One thing that has really galled us through our years practicing ERISA law is the way many courts seemed to assume that disabled ERISA claimants have a propensity to fake disabilities while ignoring the clear motivation for ERISA insurance companies to do the same.
A recent decision, Eisner v. The Prudential, 2014 WL 244365 N.D.Cal, opened the fallacy of this judicial tendency to the light of day, when it said:
“…Claimants have an incentive to claim symptoms of a disease they do not have in order to obtain undeserved disability benefits. But the claimants are not the only ones with an incentive to cheat. The plan with a conflict of interest also has a financial interest to cheat. Failing to pay out money owed based on a false statement of reasons for denying is cheating, every bit as much as making a false claim.”
Thankfully, this tendency has been moderating in the last few years, particularly since Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008). Glenn allowed claimant’s ERISA attorneys to dig a little deeper into the motives and methods insurance companies use to deny claims.
The endemic chicanery uncovered by claimant attorneys under the authority of Glenn,
has led many courts to question the bona fides of insurance company ERISA claim denials. These courts now require substantive proof before upholding an insurance company denial of benefits.
As a result of Glenn, courts learn more and more that just because an entity is big and in business, it should not be assumed that it is honorable and conducting itself in a manner in which its judgment should be more trustworthy than an individual party.
Employees are suspect because if they can successfully fake a disability under ERISA they can get 60% of their salary without having to work. But, insurance companies also have this “something for nothing” motivation to deny valid claims. They get “something for nothing” when they wrongfully collect premiums but deny claims and pocket benefits which rightfully belong to insureds.
While employees act individually when cheating, insurance companies organize their efforts. They have been known to tie how much they pay an employee to the number of claims the employee denies, use doctors who depend for their living solely on the insurer to “independently” examine claimants, and to demand claimants provide medical proof that is impossible to provide, according to medical authorities.
This organized conduct on the part of insurance companies is the reason we object to courts giving companies a “pass” while scrutinizing employee claims with a magnifying glass. Now, with Glenn, the truth is becoming apparent and courts are taking a good, hard look at the bases for insurance denials.
Thank you Glenn.