Your Claim

Whether the insurance company is ultimately right or wrong doesn't matter. The fact that they issued an adverse benefit decision gives you important rights. Most importantly, you now have free access to the information the insurance company used to make the decision. this is called your "claim file." The catch? You have to ask for it, and you should put your request in writing to your claim manager at the disability insurance company.

BUT, here is why you should always at least talk to a lawyer: whether out of laziness or ignorance, your claim manager might say you do NOT have the right to your claim file. BenGlassLaw is currently dealing with a case where the insurance company wrongly refused to give the claimant access to her claim file, saying that since she had already submitted her appeal (without talking to us first, the day after her claim was denied, thinking this was all just a big misunderstanding that could quickly be cleared up), they could no longer give her the claim file. That's just wrong-the law says you have a right to that information after an adverse benefit determination-period. It doesn't matter when in the process you ask for it (though of course, the sooner you have it, the better your appeal in response can be). The insurance company simply cannot deny access to information that you, the claimant, legally have the right to receive and analyze. Bottom line: if the insurance company issues an adverse benefit determination, ERISA law says you have the right to understand their decision-making process by collecting and reading your claim file. If someone tells you differently, call us!

Once you get the claim file, then what? They can be hard to review. The insurance company is required to include everything they considered in making their decision, and they are not shy about including it in triplicate! We are used to seeing claim files that are thousands of pages for claims that have lasted for years. It's hard to know what might be missing, but you have to try to follow the trail of claim file notes to understand what information the insurance company had when they made their adverse benefit determination and why it wasn't good enough. That's the only way you can know what you must include for an effective appeal.

What is the Insurance Company Required to Tell You

  • WHO reviewed your medical records (to include both insurance company employees and any outside "experts" they consulted with)
  • WHAT they thought was important in the records
  • WHY they chose to deny or terminate your claim
  • HOW you could appeal their decision

Why is it Important to Appeal an "Adverse Benefit Decision?"

If the insurance company denies or terminates your disability claim, you’d probably like to tell an impartial judge all about why they were wrong – right? You can, but only if you give the insurance company another chance to review your claim first. This is called an appeal, and you MUST submit one within 180 days of receiving that adverse benefit decision. You simply cannot skip the appeal. If you do, you also forfeit your right to file a lawsuit.

If the claimant misses the 180-day appeal mark, then the claim is officially done. The claimant can no longer fight to receive benefits, no exceptions. That’s ERISA for you.

Common Appeal Mistakes for "Adverse Benefit Decisions"

A lot of claimants make the mistake of "appealing" the decision by either sending a letter that says, "I appeal," or by having their doctor send a letter that says something along the lines of, "I have been Mary’s doctor for a long time, she is really sick, there’s no way she can work, so she is disabled."  

  • Insurance companies do not listen to “sob stories.” You can’t appeal to their heart – they don’t have one. The only thing they look at is the policy language, and if they can use that to justify denying benefits, they will. If you can’t be objective about your condition, call us – we know how to present your medical records in a way the insurance company will “get.” That includes working with your doctor to clarify specific restrictions and limitations instead of leaving it at “he’s really sick, he cannot work.” (That just sounds like “claim denied” to an insurance company.)
  • Insurance companies only listen to medical records and physician opinions that directly address the reasons why they denied or terminated your claim. This gets complicated, but if the insurance company denied your claim because they said you could sit for 6-8 hours per day, you won’t win an appeal by proving to them that you have difficulty standing and walking.
  • Using a lawyer who does not know ERISA can kill your claim. All disability attorneys are not created equal, and you should consult with an ERISA-trained attorney before moving forward with an appeal. Many Social Security Disability attorneys are great at navigating the Social Security Administration system but know nothing about ERISA. But they and their client think, “Hey, it’s a disability claim, how different could it be?” It’s really different in some important ways, and as a result, we see sadly non-ERISA attorneys investing huge sums of YOUR money in securing expert witness testimony (when often a simple letter from your doctor will do just fine) and writing complex appeals that never even address the ONLY THING the insurance company wants to know: why can’t you work? 

How Can BenGlassLaw Help With Your Appeal?

An adverse benefit determination throws your world into disarray. We get it. At BenGlassLaw, we look at denial letters from all over the country all day long for free.

Ben Glass
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Ben Glass is a nationally recognized car accident and ERISA disability attorney in Fairfax, VA.