What Does An ERISA Attorney Do?
If you are having trouble getting your benefits under a plan provided by your employer, you may need an ERISA attorney. Your employer may provide medical, surgical, or mental health care benefits, a retirement plan, long-term disability income through an insurance contract, severance benefits, or even a legal services or child care assistance plan for you and your dependents. If you apply for benefits, or even request information about a plan like this, and are denied, an attorney who has experience with ERISA may be able to assist you.
What is ERISA?
ERISA is the acronym for the Employee Retirement Income Security Act of 1974, (also “the Act”), the federal law that governs all private employer-provided employee benefit plans. Government-sponsored and church-sponsored plans are largely exempt from ERISA, however, other laws, including the Internal Revenue Code, do apply to those plans. Church Plans, Government Plans, and Single-Employer Collectively Bargained Plans. Specifically, ERISA applies to “employee welfare benefit plans” and “employee pension plans” established and maintained by a private employer. 29 US Code § 1002 - Definitions | US Code.
ERISA does not require an employer to establish benefit plans, but once it does, the plan sponsor must follow ERISA’s minimum eligibility, vesting, disclosure, and funding rules. The Act also codifies fiduciary rules that apply to trustees and other individuals that manage and administer these plans and, if violated, the fiduciary can be held personally liable for the harm caused.
Further, ERISA provides many protections for participants and beneficiaries, often in the form of mandatory disclosures and claims procedures that the plan must follow. ERISA also provides participants and beneficiaries with the right to bring a civil suit in federal court and, if successful, the right to attorney’s fees and costs related to the litigation.
What Does an ERISA Attorney Do?
Relative to other areas of the law in the United States, there are few attorneys that practice in the area of ERISA. Most that do practice in this area assist the employers who sponsor benefit plans by advising them on the many filing and disclosure requirements they must meet under the Act. They may also defend the employer, plan administrator, or insurer in actions brought by participants under ERISA.
Other ERISA firms, like McKain Law, PLLC, are on the employee side of the equation, representing participants and beneficiaries who have had their benefits denied or incorrectly calculated, or are having some other benefits issue with the employer or insurer.
Where a benefit claim has been denied, your ERISA attorney may review the plan’s decision, and other relevant records, and draft an appeal letter with supporting evidence arguing that the benefit denial should be overturned and benefits granted or reinstated. If the appeal is unsuccessful, the attorney may bring an action in federal court asking the court to decide if the plan administrator’s decision was “arbitrary and capricious,” and requesting that the benefits be granted and attorney’s fees and costs awarded to the participant.
As an example of employee-side ERISA work, if your child was experiencing mental health problems and required the 24/7 care provided by a residential mental health or substance abuse treatment facility, and your health plan denied the coverage, you would want an ERISA attorney well-versed in the Mental Health Parity laws (part of ERISA) to appeal the denied claim.
Likewise, if you applied for and were denied long-term disability benefits under your employer-provided plan, an ERISA attorney that has worked extensively with ERISA’s disability claims procedures could appeal the claim.
In general with these types of claims, an experienced attorney would gather the relevant medical records, and might work with your treatment providers to have them write about your disability in a way that answered or rebutted the insurer or plan’s arguments. She or he might also help you set up an independent medical exam to gather further medical evidence of you or your child’s condition.
It is critical that your appeal is strong and based on objective evidence because, if your appeal is denied, your recourse at that point is typically a federal court action, where the court in most cases will review the same records that were provided to the plan administrator.
ERISA also requires the insurer (or plan) to be fair and objective in reviewing claims, and consider all evidence with an eye toward granting benefits and administering the plan “for the benefit of” the participants. Consequently, an experienced ERISA attorney would request the claim file from the plan administrator and review it carefully for evidence of bias, carelessness, or “arbitrariness” on the part of the insurer denying the claim. In addition, the claim file can be a roadmap to determining what evidence to submit to the plan administrator in support of your appeal.
Other situations in which an ERISA attorney might assist you include when you:
believe your retirement benefits were incorrectly calculated;
were offered a severance benefit and are not certain if you are forfeiting other important benefits or rights by accepting it;
were divorced and have rights to your ex-spouse’s retirement benefits but need a QDRO;
were drawing an early pension under a union plan, but your benefits were suspended because you allegedly work in a related trade contrary to plan rules;
were receiving disability benefits and the plan suddenly decided you are no longer disabled and terminated your benefit payments;
believe a QDRO submitted to a plan for approval is being interpreted incorrectly; or
you are not receiving information about your benefits after requesting it, or do not understand your rights under a benefit plan.
In relation to QDROs, some ERISA attorneys act on behalf of the employer and review the QDRO to ensure it does not violate the terms of the plan. Other attorneys assist divorce attorneys or the ex-spouses in drafting the QDRO and having it qualified. As noted in other articles on this site, there are many steps to the process of obtaining a marital share of your spouse’s retirement benefits via a QDRO.
Related to QDROs, the division of many non-ERISA retirement plans are governed by rules that are, essentially, adapted from ERISA’s rules and procedures. Consequently, some “ERISA attorneys” also assist participants that have benefits under these other retirement plans, or IRAs, that must be divided during or after divorce.
While these plans and accounts are not technically governed by the QDRO rules, and may in fact have different and additional forms and requirements, the process is similar enough overall that an ERISA attorney or QDRO attorney can handle the division process. Examples include: military court orders (called “MQCOs”); Postal Service and other federal government orders (“COAPs”); Foreign Service pensions; and state and local municipality, police, teachers, or firefighter pensions.
And although most IRA divisions do not require QDROs because they are not regulated “plans,” they can be complicated to divide for that very reason: providers are not subject to one set of rules, and each has their own forms and procedures for division.
For IRAs, it’s important to keep in mind that almost no IRA account manager will calculate gains or losses on the share to be transferred to the ex-spouse, which can lead to issues if the separation agreement provides for gains and losses to be calculated. In that situation, however, an ERISA attorney who has worked extensively in the retirement area will know how to ask the right questions and ensure a smoother process.
What to Expect with ERISA Attorney Fees
Attorney fees in the area of ERISA are typically charged by the hour, and the hourly rate will vary widely depending on where the attorney is located and the complexity of the issues. ERISA attorneys in larger cities, for example, may charge as much as $500 to $650 per hour, whereas in smaller metropolitan areas the hourly rate may be in the $285 to $350 range.
Fees in the area of ERISA generally reflect the specialized nature of the work, the high degree of difficulty associated with ERISA issues, and the fact that few attorneys practice in this area.
That said, when it comes to litigation, ERISA is one of only a few “fee-shifting” statutes that permit a court to grant fees to a successful litigant. In other words, if a participant has at least “some success” from bringing their action, the court typically requires the plan or insurer that has denied the benefits to pay the participant’s legal fees. In some cases, courts have even granted a fee request where the litigation led to a settlement of the case.
The courts have determined, however, that the fees related to appealing a claim prior to bringing a court action are not recoverable against the plan or insurer under ERISA, even if the appeal is successful. Thus, for an appeal, a claimant will likely have to pay for the attorney’s time on an hourly basis or as a percentage of the recovery.
Need ERISA-related Help?
If you have a question related to your employee benefits, contact McKain Law to see if we can assist you. We provide 30-minute and 60-minute initial consultations at a 50% discounted rate.