Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

What a lovely gift for insurance companies!

There’s going to be a Congressional investigation of SSDI brought on by charges that an SSDI judge ruled in favor of applicants 99.7% of the time. The fact that the judge is only one of 1500 judges in the SSDI system will be of little significance to the investigators.

The majority of House Republicans, seem to be salivating at the opportunity to ravage the Social Security system as we know it, and to turn it over to private insurance companies. With Republicans holding a large majority in the House, they will have a field day with hearings on this issue.

Insurance companies are certain to jump on the bandwagon because of the ongoing question of what weight courts should give an SSDI finding of disability on ERISA and private disability income insurance claims they are considering. Successful SSDI claimants want the SSDI judgment to weigh heavily in an ERISA disability case, while insurance companies generally ignore SSDI findings (even though they usually have forced claimants to apply for the SSDI disability benefits).

Group LTD insurers get the best of both worlds when a claimant wins in SSDI:

* Insurance companies get the first money from the claimant’s SSDI benefits and repay themselves the money they have already paid the claimant under the terms of their policy.
* Insurance companies then completely ignore the SSDI finding of disability while defending the claimant’s case under their disability policy.

A 99.7% success rate in an adversarial litigation system should raise the strongest suspicions. It certainly requires severe “looking into” and remediation. But, it shouldn’t negate the value of an SSDI decision as part of the evidentiary fabric in an ERISA disability case.

We have a suggestion to help a Federal judge decide. Have the SSDI judge’s scorecard of disability decisions supplied to the court with the SSDI judgment. This will give the trial court a good handle on any predispositions the SSDI judge may have and make it easier for the trial judge to value of the SSDI judgment in ruling on the case before it.

But, at the same time, the court should be supplied with a scorecard on each doctor in the insurer’s stable of “physicians” who has rendered an opinion about the claim before it. In what percentage of cases in which the particular insurance company doctor ruled did the physician find the claimant had a disability? Such scorecard information would also afford the court a better picture of the value of the insurance doctor’s opinion.

After all, what’s sauce for the goose is sauce for the gander.

A court having the benefit of knowing if either or both an SSDI judge and/or an insurance doctor had a predisposition, would certainly help a judge weighing the factors in coming to a decision, as required by the Supreme Court in MetLife v. Glenn, 128 S. Ct.2343 (2008).

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A recent decision of the 7th Circuit Court of Appeals underscores a couple of issues of interest to ERISA claimants and attorneys:

* You just can’t “wing’ it when your legal right is created by a statute.
* Even a seemingly minor procedural miscue by a claimant can get the claim booted out of court, with prejudice.
 

In Edwards v. Briggs & Stratton,2011 WL 1602061, a claimant was 11 days late in filing her disability appeal with her plan administrator even though there had been ongoing communication between her and the administrator. The administrator rejected her appeal on “lateness” grounds and the Federal District Court and Seventh Circuit agreed, taking the position that the failure to file on time constituted a failure to exhaust administrative remedies and dismissing the case with prejudice.
 

We are all familiar with attorneys advertising their experience in their particular practice area, and why clients need that experience. Some of those claims are valid and some are pure advertising hype. The Edwards case demonstrates that such a claim is valid in ERISA matters.

In Edwards, the court found that Ms. Edwards made several procedural errors which “deep-sixed” her claim. She was late in advising that she intended to appeal, and also in providing certain information required for her claim. Although, it might seem obvious to an ordinary observer that she was appealing a decision of the plan administrator, she did not make her intentions absolutely clear, with this “wiggle” room, the administrator and, ultimately, the court, found that she had not actually appealed within the time frame required by Federal regulations, and, therefore, she had failed to exhaust her administrative remedies. The court dismissed her claim with prejudice.
 

Although the court could have exercised discretion and give her some leeway since she was only 11 days late in providing what the court was looking for, the court withheld its discretion and dismissed her case with prejudice.
 

This case illustrates that ERISA law is one of those areas in which experience is generally a “must”. ERISA disability claims are created by statute. ERISA regulations promulgated by the Department of Labor along with the statute itself, cover thousands of pages in the United States Code and the Code of Federal Regulations.
 

It is a “picky” law which starts off giving the plan administrator deference in decisions. We have to assume that administrators will always give themselves and the plan the benefit of doubt, so a claimant a starts off behind the 8-ball.
 

Add to this the regulatory time limits and other technical requirements which must be met to pursue a claim, and it’s easy to see how those, unfamiliar with the timing and format of claims, can trip over the requirements. And, once they trip, as shown in Edwards, they may be out forever.

Much about ERISA is counterintuitive, so just exercising sound, common sense judgment, will not always win the day for a claimant. We don’t mean to enshrine ERISA claims work in some kind of voodoo mysticism, but we do mean to point out that ERISA practice requires more than a cursory reading of a few sections of the ERISA statute and regulations to become proficient.

If one prosecutes ERISA disability insurance claims, one needs a decent knowledge of other statutes which affect claims, such as HIPPA and COBRA. Experience and a good working knowledge of general insurance law are also a plus. It is not enough to just prove a medical disability in a disability income insurance matter. The claimant must also show that the disability prevents the claimant from performing the duties of his or her usual occupation. Sometimes the policy will require proof that the claimant is unable to perform the duties of almost any occupation.

As the Edwards decision shows, ERISA litigation should not be a hit or miss undertaking, where a claimant or an attorney can read a few cases to “get the feel of it” and then go winging along to a successful conclusion.

What you don’t know about ERISA can kill your claim. Just ask Augusta Edwards.

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As anyone who practices in the area of disability law can attest, employees who become disabled are reluctant to admit they are disabled, and instead try to “suck it up” and carry on, even when their condition gives them very little hope of ever being able to permanently keep working. We’ve written about the “working disabled” before, but not in the context of O’Hara v. National Union Fire Insurance, 2011 WL 405448 (C. A.2 (N.Y.))).

O’Hara clearly illustrates that because a disabled employee continues to try to work, does not mean that employee will automatically be denied disability insurance benefits. This court clearly states that an employee’s continued presence at their place of employment does not preclude a finding of disability, if there is evidence he or she was actually incapable of performing the job.

This important principle needed to be reaffirmed. Disability carriers latch on to the fact that an employee tried to carry on despite the disability, to justify the denial of benefits.

In O’Hara, a company administrative assistant suffered a head injury in a fall. She was treated by several neurologists following the fall on March 15, 2001, but she continued to work.

As with all policies, Ms. O’Hara’s LTD policy had limiting language which defined whether she was eligible for long term disability. As with all policies, the language was not simple. She could recover if as a result of an accidental injury she was totally and permanently disabled and prevented from in engaging in each and every occupation or employment for which she was reasonable qualified by reason of education, training or experience. In addition, the policy required the disability to manifest itself within one year of the accident and to continue for a year.

Ms. O’Hara, while working, told her treating doctors it was necessary for her to make notes at work and at home so she could be able to remember the things she had to do. Also during this period, several of her coworkers complained to her superiors that she was behaving unprofessionally. However, her employer did not terminate her until June 6, 2002.

All during this period, Ms. O’Hara reported continuing headaches and severe memory lapses to her doctors, and was found by her own treating neurologist to be “completely disabled”.

Although the Federal District Court granted summary judgment to the insurer on a motion for summary judgment, the appeals court sent the case back for trial saying that the fact that Ms. O’Hara worked after the injury does not automatically mean that she was not permanently disabled by the accident. The appeals court found much in the record to support her contention that she was actually disabled even though she went to work. The appeals court found that the District Court had erred in granting summary judgment while there were major facts in dispute and that a trial and findings of fact by the trial court were necessary.

Insurance companies and courts should realize, as the 2nd Circuit did in this case, that disabilities are not necessarily fully developed when they first strike. Many illnesses and injuries take time to develop the full extent of their impairments.

Further, many employees are not anxious to go on disability and resist it for as long as they can. As a matter of public policy, employees should not be penalized for doing so – they should be praised.

If insurers jump on every employee who tries to work through their injury and deny benefits because the employee tried to work, insurers will be hurting themselves because they will discourage claimants from trying to work.

The decision in O’Hara sends a clear message to carriers that such conduct will no longer be accepted unless the evidence in the case justifies it.

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