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Insurance Bad Faith

Health Insurance Bad Faith

Your doctor prescribed treatment. Your health insurer denied it. Now you're caught between medical necessity and corporate bottom lines. When insurers wrongfully deny care, we hold them accountable.

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Critical: ERISA May Limit Your Rights

If your health insurance is through your employer, it's likely governed by federal ERISA law. ERISA severely limits remedies—typically to the denied benefits only, with no punitive damages or emotional distress recovery.

Individual plans (purchased directly from insurers or through healthcare.gov) are governed by Oklahoma state law, allowing full bad faith claims. We analyze your plan type immediately to set realistic expectations.

Key Takeaways

  • Plan type matters: ERISA (employer) vs. individual plans have vastly different remedies
  • Appeals are important: Exhaust internal appeals, which build your record for litigation
  • Document harm from delays: Medical consequences of denied care are recoverable damages
  • Mental health parity: Denying mental health while covering physical health may be unlawful

ERISA vs. State Law: Why It Matters

The biggest question in health insurance bad faith is which law applies:

ERISA (Employer Plans)

  • Employer-sponsored group plans
  • Remedies limited to denied benefits
  • No punitive damages
  • No emotional distress damages
  • Must exhaust administrative appeals
  • Federal court jurisdiction

Oklahoma State Law (Individual Plans)

  • Plans purchased individually
  • Healthcare.gov marketplace plans
  • Full bad faith remedies available
  • Punitive damages (no cap)
  • Emotional distress recoverable
  • State court jurisdiction

Common Health Insurance Denial Tactics

Health insurers use sophisticated tactics to deny or minimize care coverage:

Not Medically Necessary

Overriding your treating physician's judgment with their own hired reviewer—often a doctor who never examined you.

Prior Authorization Delays

Requiring approval before treatment, then delaying decisions while you wait in pain or your condition worsens.

Experimental Treatment Label

Calling FDA-approved, widely-accepted treatments 'experimental' or 'investigational' to avoid paying.

Step Therapy/Fail First

Requiring you to try cheaper (often ineffective) treatments before approving what your doctor actually prescribed.

Network Games

Claiming providers are out-of-network, or failing to maintain adequate networks so you can't access covered specialists.

Documentation Technicalities

Denying claims for minor paperwork issues rather than reviewing the underlying medical necessity.

The Appeals Process

Before litigation, you typically must exhaust internal appeals. This process matters—especially for ERISA plans where the administrative record is critical:

1

Internal Appeal

File within 180 days of denial. Include additional medical records, peer-reviewed literature, and letters from treating physicians explaining medical necessity.

2

External Review

If internal appeal fails, request external review by an independent organization. This is a new decision-maker not employed by your insurer.

3

Expedited Review

For urgent situations where delay could seriously jeopardize your health, request expedited review—insurers must respond within 72 hours.

4

Litigation

If appeals fail, litigation may recover the denied benefits plus (for non-ERISA plans) bad faith damages.

Other Types of Bad Faith Claims

First-Party Bad FaithThird-Party Bad FaithStorm & Property ClaimsUM/UIM Bad FaithDelay & Denial TacticsInsurance Bad Faith Overview

Frequently Asked Questions

Critical distinction: Employer-sponsored group health plans are typically governed by ERISA (federal law), which severely limits your remedies—generally to the denied benefits plus attorney fees, with no punitive damages. Individual plans purchased outside employment are subject to Oklahoma state law, allowing full bad faith claims including emotional distress and uncapped punitive damages. We analyze your plan type immediately.
It depends on whether the denial is reasonable. If your treating physicians document medical necessity and the insurer denies based on their own hired reviewer who never examined you, that may be bad faith. We challenge denials where insurers substitute their judgment for qualified treating physicians without proper evaluation.
Prior authorization requires insurer approval before treatment. When insurers delay decisions—forcing postponement of urgent care—or deny authorization without reviewing medical evidence, they may be acting in bad faith. Delays that cause medical harm are particularly egregious. Document every delay and its impact on your health.
The ACA eliminated pre-existing condition exclusions for most health plans. Insurers can't deny coverage for conditions you had before enrollment. If your ACA-compliant plan denies based on pre-existing conditions, that's likely wrongful. However, some grandfathered plans and short-term plans may still have exclusions—we review your specific policy.
Potentially, though it depends on your plan type. If prior authorization delays or wrongful denials delayed your cancer treatment, causing harm (disease progression, additional treatment needed, reduced prognosis), you may have claims. ERISA plans limit remedies, but state-law individual plans allow full damages. This is exactly the kind of life-or-death case that justifies aggressive action.
An exclusion is a policy provision stating certain treatments or conditions aren't covered at all—like cosmetic surgery on many plans. A denial says your specific claim isn't covered, often citing 'not medically necessary' or 'experimental.' Wrongful denials are more commonly bad faith; exclusions are typically policy interpretation disputes (though misrepresenting exclusions is bad faith).
Calling proven treatments 'experimental' to avoid paying is a known bad faith tactic. If your treatment is FDA-approved, widely accepted by the medical community, or recommended by specialists, an 'experimental' denial may be unreasonable. We challenge these denials with medical literature and expert testimony.
Yes. Most plans require internal appeals before litigation. You typically get 180 days to appeal a denial. The appeal should include additional medical documentation and letters from treating physicians explaining necessity. For ERISA plans, what's in the administrative record matters greatly for any later lawsuit—we help build strong appeals.
For individual (non-ERISA) plans: the denied benefits, consequential damages (additional medical costs, worsened condition), emotional distress, and punitive damages (no cap in Oklahoma). For ERISA plans: generally limited to the denied benefits plus attorney fees—a major reason to carefully review your plan type before proceeding.
The Mental Health Parity Act requires insurers to cover mental health and substance abuse treatment no less favorably than physical health conditions. If your plan covers medical treatment but denies comparable mental health coverage, that may violate parity requirements. We analyze whether your denial reflects unlawful discrimination against mental health treatment.

Your Health Shouldn't Wait for Insurance Approval

When health insurers wrongfully deny medically necessary treatment, we fight back. Understand your options, whether you have an ERISA plan or individual coverage.

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