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The Employee Retirement Income Security Act of 1974 (“ERISA”) protects the interests of employees, or former employees, and their beneficiaries when they participate in the retirement and welfare benefit plans offered by employers. Approximately 59 percent of workers in America receive health benefits through their employer and about 54 percent receive retirement benefits. In 2013, ERISA in total encompassed about 684,000 retirement plans, 2.4 million health plans and 2.4 million additional welfare benefit plans. Thus, ERISA protects around 141 million workers and beneficiaries, and more than $7.6 trillion in assets. (Data from the Employee Benefits Security Administration of the U.S. Department of Labor).
The Act mandates certain requirements of employers, including but not limited to: providing certain information concerning their plans to those employees who opt in, a minimum standard of conduct for plan managers/fiduciaries, certain enforcement provisions to ensure that plan funds are protected, and assuring that qualified participants receive their benefits even if a company goes bankrupt. Participants must also be properly informed on how to file a claim for benefits and must be notified if any significant changes will be made to their plans.
Additionally, the Act requires that employers make participants aware of what standards they must meet for their benefits to be assured to them in the future. For example, employers must notify participants about their option to convert their policy from the group policy offered by the employer to an individual policy if the employee is terminated, laid off or retiring. Failure to notify an employee of this conversion option is a common mistake made by the employer or plan manager, which can lead to an individual unlawfully losing their policy.
Despite a policyholder paying their monthly premiums for their life insurance, his or her beneficiaries can be denied payment if the insurer claims there was a misrepresentation, or that the injury or death that occurred was self-inflicted.
Further, the insurance companies will sometimes cancel a policy retroactively to avoid payout of a claim, or will look for other ways to contest coverage, depriving a beneficiary of the death benefits under the policy. When an insurance company denies benefits under such circumstances, the beneficiaries often feel as though this denial is the end of the road.
This can lead to years passing before a beneficiary seeks help from an expert, such as one of the attorneys at the Boonswang Law Firm. Although there is a time limit on when a beneficiary may appeal these denials due to a Statute of Limitations, gaining new information regarding your claim by consulting an expert can “reset the clock” due to acquiring new facts necessary to understanding that a claim exists. These denials frequently occur in the 2-year period of the date that the policy was put in force due to the “contestability clause” contained in almost all life insurance policies. This clause allows the companies the right to investigate any death related claims that occur within the first two years of the policy. The burden, however, to prove any such allegations used to deny coverage lies on the insurance company, which is often a difficult burden to meet.
The Boonswang Law Firm has been successful in representing beneficiaries in these cases because employers often fail to fulfill their duties to their employees/former employees after the employee leaves their job. Careful analysis and application of ERISA to these cases has led us to catching the errors of the insurance companies, their agents, or the insured’s employer, allowing us to make significant recoveries for our clients.
A few of the most common mistakes made by these actors include the failure to properly notify the insured of changes to their plan, failure to fully inform the insured of the features of their plan, failure to comply with state notice laws and breach of fiduciary duties to the insured. Some examples of past recoveries we have collected for our clients include: $1,000,000 from ING Insurance Company; $750,000 from New York Life Insurance Company; $500,000 from AIG American General Life Insurance Co.; $300,000 from Liberty Mutual Insurance Company; and $250,000 from AAA Life Insurance Company, Household Life Insurance Company, Transamerica, and Prudential Life Insurance Company. Although a denial of benefits may feel like the end, recovery is often a solution not far out of reach by the Boonswang Law Firm.
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