ADMINISTRATIVE EXHAUSTION

If you see the words “administrative exhaustion” or “you have exhausted your administrative remedies” at the end of a letter from a disability insurance company you may wonder what this means.  Disability insurance polices governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) require that a disability insurance claimant seeking to bring a lawsuit under the ERISA statute complete all necessary appeals with the ERISA administrator before filing suit.  ERISA governs employee benefit plan litigation, meaning benefits workers obtain as a result of working for an employer, with exceptions for most government and church plan employees.  The requirement that the disability claimant complete the appeal process before bringing the case before a judge is called administrative exhaustion – the ERISA claimant “exhausts” –or finishes — the claimant’s remedies with the ERISA administrator before seeking the claimant’s remedies with the Court.  Failing to exhaust administrative remedies – filing your case too soon in the process – can create serious problems.  On the other hand, not all appeals are mandatory.  If you are uncertain whether your case is ready to file or need someone to explain a letter from a disability insurance company, an attorney practicing ERISA disability insurance litigation can often be of considerable assistance.  If you have received your first denial on a disability claim, appealing with an ERISA attorney is also something that should be considered.