An American Tragedy

Act 1:
A young parent secures a reasonably well-paying job with good benefits. In truth, because the family is young and dependent on her income, the fringe benefits are a significant factor in the decision to take the job. The new job holder feels secure in the knowledge that the job will pay enough to make ends meet and maybe even save a little, will take care of the medical bills when any family member is sick, and will pay benefits if she becomes disabled.

Act 2:
During the next few years, as the children grow, there are the inevitable illnesses and accidents, and while they may exact a toll, at least the medical bills are covered. But, then, occasionally, the insurance company will deny a claim for medical expense. The denial may be based on lack of medical necessity or a claim that the treatment is experimental. Or maybe a family member needs surgery. The insurance company may want a second opinion - and the second opinion agrees with the first. They are told that everything will be covered, after meeting their deductible and co-pays.

Paying the deductibles and co-pays may create a strain, but the family has stewarded its resources carefully and there are savings that will cover them. The surgery is believed to be a complete success and the patient is on the road to complete recovery.

Then the bills start coming in. The patient then discovers that the anesthesiologist was not “in network”. The insurer will pay only 10% of his bill. The bill is nearly $3,000, and the family must pay 90% of that. A second surgeon was on standby during the surgery and his bill is not covered; the family must pay that.

These extra bills create problems, what with the co-pays and deductibles that they have already had to pay. But, they weather the storm.

The good feeling of knowing that the family will be taken care of if something happens to the bread-winner begins to fade, to be replaced by worry. What if something really serious occurs?

Act 3:
The patient takes a turn for the worse. It turns out that the surgery wasn’t a complete success, and that the road to recovery may be somewhat longer than was first thought. But, thank heaven the patient works for a company that provides good benefits. If she is off work due to an injury or illness, the company has a salary continuation plan that pays full salary for up to 90 days. Then, if she is still unable to work, she will receive disability insurance benefits.

During the first 90 days the patient finds out that she is not going to be unable to work for much longer than 90 days. A nice lady in the Employer’s HR department gives her the forms to fill out to apply for disability insurance, and maybe even helps her fill them out. She gets them filled out as soon as she can so that there will be no delay the transition between her employer’s salary continuation plan and the disability benefits.

After submitting the application for disability benefits she receives a form letter from the insurance company that tells her that they are investigating her claim. They tell her that her claim is governed by ERISA, and that they will decide her eligibility within 45 days unless they need more time, and then they can take an additional 30 days to decide.

When the salary continuation payments are about to end, our young mother begins to panic. The family’s savings are depleted and she has heard nothing more from the disability insurance company. After navigating through the complicated telephone menu, she gets the voice mail of the person who she believes can give her information about her claim. This may be repeated every day for several days, but finally she speaks to a human. She is told that they are very near a decision and that she will hear from them shortly.

Act 4:
Ninety days go by and still not word. Voice mail messages go unanswered. The salary continuation has ended and either there is no income or the family has to depend on the income of only one parent while its expenses are based on the combined incomes of both parents.

Finally, she gets a letter from the insurance company. But the news is not good. The letter says that the insurer has had her medical records examined by independent physicians. These physicians have concluded that although she does have a verifiable medical condition, it does not prevent her from working. Therefore, the insurance company has decided that she is not entitled to disability benefits.

The letter also tells her that she has appeal rights. She can appeal the decision withing 180 days, and she can include with her appeal any additional information that she wants the insurer to consider. She doesn’t have any idea what additional information she needs to include. So, she sends a letter to the insurance company telling them that she appeals their decision.

The insurer has the records examined by other “independent” doctors and sends her a letter telling her that the new doctors agree with the original decision to deny benefits and that they are affirming their original decision. The letter also tells her that the decision is final and if she still disagrees with it the only thing she can do is to file a law suit in federal court.

Act 5:
Filing a suit in federal court is not something our disability claimant can do by herself. She knows she needs a lawyer. There is a nice lawyer who is a member of her church who recently drafted wills for her and her husband, so she calls and makes an appointment with him.

Now the reality of ERISA becomes apparent. This lawyer explains to her that ERISA is the Employee Income Security Act. That under this law, the claims file generated by the insurance company is the only thing a court will look at if she files a suit. She cannot file a suit and tell her story to a jury. She cannot call witnesses to testify. He tells her that hardly anyone ever wins an ERISA case, and that he doesn’t handle them. If she is lucky, this attorney will refer her to an experienced ERISA attorney. Unfortunately, many lawyers who do not routinely handle ERISA cases will either try to handle one or will not know any lawyers to refer her to and tell her that she doesn’t have any chance to win.

Act 6:
This claimant is one of the lucky ones. She manages to find her way to a lawyer experienced in handling ERISA claims. She meets with the ERISA lawyer who tells her that although ERISA claims are difficult, they are not altogether hopeless. There are ways in some cases to get around the harsh rules imposed by courts in ERISA litigation. There are no guarantees , but this lawyer thinks she has a fighting chance to win and agrees to take her case.


Unfortunately, the above scenario is not a rare occurrence – it happens many times every day. The insurance companies and plan administrators have the upper hand. They know the way in and through the ERISA maze; a journey full of traps for the unwary. But there are lawyers who have discovered ways to help claimants navigate these difficult waters.

Want to know more?

What can an ERISA lawyer do for me?

Roadmap of an ERISA suit

What is Life Insurance?

What is the ERISA Benefits Law Group?

Recent Developments in ERISA



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