Millions of Workers Losing Benefits They’re Legally Entitled To, New ERISA Analysis Warns

A new national review by ERISA attorney J. Price McNamara is sounding alarm bells over the growing scale of health and disability benefit denials across the United States, revealing that millions of workers are being refused coverage each year — often despite being protected under federal law.

The findings point to a troubling reality: roughly one in five in-network insurance claims are denied annually, and fewer than 1% of those denials are ever appealed, meaning most workers never challenge decisions that may be wrongful or improper.

With the U.S. healthcare and disability system already under strain, the analysis suggests that many workers are not only losing vital benefits, but often doing so in silence.

A Law Designed to Protect Workers — But Reality Tells Another Story

The Employee Retirement Income Security Act (ERISA) governs benefits for more than 156 million American workers, retirees, and dependents, overseeing:

• Over 2.6 million health plans

• Around 800,000 pension and welfare benefit plans

• An estimated $14 trillion in total plan assets

Oversight largely falls to the Employee Benefits Security Administration (EBSA) — the federal body tasked with ensuring workers actually receive the retirement, disability, and health benefits promised to them.

Recent enforcement results show how frequently intervention is needed just to correct benefit denials.

• In 2023, EBSA closed 731 civil investigations, recovering $844.7 million in denied benefits

• In 2024, EBSA closed 729 investigations, with 71% resulting in success or required corrective action, recovering approximately $741.9 million

According to McNamara, those numbers illustrate a critical reality: many of these benefits should never have been withheld in the first place.

Strict Deadlines in Place — But Denials Remain High

ERISA sets strict timelines for insurers and plan administrators. For healthcare claims:

• Urgent care: decision required within 72 hours

• Non-urgent pre-service: 15 days, with limited extension allowance

• Post-service claims: 30 days

For disability benefit claims:

• Initial decisions generally expected within 90 days

• Appeals typically must be resolved within 45 days

Despite these protections, denial rates remain high.

In 2023, federal marketplace insurers:

• Denied 19% of in-network claims

• Denied 37% of out-of-network claims

State denial rates vary significantly:

• Alabama — 34% (highest in the nation)

• Oklahoma — 29%

• Alaska — 25%

• Hawaii — 24%

• Indiana — 23%

• Texas — 22%

• South Dakota — 6% (lowest)

In Florida, the average denial rate was 16%, though individual insurer denial rates ranged from 8% to 54%, demonstrating how dramatically outcomes can change depending on the insurer.

Among the largest U.S. insurers handling more than 5 million claims, denial rates ranged from 13% to 35%. Yet fewer than 1% of those denials ever reached appeal.

The Workers Most Likely to Get Hurt — Often Have the Least Protection

The report also highlights who is most vulnerable when denials happen.

According to 2023 Bureau of Labor Statistics data, private-industry workers average 2.4 workplace injuries or illnesses per 100 workers. But several industries face significantly higher risks:

• Agriculture, forestry, fishing, hunting — 4.2

• Coal mining — 4.4

• Crop production — 4.5

• Fruit and tree-nut farming — 5.2

• Animal production — 8.7

• Hunting and trapping — 9.4

Yet many of these same workers lack disability insurance altogether.

As of March 2024:

• Only 34% of private-industry workers have long-term disability coverage

• Only 24% of lowest-wage workers have short-term disability

• Only 22% of part-time workers are covered

• Workers in small firms (1–99 employees) — 30% access
  vs 69% access in large firms

• Only 36% of workers in the West Census region have short-term disability coverage

This creates a dangerous equation: the people most likely to be injured are often the least likely to be financially protected when denied.

Why So Few Workers Appeal — Even When They Could Win

Despite widespread denials, most never challenge the decision.

National figures show that fewer than 1% of denied in-network marketplace claims were appealed in 2023.

Reasons include:

• Complicated paperwork

• Automated denial systems

• Lack of clarity around appeal rights

• Doctors unable to assist due to workload

• Many workers feeling the process is “too difficult” to attempt

Ironically, many appeals succeed — highlighting how many legitimate claims never even receive a second review.

Calls for Reform and Accountability

Federal agencies have already raised concerns.

The U.S. Government Accountability Office has recommended mandatory denial transparency and public reporting standards. Meanwhile, ERISA’s Advisory Council has issued reform recommendations including:

• Faster urgent care claim processing

• Stronger education on claimant appeal rights

• Ensuring clinical decisions reflect evidence-based standards

Millions of small benefit plans remain exempt from reporting rules, creating transparency gaps. And even when wrongful denials are discovered, cases are often handled through voluntary compliance — meaning many companies face little public accountability.

A System Workers Can’t Afford to Ignore

With high denial rates, low disability coverage access, and almost no appeals, the consequences can be severe. Workers face:

• Delayed or denied treatment

• Financial instability

• Mounting debt

• Long-term health impact

McNamara’s analysis reinforces a basic principle: if workers are entitled to benefits, they should receive them — without needing federal enforcement to intervene.

Until systemic improvements arrive, legal support remains essential for many families. Firms like J. Price McNamara Law continue to represent workers fighting to recover benefits improperly denied under ERISA.