Health insurance claim denials are on the rise, creating new challenges for patients, employers and plan sponsors. Behind many of these denials are layers of administrative complexity—such as prior authorization requirements, coding errors and insurers’ cost-cutting tactics that often block or delay payment for legitimate medical services.
In 2023, nearly 20% of claims submitted to insured healthcare exchange policies were denied, the highest rate recorded since 2015. The rate of claims denial is even higher for employer-sponsored plans, estimated by Kaiser as 21% – where “denial” is broadly defined to include: denied claims, network adequacy issues, preauthorization delays and denials and other actions. Many of those denials come from inadequate paperwork, ineligible expenses, and other factors. Some can be cured by resubmitting the claim.
For employers and self-insured plans, this trend leads to increased administrative work, delayed or denied treatment, higher out-of-pocket costs and strained relationships with healthcare providers. Adding to the problem, many patients are unaware of their right to appeal, allowing wrongful denials to go unchallenged.
Why Denials Hurt Employers and Plan Sponsors
Health insurance denials carry real financial and operational consequences for employers and plan sponsors. First, they drive up costs. When claims are denied, surveys show that the burden often shifts to employees to appeal the denial, or to shoulder increased costs through balance billing or out-of-network charges. Among insured adults who had a problem with their health insurance in the past 12 months, most (78%) say they have taken some action to try and resolve the problem – 53% said they contacted their insurance to resolve the problem, and 45% said they contacted their doctor or medical provider or someone on their staff. About one in five insured adults who had a problem with their insurance said they asked family or friends for help (22%), while a similar share say they changed doctors (20%). One in ten said they filed a formal appeal. This not only increases the direct costs for the health plan but also raises the risk of employees facing unexpected medical bills.
Beyond the financial impact, repeated denials erode employee trust. Navigating appeals, handling surprise bills and dealing with unclear coverage terms leave employees frustrated and dissatisfied with their benefits.
Operationally, denials demand significant time and resources. Human resources teams and plan administrators are forced to intervene, managing appeals, coordinating with providers and resolving disputes—all of which pull focus from other priorities. Over time, this added strain can weaken internal processes and affect overall plan efficiency.
Taken together, unchecked claim denials create a cycle of higher costs, lower employee morale and increased administrative burden—all of which threaten the long-term sustainability of employer-sponsored health plans.
aequum’s Comprehensive Strategy for Managing Denials
aequum’s mission is to protect self-funded plans, plan sponsors and participants from the financial impact of improper claim denials. aequum offers a multi-pronged approach focused on legal advocacy, cost recovery and dispute resolution:
- Claims Dispute Resolution
aequum’s legal team actively challenges inappropriate denials, defending plan members and working with providers to ensure valid claims are resolved quickly and fairly. - Overpayment Recovery
aequum identifies instances of overpayment and recovers excess amounts, ensuring plans are not burdened by errors or inflated charges. - Legal Advocacy
Leveraging deep legal expertise, aequum advocates on behalf of plans and participants, protecting them from unjust billing practices and defending against excessive provider charges. - Transparent Results
Through detailed reporting on claim outcomes and resolution timelines, aequum provides clear, actionable insights to help employers better manage healthcare costs.
Taking Control of Denials
Employers and plan sponsors can no longer afford to remain reactive in the face of increasing health insurance denials. Each denied claim not only adds financial strain but also undermines employee trust and benefits plan sustainability. The key to managing this challenge lies in proactive engagement—identifying patterns, understanding insurer tactics and intervening effectively.
Partnering with aequum provides the legal expertise and strategic support necessary to protect your plan. Through targeted claims defense, recovery of overpayments and clear reporting, aequum empowers organizations to control costs, reduce administrative burdens and ensure fair, timely outcomes for employees.
Contact aequum today to learn how we can help defend against unjust denials and keep healthcare costs under control.