Religious Workers and Health Insurance Denials: Understanding Your Rights
When a health insurance claim is wrongfully denied, the impact can be devastating—especially for workers who rely on employer-sponsored health plans. Getting health insurance through their employer is often viewed by employees as a valuable benefit, but when their insurance claim gets denied, they find out that a federal law known as the Employee Retirement Income Security Act (ERISA) severely restricts their rights. While most employees in the private sector are subject to ERISA, religious workers on employer-sponsored plans are typically exempt. This exemption provides them with stronger legal remedies to challenge insurance claim denials and seek appropriate compensation.
As a California insurance bad faith law firm, Gianelli & Morris fights every day on behalf of policyholders whose claims have been wrongfully denied by insurance companies. Learn more below about the rights of religious workers dealing with insurance claim denials, and contact our office if you believe your claim was wrongfully denied in bad faith.
Why Religious Workers Are Exempt from ERISA
ERISA governs most employer-sponsored health plans in the private sector, setting strict limitations on policyholders’ rights to challenge claim denials. However, ERISA specifically excludes “church plans,” which are health insurance plans established and maintained by religious organizations. This exemption applies to employees of churches, synagogues, mosques, and other religious institutions, as well as workers in faith-based schools, charities, and healthcare facilities.
Examples of Religious Workers Covered by Church Plans
Religious workers come from a variety of backgrounds and may be employed in different settings where their health benefits fall outside ERISA’s restrictions. Some examples include:
- Clergy Members – Pastors, priests, rabbis, imams, and other religious leaders who receive health benefits through their church or religious organization.
- Employees of Religious Schools – Teachers, administrators, and staff working in parochial schools, religious universities, and seminaries.
- Workers in Faith-Based Charities – Employees of nonprofit organizations that provide social services, food assistance, or missionary work under the guidance of a religious institution.
- Healthcare Workers at Religious Hospitals – Nurses, doctors, and support staff working at Catholic, Baptist, Jewish, or other religious-affiliated hospitals.
Legal Remedies for Religious Workers Facing Insurance Denials
Because religious workers’ health plans are not governed by ERISA, they have greater legal options when dealing with wrongful claim denials. These include:
- Filing a Bad Faith Insurance Claim – Unlike ERISA policyholders, religious workers can sue their insurer for acting in bad faith if their claim is denied unfairly. A bad faith claim can result in compensation beyond just the denied benefits.
- Recovering Compensatory and Punitive Damages – Religious workers may be eligible for financial damages covering emotional distress, lost wages due to lack of medical treatment, and punitive damages if the insurer’s misconduct was especially egregious.
- Pursuing Legal Action Without an Exhaustive Administrative Process – ERISA policyholders must go through an extensive internal appeals process before they can sue. Religious workers, however, can often take their claims directly to court after minimal internal appeals, making it easier to fight wrongful denials.
How Gianelli & Morris Can Help
If you are a religious worker facing an unjust health insurance claim denial, you have legal options that can help you secure the benefits you deserve. At Gianelli & Morris, we focus our practice exclusively on representing policyholders against insurance companies and holding insurers accountable for wrongful denials. Our team understands the complexities of church plan exemptions and can guide you through the legal process to obtain fair treatment.
Contact Us Today
You do not have to accept an unfair insurance denial without a fight. If you are a religious worker dealing with a denied health insurance claim, contact Gianelli & Morris today for a free consultation. We are committed to protecting your rights and ensuring you receive the coverage and compensation you deserve.
