No Mulligans For Insurance Companies

We have just read an appellate court analysis of a technical legal point which carries with it a pressing human consideration under ERISA disability claims..

The legal issue is whether some appeals of ERISA rulings are actually ripe for appeal. Or, should they be dismissed because the remand order of the Federal District Court below was not a “final order”.

The foundation for refusing to rule on such disputes is that an appeals court will generally not hear an appeal unless it is an appeal of a final order or judgment, in which all issues of the dispute below have been adjudicated. Appellate courts generally do not want to make decisions on only portions of a case, leaving other issues unresolved so that the court may have to deal with a later appeal in the same case.

This approach may be OK for cases which do not involve ERISA disability income claims. In ERISA disability cases, an insurance company administrator usually controls the decision in the matter. Knowing the appellate court aversion to ruling on a less than final order, the administrator may find it advantageous to “pingpong” his decision by failing to set forth completely the reasoning for the administrative decision. This would likely cause the hearing court to send the matter back to the administrator to complete the record.

This can lead, as it did in Gerhardt v. Liberty Life Assur. Co. of Boston, U.S.App.LEXIS 16170 (8th Cir, 2009) , to rejecting the appeal of a remand by the District Court because the administrator failed to consider all of the issues in deciding to reject the disability claim.

But, as another court has said, if the process of granting remands becomes routine when an administrator fails to present a complete case, it would allow “Mulligans” to sloppy administrators at the expense of both courts and disabled claimants.

In fact, we are certain, if insurance companies realize that this ploy would add substantial time and expense to a claimant’s burden, we know they will use it to the fullest extent.

We agree with Chicago attorney Mark D. Debofsky who brought this case to our attention in the August issue of his DISABILITY E-NEWS ALERT – “If a claim decision is defective, the claimant deserves an award of benefits.”

Let’s not allow insurers use a racket to play ping pong while claimants in physical and economic pain are forced to follow the bouncing ball.

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