The Employment Retirement Income Security Act of 1974 or ERISA applies to any “employee welfare benefit plan” established or maintained “by any employer engaged in commerce or in any industry or activity affecting commerce. 29 U.S.C. § 1003(a). An “employee welfare benefit plan” is defined in the statute as being any “plan, fund or program. . .established or 1 maintained by an employer or by an employee organization. . .for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise. . .benefits in the event of. . .disability. . .” 29 U.S.C. § 1002 (1). Consequently, if someone has a problem getting his or her medical insurance to cover a claim, or is covered for life insurance or long-term disability (“LTD”) insurance at work, and has been denied benefits, the claim is likely covered by ERISA. Unfortunately, under ERISA there is no right to a jury trial, punitive damages are prohibited, and discovery is limited.
Indeed, the court's review is limited to the “administrative record.” See, Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991); Perry v. Simplicity Engineering, 900 F.2d 963 (6th Cir. 1990); McMahon v. New England Mut. Life Ins. Co., 888 F.2d 426, 431 N.1 (6 th Cir. 1989). Additionally, under ERISA an insurance company can win a case even if its decision was wrong because a plaintiff has to prove that the insurance company's decision was both wrong and unreasonable. Insurance companies take advantage of this situation.