erisa-medicare-cobra-and-medigap-appeal-rights">Retiree Insurance Claim Denied? ERISA, Medicare, COBRA, and Medigap Appeal Rights

Retirement should mean financial stability, not insurance battles. Yet retirees face a uniquely complex health coverage landscape — often juggling Medicare, employer retiree plans, Medigap supplemental policies, and COBRA — and insurance denials in retirement can carry significant financial consequences. This guide covers the specific denial patterns retirees encounter and the appeal rights available under each type of coverage.

Employer Retiree Health Plans Under ERISA

Many retirees retain health coverage through former employers via retiree health benefit plans. These plans are governed by ERISA (29 U.S.C. § 1001 et seq.), just like active employee plans. However, retiree health benefits have one critical difference from pension benefits: unlike pension benefits, which vest and cannot be reduced after vesting, the Supreme Court held in M&G Polymers USA v. Tackett (2015) that retiree health benefits do not vest unless the plan documents explicitly say they do. This means employers can legally reduce or eliminate retiree health benefits unless the plan or collective bargaining agreement contains specific vesting language.

If your former employer has changed or reduced your retiree health benefits, review your original plan documents (particularly the Summary Plan Description you received at retirement) to determine whether vesting language exists. If it does, you may have grounds to challenge the reduction under ERISA.

For ongoing claim denials under a retiree ERISA plan, your rights are the same as any other ERISA plan participant: you are entitled to a written denial explanation, access to the complete claims file, an internal appeal, External Independent Review: Complete Guide" class="auto-link">external review, and the right to sue in federal court under 29 U.S.C. § 1132(a) after exhausting internal remedies.

Medicare as Primary Coverage

Most retirees become eligible for Medicare at age 65 — Parts A and B together form Original Medicare. Medicare claim denials occur when Medicare determines a service is not medically necessary, not covered under Part A or B, or not provided by a Medicare-enrolled provider. Medicare's coverage policies are found in National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs) published at cms.gov/medicare-coverage-database.

For Medicare Part A (hospital) and Part B (medical) claim denials, the appeal process under 42 CFR Part 405 provides five levels: Redetermination (by the Medicare Administrative Contractor within 60 days), Reconsideration (by a Qualified Independent Contractor within 60 days), ALJ Hearing (if the amount in controversy meets the threshold, currently $180), Medicare Appeals Council review, and federal district court.

Medicare Advantage Denials

If you are enrolled in a Medicare Advantage plan rather than Original Medicare, the five-level MA appeal process under 42 CFR §§ 422.560-422.622 applies. See our dedicated Medicare Advantage guide for the full process. The 2023 OIG report documented that MA plans frequently deny services that Original Medicare would have covered — and that beneficiaries who appeal win at high rates.

Coordination of Benefits Disputes

Retirees with both Medicare and an employer retiree plan often face coordination of benefits (COB) disputes — where each payer claims the other should pay first. Medicare is generally the primary payer for retirees age 65 and older unless they have employer coverage through a current employer with 20 or more employees. For retiree plans, Medicare is almost always primary. If a claim is denied because of a COB dispute, contact both payers and request a written explanation of the coordination rule they are applying, then appeal the insurer applying the rule incorrectly.

COBRA Appeal Rights

If you left employment and elected COBRA continuation coverage, you have the right to continue your former employer's group plan for up to 18 months (or 36 months in some circumstances) at your own expense. COBRA claims are governed by the same ERISA rules as the underlying employer plan. COBRA-specific denial issues include: disputes about whether you timely elected COBRA, whether your COBRA premiums were paid within the grace period, and whether COBRA coverage was properly extended. The DOL's EBSA (Employee Benefits Security Administration) handles COBRA complaints.

If your employer failed to provide you proper COBRA election notice within 14 days of a qualifying event (your employer is required to notify the plan administrator within 30 days and the plan administrator must notify you within 14 days), you may have a private right of action for statutory penalties of up to $110 per day under 29 U.S.C. § 1132(c).

Medigap (Medicare Supplement) Denials

Medigap policies — Plans A through N — are sold by private insurers to cover Medicare cost-sharing amounts. Medigap denials most commonly involve: claims that a service was not covered by Medicare in the first place (and therefore Medigap has nothing to pay); disputes about which Medigap plan letter applies; or claims during the waiting period of a newly issued Medigap policy. For Medigap denials, file a complaint with your state's Department of Insurance and escalate to your State Health Insurance Assistance Program (SHIP).

Fight Back With ClaimBack

ClaimBack helps retirees navigate the layered complexity of Medicare, ERISA retiree plans, COBRA, and Medigap appeals with targeted, regulation-specific appeal packages.

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Related Reading

• How to Write an Insurance Appeal Letter
• Internal vs. External Insurance Appeals: Which to Use
• Common Reasons Insurance Claims Are Denied