Blog

Contact Us for More Information

When Facing ERISA Litigation

Posted by Corey F. Schechter | Aug 25, 2017 | 0 Comments

Litigation

Dealing with complex federal regulations, like ERISA, is anything but simple. However, there are some important things for plan administrators, employers, and Plan Participants to know about when facing the possibility of ERISA litigation. When the potential for litigation over an ERISA plan arises, the first thing to do is talk to your experienced ERISA litigation lawyers to make sure you are protected.

Many disputes over employee benefits never make it to court. ERISA provides multiple levels to resolve claims before going through litigation. Initially, a dispute over benefits is generally handled directly with the insurance company or plan administrator. If the plan administrator or insurance company denies the employee's claim, the employee generally has to proceed through the plan's appeals process before they can seek relief in court.

During the plan's internal appeals process, the plan must comply with specific ERISA requirements in communicating with the plan participant. This includes providing a reason for why the plan made a decision or denied a claim. It also requires providing the participant with information regarding their rights to appeal the decision and when they can file a claim with the Department of Labor or take their claim to court.

After exhausting the administrative process, the employee may then be able to file a legal claim in federal court. This process between the internal review and court filing provides multiple ways for the plan to dismiss a claim. If the claimant files a lawsuit before exhausting the plan procedures, the plan provider may be able to seek a dismissal of the claimant's lawsuit. Additionally, if the plan's internal appeals deadline expires during the time it takes to dismiss the lawsuit, the claimant may be denied the right to have their claim reconsidered and be denied relief in court--hence the importance of the participant knowing and strictly following the Plan's administrative claim process and appeal procedures.

Deadlines are also important for benefit plan providers. ERISA provides timelines for claims and appeals. In many cases, the insurance plan may inform the claimant to seek an extension to provide a decision. However, this also requires the plan provider inform the claimant in writing that it needs an extension and give a legitimate reason for requiring an extension.

Before an administrative appeal or ERISA litigation, a plan participant may request information about the plan from the plan administrator. ERISA requires plan administrators to respond within a certain period of time to written information requests under penalty of fines. According to statute, an administrator who fails to comply with a written request for information within 30 days after the request may be personally liable to the plan participant for up to $110 per day.

Plan administrators often provide boilerplate responses when denying claims. While this boilerplate language may cover the plan in a majority of cases, administrators should review their standard procedures for responding to disputes to make sure they comply with ERISA requirements. This includes the entire process through making an initial claim decision through denying a final appeal. Failure to provide the necessary information within the required deadlines can result in a court overturning a denial of benefits and expose the plan and employer to additional liability.

If you have any questions about ERISA requirements or ERISA litigation, Butterfield Schechter LLP is here to help. We are San Diego's largest law firm with a concentration on employee benefits and ERISA compliance. Contact our office today.

About the Author

Corey F. Schechter

Corey Schechter practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Employment and Labor Law.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Retirement Plans

We help establish a customized plan that meets regulatory requirements as a tax qualified plan. Following implementation, our attorneys can assist clients and their plan administrator with regular reviews and updates to help with regulatory compliance for the plan's operation, and continued effectiveness in meeting the client's specific goals.

ESOPs

We are dedicated to employee ownership. When you come to us for ESOP services, you receive influential legal counsel who stand beside you to help you stay informed, in compliance, and abreast of the latest developments-all to help you realize your plan goals as fully and effectively as possible.

QDROs

A QDRO is a specially designed court order that is required for the division of retirement benefits in a family law case. Many family law attorneys do not possess the expertise necessary to divide retirement benefits or stock options upon divorce. We have extensive experience in dividing qualified plans, government plans, IRAs and stock options between the employee spouse and non-employee spouse.

Butterfield Schechter LLP provides the information in this website as a service to its clients and visitors to the site. This website is for information purposes only and is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information in this website is provided "as is," and while the information in this website is updated periodically, additional facts or future developments may affect subjects contained herein, and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form, or information in this web site. To ensure compliance with the requirements imposed by the United States Treasury and the Internal Revenue Service, we inform you that any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another person any transaction or matter addressed herein. Butterfield Schechter LLP has endeavored to comply with all known legal and ethical requirements in compiling this website. In the event that this communication does not conform with any laws or regulations of any state or country in which it may be received, Butterfield Schechter LLP will not accept legal representation based on this communication from a person in such a state or country. Electronic mail is provided as a convenience in communicating with the attorneys at Butterfield Schechter LLP. Contact by e-mail does not alone create an attorney-client relationship. Please remember Internet e-mail is not secure and messages sent to the firm or any of its employees or attorneys should not contain sensitive or confidential information. Thank you for visiting our site.

Menu