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Protect employees from a health insurance loophole.

By Jacquelyn Lynn

Opinions expressed by Entrepreneur contributors are their own.

Employees who participate in group health insurance could beleft with a hefty tab if the insurer denies a claim. A little-knownprovision in the Employee Retirement Income Security Act of 1974,or ERISA, holds that, with a few exceptions, people who get healthcoverage through a group policy at work cannot sue their insurancecompanies under state law, and their options under federal law arelimited, says Arnold Levinson, an attorney and partner at Pillsbury &Levinson LLP in San Francisco.

"Under federal law, the insurance company gets to decidewhether your claim is paid or not, and they don't even have tobe right," Levinson says. "All they have to do is showthat they were not arbitrary and capricious. While you might beable to sue in federal court, you can't win unless you provethe insurance company [was] arbitrary and capricious."

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