Stay Awake In ERISA

There is no way an ERISA claimant can ease up on the pressure while pursuing an LTD claim, hoping that matters will take care of themselves. Despite setbacks and claim denials, the claimant must be certain to meet all time constraints required by the terms of ERISA plan documents, insurance policies and rules and regulations.

This overriding importance of claimant conduct was reemphasized in the recent case of Engleson v. Unum,2013 WL 3336741 CA 6 (Ohio) (NO. 21-4049), in which a disability case with a long history was finally dismissed because the plaintiff failed to file an appeal within the 3-year period permitted in his ERISA plan.

Despite having filed two denial appeals in 2001 with Unum, Mr. Engleson’s claim remained dormant until 2008 when he felt his condition became so severe that he refiled for LTD benefits. He wanted the Court to consider his claim as an appeal of the prior denials which Unum issued in 2001, declaring that benefits had been wrongfully denied at that time. He further alleged that he was not given a full and fair review of his claim in 2001.

The District Court dismissed his suit holding that the 3-year contractual limitation had expired and he could not bring such a suit.

On appeal Mr, Engleson claimed he was entitled a ruling that the contractual limit should be tolled under Cigna v. Amara, 131 S. Ct. 1866 (2011), but the appellate court disagreed, finding no facts upon which to consider tolling the 3-year time limit on appeals.

To illustrate its point, the Court reviewed the facts in  Calanderia v.Orthobiologics, 661 F3d 675 (C.A.1 Puerto Rico) 2011), a case in which the claimant actively twice asked for and received copies of the ERISA plan documents to which he was subject. At the time he received them the plan had no time limit on filing a suit after a denial.

A week after the last time the plan was disclosed to Mr. Calandria, the plan was changed to require that a claim to the court be filed within one year of the date of occurrence. Plaintiff had received no notice of this change from his employer and reasonably believed that the statute of limitations on his claim was 15 years.

Since this policyholder had tried to stay abreast of his claim rights and had not been advised of a critical change in his policy rights, the 1st Circuit held that the 1-year limitation on the right to appeal should tolled and allowed Mr. Calandria to file his claim.

The ERISA lesson in Calandria: Don’t sleep on your rights!






Leave No ERISA Stone Unturned

Representing ERISA claimants requires an attorney to start at the very beginning and go careful step by careful step to the end. Nothing is to be assumed. An attorney has to make certain that the plan structure and all actions taken pursuant to it by the administrator have been done properly and only as authorized by the plan and ERISA law.

A recent decision, Gaines v. LINA, 2013 WL 677886 (N.D.Ill.), clearly illustrates this point. The issue in the case was whether the court would apply the de novo standard of review or whether it would give deference to the claim denial issued by the insurer, LINA.

If de novo, the Court could hear evidence and decide the matter based upon the preponderance of the evidence presented. If the Court had to give deference to LINA’s denial of benefits, the Court could only consider the record and could overturn the denial only if it found, based on the record, that the denial was “arbitrary and capricious”, a very tough obstacle for a denied claimant to climb.

The ERISA plan documents showed that the employer and the plan administrator had authorized the claims administrator to utilize its discretion in deciding claims. If properly set up, this would force a court, under Firestone v. Bruch, 489 U.S. 101 (1989), to give deference to the denial of the claim.

The problem for the employer in this case was that the plan document relied upon to authorize administrative discretion gave “Cigna” not “LINA” the authority to exercise discretion. Therefore, the Court held, since only Cigna was authorized to exercise discretion, LINA had no authority to do so and the case would be heard de novo.

In making this ruling, the Court followed a line of cases which held that when an unauthorized body without fiduciary discretion to determine disability benefits denies an ERISA LTD claim, the claim will be reviewed by a court on a de novo basis.

Sometimes in the jungle of ERISA plan language and the thicket of insurance policy terms the insurance company and the employer stumble and the claimant gets a break. You can be sure it doesn’t happen too often, but when it does, it is cause for a celebration.

We’ll drink to that.



Relying On SPD In An ERISA Claim Is A "No-No"

An ERISA SPD (Summary Plan Description) is supposed to help employees understand the insurance protection they have from their employer by explaining that protection in plain English.

However, since the SPD is compiled by a person who may or may not have the needed abilities to read, understand and transcribe in plain English the complex language of an ERISA plan and its underlying insurance policies, the SPD may very well contain errors, misinterpretations and may even omit important requirements.

To rely only on the information in an SPD in making an ERISA claim is to court disaster. Proof of this is in Cigna v. Amara, 131 S. Ct. 1866 (2011), which holds that even when an SPD provides incorrect information, a claimant has no right to rely upon it. Only what is actually in the plan controls.

ERISA claims are dependent solely on the terms of the ERISA plan specific to each employer, regardless of what the SPD says. The plan has to conform to strict Federal regulations modified only by case law which pertains to ERISA.

The one consistent rule is that the specific terms of the employer’s plan itself are the only reliable guidelines for evaluating an insurance claim under an ERISA plan.

The result is layer after layer of complex, many time obtuse “legalese”, inserted in the plan by people who know exactly what they are doing. To most people, including some lawyers who don’t practice ERISA law, the plan may as well be written in a foreign language.

To determine whether an employee’s claim is covered by an employer’s ERISA plan, one must first read and understand the plan and the accompanying insurance policies. Only if the claim is covered by the plan will the claimant have a shot at succeeding.

In most cases an employee will never have seen a copy of the plan. He or she may not know where to find one. ERISA requires employers to furnish an employees with a copy of the ERISA plan when asked.

If circumstances are forcing you to think you might have to make an ERISA claim, getting a true copy of the plan and the insurance policy associated with it, should be your first order of business. Most employers make them available through their Human Resources departments. uman Resourcersd departmentsd.

When you get the necessary documents, if the language is a bit much or you think you don’t have the expertise, get help from a lawyer, preferably one who has experience with ERISA claims.

The SPD is OK for giving you a general overview of the ERISA coverage afforded you by your employer.

But, when matters turn serious, rely only on the terms of the ERISA plan and the insurance policy which supports it. To do otherwise may do you great harm.