Why Most People Never Appeal ERISA Healthcare Denials, And Why That Needs to Change (2025 Update)
Each year, millions of Americans are denied healthcare benefits by employer-sponsored health plans. Many of these plans are regulated by the Employee Retirement Income Security Act (ERISA). Despite rising denial rates, very few people appeal. Recent data and federal policy changes make understanding your rights and taking action more crucial than ever.
What Is ERISA?
ERISA is a federal law that governs most group health plans provided by private employers. It sets nationwide standards for:
- How insurers must notify you of a denial
- Your right to file an appeal
- Required response timeframes
- Your right to access plan documents and your claim file
- How courts review denied claims
If you receive health insurance through your employer, your plan is likely governed by ERISA, even if the insurer is a private company.
Denials Are Rising—But Appeals Are Rare
Denial Rates Are Increasing
According to 2024–2025 data:
| Metric | Rate/Statistic |
| Initial claim denial rate (all plans) | 11.8% |
| Medicare Advantage denial rate | 15.7% |
| Commercial plan denial rate | 13.9% |
| Average amount denied per claim | $14,000+ |
Some large insurers have denial rates exceeding 35% in certain states. For Medicare Advantage plans, denials have increased by 56% over the past several years.
Appeal Rates Remain Extremely Low
Despite these high denial numbers, less than 1% of patients appeal. When appeals are filed by providers, over 54% are successful. This gap suggests that many denials could be reversed, but they are not.
Common Reasons for Denial
Most denials fall into predictable categories:
- Medical necessity not established
- Prior authorization was not obtained
- Excluded services under the plan
- Administrative or coding errors
- Lack of coverage for the requested service
Many denied claims involve high-cost or complex treatments. According to recent analysis, the average denied claim is valued at more than $14,000.
What ERISA Requires in 2025
Federal law mandates that all ERISA-covered health plans:
- Provide a written denial notice stating the specific reason for denial
- Give you at least 180 days to file an internal appeal
- Grant you access to the complete plan documents and your claim file upon request
- Conduct a full and fair review of your appeal
- Allow you to sue in federal court under 29 U.S.C. § 1132(a)(1)(B) if the appeal is denied
If the insurer fails to follow these procedures, courts may apply a stricter standard of review or even reverse the denial outright.
Your Appeal May Be Your Only Chance
Here’s a critically important fact that most people don’t learn until it’s too late:
In ERISA cases, you typically only get one appeal, and the court will only review the evidence you submitted during that appeal.
That means the administrative record you build during your appeal becomes the entire case if you later file a lawsuit.
What to Include in Your Appeal:
- All relevant medical records (labs, notes, progress summaries)
- Imaging and films (MRIs, CT scans, X-rays)
- Physician narratives or letters explaining medical necessity
- Second opinions or independent medical reviews
- Relevant plan documents or excerpts
- A written summary of how the denial affects your health and quality of life
If you leave out key medical documentation or rely only on what the insurance company already has, you may lose the right to submit it later in court.
Courts do not accept new evidence once the administrative record is closed unless extraordinary circumstances exist. The importance of the administrative record is one of the most misunderstood and costly mistakes people make in ERISA appeals.
2025 Policy Developments: The ERISA Advisory Council Report
In March 2025, the ERISA Advisory Council, which advises the U.S. Department of Labor, released a report recommending major reforms. These recommendations aim to protect patients and improve transparency in the appeal process:
Key Recommendations:
- Educate plan participants about their appeal rights
- Standardize denial letters using plain, specific language
- Require human review of AI-generated denials
- Treat decision-makers as fiduciaries when they make clinical judgments
- Strengthen recordkeeping requirements to preserve appeals evidence
- Mandate adherence to recognized medical standards of care
- Improve national reporting of denial and appeal data through Form 5500
Regulatory and Legal Trends
- Class action litigation is increasing. In 2024, 136 new ERISA class actions were filed, many of which involved wrongful claim denials and fiduciary breaches.
- AI is under greater scrutiny. Regulators are demanding transparency when AI or automation is used to make clinical decisions. A growing number of appeals now challenge algorithmic denials as lacking “meaningful human review.”
What You Can Do Right Now
If your claim was denied, here’s what to do:
- Request all plan documents and your entire claim file in writing.
- Ask your doctor for a detailed letter explaining why the treatment is medically necessary.
- Submit all relevant medical records and imaging, even if you think the insurer already has them.
- Review the denial notice for vague reasoning or procedural flaws.
- Track all deadlines. You usually have 180 days to appeal.
- Document everything. Keep records of all communications and submission dates.
- Note procedural violations. If the plan delays, withholds documents, or issues a generic denial, it may have breached ERISA rules.
- Prepare for litigation. If your appeal is denied, you may have the right to sue in federal court, but the court will only review the record you submitted.
Why This Matters
Insurance companies benefit when you give up. The law gives you rights, but you must use them. Denials are up. AI involvement is increasing. Yet appeals are often successful, especially when backed by proper documentation and a clear legal strategy.
Bottom Line
The data from 2025 indicates that denial rates are increasing, yet the majority of appeals are not being submitted. That silence helps insurers, but it can hurt your health. ERISA gives you the tools to demand fair treatment. Use them. The right appeal, fully documented and submitted on time, may be your only opportunity to secure the care you need.
If your health is on the line, don’t accept the first “no.” At Appeal Healthcare, we help patients and providers across Kentucky and Ohio fight for what’s right, one appeal at a time.
Ethics and compliance notes for Ohio and Kentucky
Attorney Advertising. This page provides general information. It is not legal advice and does not create an attorney-client relationship. Every situation is fact-specific. Do not rely on this content without advice from a lawyer who knows your facts. Past results do not predict future results.
Responsible lawyer and office address: Frank M. Mungo Attorney at Law, 7310 Turfway Road, Suite 550, Florence, Kentucky 41042. Mr. Mungo is licensed in Kentucky and Ohio.
