Labor Day is an appropriate time to think about the nation’s working people and what ERISA disability plans mean to them.

There are about 140,000,000 of you covered by some sort of ERISA plan. ERISA was conceived to help a worker have some protection if he or she became sick or injured and couldn’t work. It was passed by Congress in 1974 when the Congress was a functioning body that took its obligations seriously.

Even though it affects some 140,000,000 in a basic way, legislation similar to ERISA wouldn’t get a “look-see” in the legislature in Washington today.

The system is simple. When employers need workers, they offer employees benefits to try to lure them and to keep them. One of these benefits is usually disability insurance to cover part of the loss of income if a worker is hurt and can’t do the job. ERISA disability insurance is a system beneficial for both the employer and the employee at the time an employee is hired.

After that, though, it becomes a contest. On the one hand you have the employer offering disability benefits and on the other you have the employer wanting to pay as little as possible for those benefits so as to retain as much money as possible for profit.

It is difficult to reconcile these positions without strife. Add an insurance company to the mix and the strife becomes war. Not only does the employer want to spend as little as possible for employee benefits, but the insurance company is also looking for profits for itself.

The nature of such a relationship is conflict pure and simple. There is no way around it.

People have differing views of how and when they become disabled. Some can take more pain than others. Some have differing views of their obligation to their employer. Some are out-and-out fakers looking for benefits. So claimants run the gamut of entitlement to benefits.

Insurance companies on the other hand have only one goal - they want to make profits. They have shareholders, executives and employees, all of whom want to make as much as they can. The only way for them to operate is how to think of more and better ways to deny claims.

We understand their point of view, but we weigh it against the hardships caused employees when wrongfully denied benefits they and their families need to stay alive. Taking all of this into consideration, we think equity comes down on the side of the employee.

When you are unfortunate enough to have a disability income claim, you are facing a Goliath with armies of lawyers, adjusters and others experienced in fighting disability claims. These denial experts are backed up by a stable of doctors who never saw a claim they couldn’t belittle or ignore. Employers can take care of themselves or have monster insurance companies do it for them.

Employees have no one unless they find a veteran ERISA attorney, experienced in the disability wars. Insurance companies have all the help they need. We go for the underdog.

So, on this Labor Day, we salute all who work for a living. Without you, there is no gross domestic product.  In fact, there is no product at all.

Enjoy Labor Day. You have earned it.


Let's Share the Cake


Federal judges are quickly wising up to the tricks of the trade used by insurance companies to deny disability income claims. The penchant of many insurance company medical examiners to disregard valid first-hand evidence of disability, while themselves relying on medical reports and other “long-distance” diagnoses in making decisions, is receiving less and less support from the courts.


One trick the courts seem to really have caught onto is the Social Security Disability “scam”. While flooding Social Security with practically every group long term disability claim on their books, insurers consistently disregard the Social Security findings of disability whenever it suits them.

The way it works is that the insurance company will force a disabled group policyholder to file for SSDI benefits with the Social Security Administration by threatening to cut off their disability benefits if they don’t. The insurer will even supply an attorney to handle the claim for its policyholder. Seems like a generous move, eh?

Not so. If the SSDI claim is successful, the insurance company gets to deduct the amount of the SSDI payments from the claimant’s insurance company benefit payments, a definite plus for the insurer. But, does this affect how the insurance company looks at the claimant’s benefits claim? In a great many cases, not at all!

In reviewing and deciding disability under the terms of its own policy, companies many times pay little or no attention whatsoever to the SSDI decision (while accepting the benefits of reducing their claims payments). In other words, they are saying, “We’ll accept the SSDI judgment that the claimant is disabled (and take the money), but not when we have to decide if the claimant is disabled under the terms of our policy”.

However, since the decision in Metropolitan Life Insurance Company, et al v. Glenn, 128 S. Ct. 2343 (2008), recognizing the inherent conflict of interest when an administrator who makes the decision in a  disability case is the same entity which would have to pay the claim, courts are more and more giving weight to the SSDI decision in determining whether an insurance company refusal of disability benefits was proper.

Insurance companies have had their cake and ate it for far too long. It’s time disabled policyholders get their fair share.

For recent decisions on this issue:

          Barteau v. Prudential Insurance Co.,2009 WL 1505193 (C.D.,Cal.) 


         MacNally v. LINA, 2009 WL 1458275 (D.Minn.)