Monday, February 22, 2010

Making a Federal Case out of Employer-sponsored Benefits Disputes

Wade Coye, Insurance Lawyer
The fight to provide more health care coverage for Americans has sparked debate in all parts of the country. The issue is complex and goes beyond tax payer costs or quality of care. Nationalized health care raises many legal issues as well.

How Can a Benefit Be a Burden?

It can be an exciting thing to get a new job, especially in our country's current economy. When a person finds out that their new job provides health insurance benefits under an employer-sponsored plan, they think that concerns over health care costs have been lifted from their shoulders. But what happens if the plan precludes coverage for certain areas or the language is confusing? While it may save employees money in some circumstances, employer-sponsored health care plans can create expensive, federal-level legal disputes that can end up costing you more money than you're saving.

Employers are not obligated to offer group health insurance plans. If they do, the plans are regulated under federal law, specifically the Employee Retirement Income Security Act or ERISA. ERISA excludes employees of state or local government entities, religious groups, and some unions. Some states have laws governing employer health care as well.

Self-funded vs. Insured Health Care

The health care plans offered by employers may be self-funded or insured. If employers do not purchase insurance for their employees, but instead pay for health care costs themselves, then the plan offered to employees is said to be "self-funded." This is a risky practice, particularly when the employer faces financial trouble. Insured health care plans are offered when employers buy an insurance policy for their group of employees. Which one do you think is more likely to create disputes? If an employee has a problem with the benefits they are receiving--or they are receiving none at all--they have certain options when it comes to fighting the decisions.

If your coverage, even routine care such as prescriptions or preventative doctors exams, is disputed and your plan is insured, your right to appeal the decision to the insurance company's review board is governed by ERISA. ERISA dictates the process of internal appeals in self-funded plans as well, but that is where the government's assistance ends. If your appeal is denied, you have the option to file a lawsuit in federal district court. Our firm sees these cases often and we know the heart-wrenching circumstances that come with the frustration of benefit denial. This is when you need a lawyer. This is when your small insurance dispute can become a state or federal case. Call the Coye Law Firm to speak with a compassionate, experienced attorney who can address your specific questions regarding employer-sponsored health insurance benefits.

If your claim reaches court, a judge often just reviews the terms of your employer-sponsored health care plan and decides whether or not the decision to deny benefits fits into the rules outlined. They cannot take over a decision on your health care benefits, but instead only decide on whether or not the decision matches the terms of your plan. Even if he or she rules in your favor, there is no obligation for the employer or insurance carrier to pay your attorney's fees. You may end up paying more to win your case than the cost of the original benefits that you need to collect.

A Federal Case out of Health Care

The discussion about nationalized health care is different for many people. Consumers tend to focus on the costs and delivery of health care, while legal professionals are considering what the new system would mean for the appeals process and number of law suits. Consumers will have to spend more money to defend their right to insurance coverage and attorneys will have to fight to get their fees covered. Courts rule in favor of employers often, which can prevent employees from receiving care they need. If health care is nationalized, then more disputes will be turned into "federal cases," creating a financial and time-consuming headache for many employees who are being denied health care coverage.

The Bottom Line...

Any insurance plan needs to be thoroughly reviewed before you know you'll need to use it. If an employee suffers a broken leg on vacation, and finds out too late that their health insurance plan will do nothing to protect them because of some small clause or loop-hole, he or she does not want to find this out while lying in a very expensive hospital bed. No one wants to get tangled up in legal disputes, especially when they're recovering from an injury or illness. If you're in the middle of a battle with your health insurer, call our firm today.