If your company does not carry Texas Workers’ Compensation but has its own occupational injury plan to cover work injuries then that plan is covered by the Employment Retirement Insurance and Security ACt (ERISA). This is a federal law that it supposed to regulate these plans to protect injured workers’ from your companies denial of benefits. However, this law has been interpreted by Federal Courts so as to actually protect your employer to help them deny your claims for benefits. In this post I will cover in general how ERISA works and what steps you must take if you desire to appeal the denial of benefits by your employer (or its insurance company). Under ERISA Some employee welfare benefit plans may require you to file a claim or notify the plan administrator immediately when you enter a hospital or see a doctor. Some plans may require that you pay a medical bill and the plan will repay you when it is presented with a copy of the bill marked “paid.” However, most Occupational Injury Plans will actually direct which doctor you have to see for your on the job injury.
But be sure to contact your plan administrator or other plan official for complete information on filing a claim for your benefits. You probably won’t get good information, you really need to read the plan booklet (which they are required to provide to you upon request) for the details of how to make a claim.
What do you do when your on the job injury claim is denied.
Within 90 days after you have filed a claim for benefits, your plan must tell you whether or not you will receive the benefits. Also, if because of special circumstances your plan needs more time to examine your request, it must tell you within the 90 days that additional time is needed, why it is needed and the date by which the plan expects to render a final decision. If your claim is denied, the plan administrator must notify you in writing and explain in detail why it was denied. If you receive no answer at all in 90 days – or 180 days when an extension of time was needed – the claim is considered a denial and you can use the plan’s rules for appealing the denial.
When you have been notified that your claim has been denied, your plan administrator also must tell you how to submit your denied claim for a full and fair review. You have at least 60 days (the plan may provide you with more time) in which to do this. Be sure to include all related information, particularly any additional information or evidence, and get it to the specified person and address. Usually this is a letter you receive that attempts to justify the denial of your claim. Often times the letter will include information such as an out of town doctor has reviewed your claim and has determined that your injury was not work related but was a preexisting condition. There are many ways that your employer (through the plan administrator) can deny your claim. They can say you did not report it timely, you have run out of benefits; there are many reasons that your employer will attempt to justify denying your benefits for your on the on job injury. However the two biggest are the injury was preexisting (caused by arthritis, another injury) or that it is not in the course and scope of your employment (your employer claims it happened at your home).
Once your claim is denied, this is where the appeal starts.
This is where most employees make their mistake!
This is your only real chance to present your documentation for your appeal. This is the stage where you must gather all your evidence and present it to your employer (claims administrator) for why your claim is legitimate!. What does this mean? This is where you need to gather your evidence, usually your medical records written statements or any other evidence that your claim is legitimate. Unfortunately for most injured workers they simply send in a letter saying they want to appeal and think the denials unfair. They nearly always fail to provide the evidence to prove up their claim. If they don’t put forth additional evidence to prove their claim then the denial will nearly always stand. I am convinced that employers (and claims administers) count on employees failure to prove up their claims so they can justify denying claims. They understand this process very well and use the injured workers’ lack of knowledge to their benefit. With that said, even if you prove up your claim on appeal your odds of winning are still very slim. (It has been my experience that if you do prove up your claim your employer is more likely to be concerned that you will hire a lawyer and is more likely to at least approve some additional treatment – so filing a proper and well proved-up appeal can sometimes work to your advantage even though you are ultimately very unlikely to win the appeal). your employer must give you at least 60 days to appeal and tell you how to submit your appeal. It is supposed to be a “fair review”, but as you will see below it is anything but a “fair hearing”.
How is your Appeal Reviewed?
You would think that if your are appealing your employers’ denial of benefits you would think that you would appeal the claim to a neutral judge who had no interest in the outcome. But this not the case, your employer (through the plan administrator) decides if you win the appeal. Your employer is in essence the judge, jury and executioner when it comes to Occupational Injury Plans for injured workers. If review of your appeal is going to take longer than 60 days, you must be notified in writing of the delay. Except where the review is made by a committee or board of trustees which meets at least quarterly, a decision on your appeal must be made within 120 days of your appeal.
Once the final decision has been made, you must be told the reason and the plan rules upon which the decision was based. This explanation must be written in a manner that you can understand. If you do not receive a notice within the waiting time, you can assume that your claim has been denied after it was reviewed. (As you can see, both with the original claim and with the appeal if you don’t received a notice within the waiting time the assumption is that your claim is denied, not granted).
In general, you must follow the steps of appeal set forth by your employer before you can appeal you claim to Federal Court.
NEXT STEP: APPEAL TO FEDERAL COURT
Assuming the appropriate plan language is present in the Occupational Injury Plan Document (which it will almost certainly have) to grant full discretion to determine eligibility and/or to interpret plan provisions, the arbitrary and capricious standard is what the federal judge uses to determine if your benefits should be denied. Under this standard the employers decision to deny you benefits will be upheld unless it was arbitrary, capricious, or made in bad faith not supported by substantial evidence. This standard has been equated to one which affirms the employers decision unless “totally unreasonable, whimsical random or unseasoned or downright unreasonable. Do not forget that the appeal documents that you submitted when your claim was denied is the only evidence that the federal judge can review in deciding your case. Generally you can’t submit new evidence to the federal judge.
Can you change the standard of review from arbitrary and capricious to allow the federal judge to submit his or her own judgment over whether the benefits should have been denied? Yes, it can happen but it is very difficult to do you have to show examples where there is a conflict of interest between the benefit plan administrator and the insurance company (where they wear both hats). Some examples are:
- the claims reviewer (administrator) gives inconsistent reasons for denying benefits
- a change in position without receipt of any new evidence
- reliance on an improper definition of disability
- determination of a material fact for which no supporting evidence is provided
- failure to provide reasons for denial of benefits
- failure to provide sufficient notice of the denial of the claim
- the record as a whole suggests that the claims reviewer acted as an adversary bent on denying the claim and oblivious to fiduciary obligations (as a plan administrator) to look out for your best interests.
In El Paso, Texas we fall under the 5th Cir. Court of appeals which hears all appeals from our El Paso, Texas Federal Courts. The 5th Cir. has held that” We [Federal Court Judges] will affirm a plan administrator’s determination to deny benefits if it is “supported by substantial evidence and is not arbitrary or capricious”.
What does this mean for you!
Most cases go out of their way to uphold the denial of your benefits. Because of this it is almost impossible to find an attorney to take on your case of the denial of benefits. It is expensive to go to Federal Court to fight these denials and the odds of winning are extremely low. Lawyers who take these cases on a contingency can theoretically get attorneys fees; but with the odds of winning so low they will rarely do so. Also because there is a low winning percentage there are very few attorneys who have the expertise to take on these claims.
Do you have other options?
Yes!! You may still be able to bring a claim under state law. If your employer does not have Texas Workers Compensation; they can be sued in a State Court under State law if you can prove your injury was caused by the negligence of your employer or a co-employee. If you were not provided proper training or safe workplace you may have a claim. It is extremely important that you seek legal help from a competent employment lawyer immediately to see if you have a valid claim. In general you must bring your claim within two years of your injury, but some employers have arbitration agreements that have provisions that may force you to file a claim in a much shorter time (6 months for example). Also a competent employment lawyer may be able help you with other employment laws that can protect you. For example you may have rights under the Family Medical Leave Act (FMLA) and the Americans With Disabilities Act (ADA) and maybe even the Age Discrimination in Employment Act (ADEA). So if you are denied benefits from your employer; go seek legal representation quickly because even if your rights under ERISA are difficult to obtain there may be other options for you! Remember, the largest employer, Wal-Mart, does not have Texas Workers’ Compensation but has its own Occupation Injury Plan under ERISA — Many trucking companies have their own plans as well. At least 1/3 of all employers are non-subscribers to Texas Workers’ Compensation with even a higher percentage in the El Paso, Texas area — so if you are injured go seek legal help from a board certified employment lawyer as soon as possible!