Illinois ERISA Lawyer Blog

Employees who are participants in disability plans sponsored by Chicago area employers frequently call my office after receiving a letter denying a claim for benefits. Often times, the reason for the denial may have been a procedural error by the administrator, preventing it from giving you a "full and fair review", as required by ERISA. The denial letter must explain the reason for the denial, it must reference the specific plan provision upon which the denial is based, and it must describe any additional material or information you would need to submit in order to get the benefits. 29 C.F.R. § 2560.503-1(g)(1).

ERISA imposes a high standard of care upon fiduciaries that make decision on claims. Merely telling claimants they need to submit additional medical records will not typically meet this standard. But even where the administrator fails to meet this standard, the question may arise whether the claim was denied for lack of supporting evidence or not. Such was the case recently in Tortora v. SBC Communications, Inc., 2011 U.S. App. LEXIS 22407 (2d Cir. Nov. 3, 2011). Sedgwick, as claims administrator for SBC's disability plan, denied a claim and stated "You may also submit additional medical or vocational information, and any facts, data, questions or comments you deem appropriate for us to give your appeal proper consideration." The court held that language did not meet the standard imposed by ERISA because it did not provide proper notice of how to perfect the claim. However, according to the denial letter, the medical records submitted were not indicative of disability, so the error was harmless.

If you have received a letter denying your claim for benefits and have questions about whether the denial was proper, call an ERISA lawyer.

Employees in Chicago and the Midwest often find themselves making difficult decisions with regard to compensation and pension benefits in jobs. Sometimes you must sacrifice lucrative benefits for either better job security, more money, or to even have a job at all. Employers are constantly looking for ways to save money, and sometimes even customers of your employer may look for ways to save money. Recently, a local Teamsters union challenged actions taken by BNSF Railway Company as unlawfully interfering with union members' protected benefits under ERISA. Teamsters Local Union 705 v. BNSF Ry. Co., 2011 U.S. Dist. LEXIS 12750 (N.D. Ill. Nov. 3, 2011).

BNSF cancelled a service contract with Rail Terminal Services, and shortly after Rail Terminal Services discontinued its operations. BNSF then hired many of the former employees of Rail Terminal Services to perform essentially the same work they had done before. The difference was that Rail Terminal Services was subject to a collective bargaining agreement, and the employees were receiving pension, health, and other benefits through the union plan. But when BNSF hired them, it did not provide the same level of benefits, thereby reducing its cost.

The Court held this was not an unlawful interference with the employees' benefits. BNSF's cancellation of the service contract was lawful. Not to say that the action taken by BNSF could never be an unlawful interference with benefits, but in this case the Teamsters did not offer any evidence that BNSF intended to interfere with the benefits.

If you have questions about your employee benefits rights, speak with a lawyer concentrating in ERISA.