In Doe v. Deloitte LLP Grp. Ins. Plan, the Southern District of New York recently ruled for the plaintiff and gave insight into how important claim denial letters are in ERISA compliance. The court found:
The decision emphasizes the need for precision and compliance in communicating claim denials under ERISA. Group health plan sponsors must ensure that claim denial notices include all required information, such as specific reasons for the denial and references to applicable plan provisions, to mitigate the risk of litigation.
It’s group health plan’s duty to ensure the plan’s compliance, even when using third party administrators. Review the claim administrator’s letters to ensure compliance with ERISA.
Here’s what’s at stake if denial letters fall short of ERISA’s standard:
ERISA lays out strict claims procedures, spelling out exactly what denial letters must do. Here’s a quick checklist of what’s required:
The denial letter in this case didn’t meet these standards. Plus, the court found that the participant wasn’t given enough information to craft a meaningful appeal, which violates ERISA’s full and fair review requirement. For more information on benefits claims procedure regulation see the EBSA FAQ’s.
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