Millions of U.S. Workers Losing Out as ERISA Claim Denials Remain High, New Analysis Warns

A detailed new analysis from ERISA attorney J. Price McNamara highlights a growing national problem: millions of American workers are seeing their health and disability benefit claims denied each year, despite being protected under federal law. With roughly one in five in-network insurance claims denied annually — and fewer than 1% ever appealed — the findings suggest that U.S. workers are routinely missing out on benefits they are legally entitled to receive.

The Employee Retirement Income Security Act (ERISA) governs more than 156 million workers, retirees, and dependents, covering over 2.6 million health plans, 800,000 pension and welfare plans, and plan assets estimated at around $14 trillion. Oversight of these plans rests largely with the Employee Benefits Security Administration (EBSA), which is tasked with ensuring workers receive the retirement, health, and disability benefits they are owed.

In 2023 alone, EBSA closed 731 civil investigations and recovered $844.7 million in previously denied benefits. In 2024, EBSA closed 729 civil investigations, with 71% resulting in success or corrective action, recovering approximately $741.9 million. These recoveries underscore the scale of improper denials and the degree to which enforcement action is often required before workers receive benefits that should never have been withheld.

A National System of Delays and Denials

Under ERISA regulations, strict timelines govern claim handling. Urgent medical care decisions should be made within 72 hours, non-urgent pre-service claims within 15 days, and post-service claims within 30 days, with extensions allowed in limited circumstances. Disability benefit decisions generally require a determination within 90 days, while appeals should be resolved within 45 days.

Despite this framework, denial rates remain high. In 2023, insurers on the federal marketplace denied 19% of in-network claims and 37% of out-of-network claims. At the state level, denial rates vary significantly. Alabama recorded the nation’s highest denial rate at 34%, followed by Oklahoma (29%), Alaska (25%), Hawaii (24%), and Indiana (23%). Texas reported 22%, while the lowest denial rate was found in South Dakota (6%). In Florida, the average denial rate reached 16%, though some insurers ranged from 8% to 54%, illustrating how heavily outcomes can depend on insurer policy.

Among major insurers processing more than five million claims, denial rates ranged between 13% and 35% nationwide. Yet fewer than 1% of denied in-network claims ever entered an appeal process, leaving millions of dollars in foregone benefits unchallenged.

Who Suffers Most? High-Risk Workers With the Least Protection

The burden of denials is most severe in sectors with elevated workplace injury risk. According to 2023 Bureau of Labor Statistics data, private-industry workers experienced an average of 2.4 injuries or illnesses per 100 full-time employees. Certain industries far exceed that benchmark:

• Agriculture, forestry, fishing, and hunting: 4.2 cases per 100 workers
• Coal mining: 4.4 cases per 100
• Crop production: 4.5 cases per 100
• Fruit and tree-nut farming: 5.2 cases per 100
• Animal production: 8.7 cases per 100
• Hunting and trapping: 9.4 cases per 100

These are among the most dangerous occupations in the country, yet many of these workers lack disability protection. As of March 2024, only 34% of private-industry workers had access to employer-provided long-term disability coverage. Access to short-term disability is similarly uneven:

• Only 24% of workers in the lowest wage quartile have short-term disability coverage
• Only 22% of part-time workers are covered
• Workers in small firms (1–99 employees) have 30% access vs 69% in large firms
• Only 36% of workers in the West Census region have short-term disability access

This means the workers most likely to suffer injuries are often the least protected when claims are denied — creating severe financial and health consequences.

Appeals Remain Rare — Even When They Succeed

National marketplace data shows fewer than 1% of denied in-network claims were appealed in 2023. Research suggests multiple barriers: complex paperwork, automation in denial processes, limited physician capacity to assist, lack of clarity about rights, and many patients feeling appeals are “too difficult” to pursue.

Yet when appeals do occur, many succeed — further highlighting how many rightful benefits never reach review.

Oversight, Reform Pressure, and Accountability

Federal watchdogs have flagged transparency and reporting problems. The U.S. Government Accountability Office has recommended mandatory reporting of claim denials and appeals. ERISA’s Advisory Council has issued 12 recommendations, including:

• Faster urgent care claim processing
• Stronger claimant education on appeal rights
• Ensuring clinical decisions follow evidence-based standards

Millions of small plans remain exempt from key reporting requirements, creating further gaps. Even when wrongful denials are found, many cases are resolved through voluntary compliance, often without public accountability.

A System Workers Cannot Rely On Without Change

With roughly one in five in-network claims denied, millions lacking disability coverage, and fewer than 1% of denied claims appealed, the stakes are significant. Workers risk delayed treatment, mounting debt, and prolonged financial hardship.

Ultimately, the findings reinforce a simple principle: if workers are entitled to benefits, they should receive them. Stronger transparency, improved oversight, better public awareness, and fairer processes could help ensure that promise becomes reality.

For those already facing a denial, ERISA legal support — including firms such as J. Price McNamara — continues to play a critical role in helping workers recover benefits they are owed.