Public Employee Health Insurance Denials: Your Rights and Legal Remedies
When health insurance claims are wrongfully denied, policyholders often face an uphill battle to secure the benefits they are entitled to. This struggle is especially difficult for those whose insurance is governed by the Employee Retirement Income Security Act (ERISA), a federal law that significantly limits policyholders’ rights to challenge insurance claim denials. However, public employees are exempt from ERISA, which means they have additional legal remedies available when dealing with bad faith insurance denials.
Gianelli & Morris is an insurance law firm that represents public employees and others whose insurance claims have been wrongfully denied by their insurance company. Learn more below about your rights and remedies as a public employee to fight an unfair claim denial. If you have an insurance claim that was wrongfully denied, contact Gianelli & Morris for support from an experienced and dedicated California insurance bad faith attorney.
How ERISA Limits Policyholders’ Rights
ERISA applies to most employer-sponsored health insurance plans in the private sector. While originally designed to protect employees’ benefits, ERISA places significant restrictions on policyholders seeking to dispute a wrongful claim denial. These restrictions include:
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Exhaustive Administrative Process – Policyholders must go through an internal appeal process before they can file a lawsuit. This means they cannot immediately take legal action against the insurer and must first exhaust all administrative remedies, which can be time-consuming and frustrating.
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No Bad Faith Claim – Under ERISA, policyholders cannot sue their insurer for acting in bad faith. Even if an insurance company unreasonably denies a valid claim, the policyholder has no recourse for bad faith damages.
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No Recovery of Compensatory or Punitive Damages – If an ERISA-governed insurance claim is denied, the policyholder can only recover the amount of benefits owed under the policy. Unlike other legal claims, ERISA does not allow for compensation for emotional distress, financial harm caused by the denial, or punitive damages to punish the insurer’s wrongful conduct.
Public Employees Are Exempt from ERISA
While ERISA applies to most private-sector employer-sponsored health insurance plans, it does not cover public employees, including state, county, city, and other government workers. Public employee health insurance plans are typically governed by state laws rather than ERISA, which means these employees have more options to challenge an insurance denial and seek compensation for wrongful actions by their insurer.
Legal Remedies for Public Employees Facing Health Insurance Denials
Because public employees are not subject to ERISA restrictions, they have stronger legal protections and more avenues for recourse when dealing with wrongful insurance denials. Public employees can, for instance:
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File a Bad Faith Insurance Claim – Unlike workers bound by ERISA-governed plans, public employees can sue their insurance provider for acting in bad faith. If an insurer unreasonably denies a claim, delays payment, or engages in deceptive practices, the policyholder can seek damages beyond just the policy benefits.
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Recover Compensatory and Punitive Damages – Public employees may be entitled to compensation for financial losses caused by the denial, emotional distress, and even punitive damages if the insurer’s conduct was particularly egregious. Also known as exemplary damages, punitive damages are designed to punish insurers for wrongful behavior and deter similar misconduct in the future.
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Pursue Legal Action Without an Exhaustive Administrative Process – Unlike ERISA policyholders, public employees do not have to go through an extensive internal appeal process before taking legal action. While many insurance policies require some level of administrative appeal, public employees generally have greater flexibility in bringing a lawsuit against the insurer without unnecessary delays.
How Gianelli & Morris Can Help
If you are a public employee facing a wrongful health insurance claim denial, you do not have to accept the insurer’s decision without a fight. At Gianelli & Morris, we have extensive experience representing policyholders in bad faith insurance claims and holding insurance companies accountable for their wrongful actions. Our team can help you navigate the legal process, challenge wrongful denials, and seek the full compensation you deserve.
Contact Us Today
Don’t let an insurance company’s unfair denial of benefits stand in the way of the coverage you need. If you are a public employee dealing with a denied health insurance claim, contact Gianelli & Morris today for a free consultation. We are dedicated to protecting policyholders’ rights and ensuring that insurers are held accountable for their bad faith actions.
