Does ERISA do a good job of protecting consumers?
No. You have the right to sue if you feel the insurer’s denial was wrong. But often the court will reverse the denial from the insurer or payor of benefits only if that denial was “arbitrary and capricious.” Basically this requires you to show that the insurer was completely unreasonable, a difficult burden of proof for claimants to carry. Insurers know this and they are likely to be more aggressive about denying ERISA claims than they are when they receive claims that are not governed by ERISA. In addition, while ERISA gives participants the right to sue to recover benefits that have been wrongfully denied and for recovery of losses to a group of employees if a fiduciary’s breach of duty causes loss to the group, it doesn’t allow for recovery of any “consequential” damages that result from the wrongful denial. For example, if a disability insurer improperly denies your benefits for several months and your car is repossessed or you lose your home, you can’t recover anything to compensa
