Your Rights When Insurance Denies Your Claim: A State-by-State Guide

What Are Your Rights When Insurance Denies Your Claim?

If your health insurer denied a claim, you have three legal rights that apply in every state:

The right to a written explanation. Your insurer must tell you, in writing, the specific reason for the denial and the specific plan provision or clinical criterion it relied on.
The right to an internal appeal. You have at least 180 days from the date of the denial notice to ask your insurer to reconsider.
The right to an independent external review. If the internal appeal fails, an independent physician reviewer outside the insurance company decides your case, and that decision legally binds your insurer.

These rights come from the Affordable Care Act’s internal claims and appeals requirements, codified at 42 U.S.C. §300gg-19 and implemented at 45 C.F.R. §147.136. They apply to virtually all non-grandfathered health plans — marketplace plans, most employer plans, and individual coverage.

They matter because appeals work. According to federal and state regulator data, roughly 50 percent of internal appeals and roughly 45 percent of external reviews end with the denial overturned. Yet fewer than 1 percent of denied claimants in the federal marketplace ever file an appeal. The overwhelming majority of denials are never contested — and an uncontested denial is simply final.

Your Federal Rights, With Citations

The Affordable Care Act: appeals and external review

The ACA established a uniform floor of appeal rights nationwide. Under 45 C.F.R. §147.136, your plan must:

Give you at least 180 days to file an internal appeal after an adverse benefit determination.
Decide urgent care appeals within 72 hours, pre-service appeals within 30 days, and post-service appeals within 60 days.
Provide you, free of charge and on request, the full claim file — including the internal clinical guidelines, medical necessity criteria, and any expert reviewer reports used to deny you.
Have the appeal reviewed by someone who was not involved in the original decision and who does not report to the person who made it.
Continue coverage during the appeal of an ongoing course of treatment.
Offer an independent external review whose outcome is binding on the plan.

The external review deadline is the one people miss: you generally have four months (120 days) from the final internal denial to request external review. Expedited external review is available concurrently with an internal appeal when delay would seriously jeopardize your life or health.

ERISA: your rights under an employer plan

If you get insurance through your job, your plan is likely governed by the Employee Retirement Income Security Act. ERISA’s claims procedure regulation, 29 C.F.R. §2560.503-1, gives you the right to:

Request the entire administrative record — plan documents, the summary plan description, claim notes, reviewer credentials, and the criteria applied.
Receive a denial notice that identifies the specific plan provisions relied on and describes any additional information needed to perfect the claim.
Sue in federal court under 29 U.S.C. §1132(a)(1)(B) after exhausting the plan’s appeals.

One critical ERISA rule: if a plan fails to follow the required procedures, you may be deemed to have exhausted your remedies and can proceed directly to court. Another: courts generally review only the record built during the administrative appeal. Put every piece of evidence into your internal appeal — you usually cannot add it later.

Self-funded employer plans are exempt from state insurance law, which means your external review runs through the federal HHS-administered process rather than your state’s. Your summary plan description states whether your plan is self-funded.

The No Surprises Act: balance billing and emergency care

Effective January 1, 2022, the No Surprises Act (42 U.S.C. §300gg-111 et seq.) prohibits balance billing for emergency services, for out-of-network care delivered at an in-network facility, and for air ambulance services. You owe only your in-network cost share, and that amount must count toward your in-network deductible and out-of-pocket maximum. The law also grants an external review right for No Surprises Act determinations even in plans that are otherwise exempt. Our full breakdown is here: The No Surprises Act: What It Means for Your Medical Bills.

Mental health parity

The Mental Health Parity and Addiction Equity Act (29 U.S.C. §1185a) requires that limits on mental health and substance use treatment be no more restrictive than those on medical and surgical care. If your behavioral health claim was denied on grounds — visit caps, tighter prior authorization, stricter medical necessity criteria — that would not apply to a comparable medical claim, that is a parity violation and an independent basis for appeal. You have the right to request the plan’s comparative analysis of nonquantitative treatment limitations, which plans must produce on request.

External Review Rights, State by State

Here is the single most important fact about external review: every state has an external review process. There is no state where a fully insured plan can deny you an independent review. What varies is who runs it and the fine print around it.

States fall into three categories:

State-run programs. Most states operate their own external review process meeting the NAIC Uniform Health Carrier External Review Model Act standards. Your state insurance department assigns an Independent Review Organization (IRO) and manages the case. States including California, New York, Texas, Illinois, Ohio, Pennsylvania, Florida, Michigan, and Washington run their own programs.
HHS-administered federal process. If your state has not established a compliant process, the federal government runs external review for you through the HHS process administered by MAXIMUS Federal Services. This is the default backstop, and it is why no insured person falls through the gap.
Private accredited IRO process. Some plans — particularly self-funded employer plans — contract directly with accredited independent review organizations under federal rules.

What genuinely differs by state:

The filing window. The federal floor is four months from the final internal denial. Some states are more generous. A handful compress the window, so check your denial letter, which must state your deadline.
Whether you must exhaust internal appeals first. Most states require it; several allow you to go straight to external review in urgent cases or when the insurer misses its own deadline.
Filing fees. Most states charge nothing. A few permit a nominal fee, typically capped around $25 and waived for hardship.
Minimum claim thresholds. A small number of states set a minimum dollar amount for eligibility.
Scope. Every state covers medical necessity and experimental/investigational denials. Some also cover rescissions and out-of-network determinations.
Decision deadlines. Standard external reviews are typically decided within 45 days; expedited reviews within 72 hours.

To find your state’s exact rules, contact your state Department of Insurance — every state has a consumer assistance line, and their staff will tell you the filing deadline, the form, and whether a fee applies. Your denial letter is also legally required to include external review instructions and contact information.

State laws that go beyond the federal floor

Many states have layered additional protections on top:

Step therapy override laws now exist in the large majority of states, requiring insurers to grant exceptions when the required drug already failed, is contraindicated, is expected to be ineffective, or when you are stable on your current therapy.
Prior authorization turnaround laws cap how long insurers may take — often 72 hours for standard requests and 24 hours for urgent ones.
Gold-carding laws in states such as Texas exempt high-performing physicians from prior authorization entirely.
Continuity of care laws require insurers to keep covering ongoing treatment for a transition period when a provider leaves the network.

How to Exercise Your Rights: The Sequence

Read the denial notice and record two dates — the internal appeal deadline (at least 180 days out) and the external review deadline (typically four months after the final internal denial).
Request the full claim file in writing. Federal law entitles you to the clinical criteria, the reviewer’s credentials, and the internal guidelines applied. Ask for all of it. Appeals are won by rebutting the specific criterion cited.
File the internal appeal in writing with a letter of medical necessity from your physician, your treatment history, and supporting peer-reviewed evidence. Address the stated denial reason directly and point to the plan language that covers your care.
Request expedited review if delay endangers your health. Say the word “expedited” explicitly and have your doctor document the urgency; the clock drops to 72 hours.
File for external review within four months of the final internal denial. The IRO decision binds your insurer — if the reviewer rules for you, your plan must pay.
File a complaint with your state insurance department if the insurer misses deadlines or refuses to produce the claim file. Regulators take procedural violations seriously.

Frequently Asked Questions

How long do I have to appeal an insurance denial?

You have at least 180 days from the date of the denial notice to file an internal appeal, and four months (120 days) from the final internal denial to request an external review. These are federal minimums under 45 C.F.R. §147.136; some state and plan rules are more generous. Missing the deadline is the most common way a winnable appeal is lost.

What percentage of insurance appeals are successful?

Roughly 50 percent of internal appeals result in the denial being overturned, and roughly 45 percent of external reviews are decided in the patient’s favor. Success rates are higher when the appeal includes a letter of medical necessity and directly rebuts the specific clinical criterion cited in the denial.

Can I sue my insurance company for denying a claim?

Yes, but generally only after you exhaust the plan’s internal appeals. For employer-sponsored coverage, suits are brought under ERISA at 29 U.S.C. §1132(a)(1)(B), and courts usually review only the evidence in the administrative record — which is why you must submit all supporting documentation during the internal appeal. For individual and marketplace plans, state contract and bad-faith law may also apply. Because external review is free, fast, and binding, it is almost always the right step before litigation.

Does every state offer external review?

Yes. Every state provides access to independent external review. Most states run their own program; where a state has not established a compliant process, the federal HHS-administered process applies. Self-funded employer plans use the federal process or a contracted accredited IRO. There is no state in which an insured person is left without an independent review right.

What if my insurance company misses its own deadline?

If your plan fails to comply with the federal claims procedures, you may be treated as having exhausted the internal process and can proceed directly to external review or, under ERISA, to court. Document every submission date and delivery confirmation, and report the violation to your state Department of Insurance.

How AskBenji Helps

Knowing your rights and exercising them are different problems. The second one requires reading the plan language, matching your situation to the right regulation, and writing an appeal that rebuts the insurer’s stated criterion point by point.

AskBenji does that for free at askbenji.co/denial. Upload your denial letter and within minutes you get a plain-language explanation of why you were denied, the specific federal and state provisions that apply to your case, the deadlines that govern it, and a ready-to-send appeal letter written in your own voice.

Documents are processed ephemerally and deleted after 24 hours. No PHI is stored, no account is required, and it is free.