Insurance Claim Denials - Non ERISA Policies

Last week, we took a look at health insurance claim denials related to employer-sponsored insurance plans. This week, we’re going to examine non-ERISA plans. A non-ERISA plan is not subject to the stricter ERISA legal standards, but it is subject to state law.

Some examples of non-ERISA plans include health insurance offered by a church, local government agency, or under the Affordable Care Act (“Obamacare”) through the Health Insurance Marketplace. Since these policies are treated like private insurance policies offered in different contexts (for example, automobile and property insurance), different remedies are available to claimants than those insured by ERISA plans. If an insurance company fails to live up to the parties’ written agreement and denies health benefits unfairly, it may have acted in bad faith and opened the door to a tort lawsuit by the policyholder. Bad faith lawsuits are more similar to personal injury lawsuits than to breach-of-contract claims.

Reasons for non-ERISA health insurance claim denials can include:

Medical Necessity:

Health insurers require medical necessity before providing coverage or preauthorization for any procedure, treatment or medical supply. Adjusters can use medical necessity as a basis for denying any claim for coverage. Insurers, as we’ve noted in past posts, are in the business of maximizing profits - so claims are sometimes aggressively denied for reasons having nothing to do with a patient’s needs or well-being.

Non-Payment of Premiums:

The insurer might claim that you failed to make your premium payments or there was coverage lapse because you supposedly made a late payment. Retaining detailed payment records helps prevent this type of claim denial.

Lack of Coverage:

Claim adjusters often analyze claims seeking to find a reason for denial. The denial letter may claim that the circumstances of your doctor-recommended treatment for a health condition fall into one of the insurer’s exclusionary provisions. For instance, a particular treatment might be experimental and has not yet received FDA approval..

If you’ve received a letter denying your health insurance claim, contact us immediately. We can help you evaluate your options and, if necessary, take the insurance company to court on your behalf.