Your Rights When Insurance Denies Your Claim

When your health insurance company denies a claim, it can feel like they have the final say. They do not. Federal and state laws give you specific, enforceable rights to challenge that decision. Understanding these rights is the first step toward getting your claim approved.

The Affordable Care Act (ACA) Appeal Rights

The ACA (sometimes called Obamacare) established a set of appeal rights that apply to most health insurance plans. These include:

Right to an Internal Appeal

You have the right to ask your insurance company to conduct a full review of its decision to deny coverage. During the internal appeal:

• Your case must be reviewed by someone who was not involved in the original denial
• The reviewer must be a healthcare professional with appropriate training and experience in the relevant field
• You can submit additional information, including medical records and letters from your doctor
• The insurer must provide you with new or additional evidence or rationale it plans to rely on before making a final decision

Timeline: The insurer must make a decision within 30 days for pre-service claims (before treatment) or 60 days for post-service claims (after treatment). For urgent claims, the decision must come within 72 hours.

Right to an External Review

If your internal appeal is denied, you have the right to an independent external review. This means:

• An independent third party (not your insurer) reviews your case
• The reviewer is a medical professional with expertise in your condition
• The external reviewer's decision is legally binding on your insurer
• If the reviewer rules in your favor, your insurer must cover the service

You generally have four months after your internal appeal denial to request an external review.

ERISA Protections for Employer-Sponsored Plans

If you get your insurance through your employer, your plan is likely governed by the Employee Retirement Income Security Act (ERISA). ERISA provides additional protections:

Right to Your Complete Claim File

Under ERISA Section 503 and Department of Labor regulations (29 CFR 2560.503-1), you have the right to:

• Receive a clear explanation of why your claim was denied
• Obtain copies of all documents, records, and information relevant to your claim
• Receive the specific plan provisions on which the denial was based
• Know the identity of any medical expert consulted during the decision

Right to Sue in Federal Court

If your internal appeal and external review both fail, ERISA gives you the right to file a lawsuit in federal court. While this is a last resort, the threat of litigation can be a powerful motivator for insurers to reconsider their decision.

The No Surprises Act

Effective January 1, 2022, the No Surprises Act provides important protections against unexpected medical bills:

• Emergency services must be covered at in-network rates, even if provided by an out-of-network provider
• Out-of-network providers at in-network facilities cannot balance bill you for more than in-network cost-sharing amounts (for most services)
• You have the right to a good faith estimate of costs before scheduled services if you are uninsured or self-pay
• An independent dispute resolution process is available for billing disputes between providers and insurers

State-Level Protections

In addition to federal law, most states have their own insurance regulations that may provide even stronger protections:

• External review programs — Many states have their own external review processes with consumer-friendly rules
• Timely claims processing — States often require insurers to pay claims within specific timeframes (typically 30-45 days)
• Mental health parity — While federal law requires mental health parity, some states have additional enforcement mechanisms
• Surprise billing protections — Some states had surprise billing laws before the federal No Surprises Act, and these may provide additional protections

Check your state's Department of Insurance website for protections specific to your state.

Your Right to File Complaints

If your insurer is not following the law, you can file complaints with:

• Your state's Department of Insurance — They regulate insurance companies and can investigate violations
• The Centers for Medicare & Medicaid Services (CMS) — For issues with ACA marketplace plans
• The Department of Labor — For issues with employer-sponsored (ERISA) plans
• Your state's Attorney General — For patterns of unfair business practices

These agencies take complaints seriously. A formal complaint creates a paper trail and can prompt regulatory action.

How to Exercise Your Rights

Knowing your rights is only useful if you act on them. Here is a practical framework:

1. Read your denial letter and identify the specific reason and legal basis for the denial
2. Request your complete claim file from the insurer (cite ERISA Section 503 or your state equivalent)
3. File an internal appeal within the deadline stated in your denial letter
4. Include strong evidence — doctor's letter, medical records, clinical guidelines
5. If denied again, file for external review within four months
6. File a complaint with your state's Department of Insurance if the insurer is not complying with the law

How Lysco Can Help

Navigating insurance law while dealing with a health issue is overwhelming. Lysco analyzes your denial letter, identifies which laws and regulations apply to your specific situation, and generates an appeal letter that cites the correct legal provisions. Upload your denial at lysco.com to understand your rights and your options.

Sources: Affordable Care Act Sections 2719 and 2719A, ERISA Section 503, 29 CFR 2560.503-1, No Surprises Act (Public Law 116-260, Division BB Title I), Department of Labor EBSA guidance, CMS marketplace regulations.