Merck's Laundry List

 A recent case caused Merck & Co. to go down swinging on every pitch served up by the Third Circuit when it comes to being arbitrary and capricious. 

Kosiba v.Merck & Company, 2011 WL 843927, set forth a procedural laundry list of errors by a plan administrator which would lead a court to find an administrator’s decision terminating LTD benefits to be arbitrary and capricious. 

In any other “world” but ERISA any procedural error from the following list would almost automatically call for an “arbitrary and capricious” reversal of a decision favoring an administrator, but in ERISA law, where the administrator is highly favored, such a reversal is news.

Here’s the Third Circuit list.  See if you don’t agree.

  • A reversal of benefits determination without additional evidence.
  • A disregard of opinions previously relied upon .
  • A self-serving selectivity in the use of evidence or reliance on self-serving paper reviews of medical files.
  • A reliance on the opinions of non-treating doctors over treating doctors without explanation.
  • A reliance on inadequate of incomplete investigation.
  • A failure to comply with notice requirements of Section 504 of ERISA.
  • Failure to analyze all relevant diagnoses.
  • Failure to consider claimant’s ability to perform actual job requirements.

With all of these strikes against it, one would think that the Court would automatically reinstate the claimant’s benefits without question.  Not so in ERISA.

Although the Court did restore claimant’s benefits, it took pains to declare that if the administrator had denied claimant’s “any occupation” LTD benefits from the start, it would have remanded the claim rather than reinstate her right to benefits.

How come?  Defendant had multiple swings at the ball. 

On this sorry record, why give it more?

ERISA Insurers Love Frustration

You don’t have to be overly smart to understand why ERISA insurance companies do things in the most frustrating way imaginable.

Frustration is the primary tool of the insurance companies.  If they can get a claimant thinking he or she is battling an impenetrable wall of bureaucracy, they are more than halfway home to getting the claimant to give up the claim.  And that’s where a good part of the money insurance companies make can be found.
Insurers have a wide variety of arrows in their frustration quivers:
  • They deny even the most obviously valid claims. 
  • They “lose” claimant paperwork.
  • They hire doctors who believe it is more important to keep their relationship with insurers than it is to “do no harm” when it comes to claimants.
  • They deny, deny, deny because they know that denying claims is and insurance company’s best friend.
It doesn’t take a superior intellect to know that a certain percentage of people don’t have the stomach or personality to fight with others.  So, if the insurance company denies a claim it knows that a certain number of claimants will just fold up their tents and give up.
Such conduct results in immediate cash in the insurer’s pocket.  And, after 35 years of fighting with insurance companies, we know that such an outcome is the primary goal of most insurers.
Whether you are a claimant or an attorney pursuing an ERISA claim, the one thing you have to have is “stick-to-it-iveness”.  Without it you fall prey to frustration.  Once you lose your cool, the insurance company has you right where it wants you.
To be able to fight insurers, you should be familiar with their tactics and know what to expect.  No move by them should surprise.  They will do whatever it takes to try to discourage the lawyer or the client from continuing the claim.  They will use the sometimes complex rules and law of ERISA to delay claim progress.  They know that most of us have limits that prevent clear thinking about a problem.
While many people become angry because of such conduct and vow to keep going, that very anger is also the insurer’s friend because many times anger prevents clear thinking and clear thinking is required in pursuing an ERISA claim.  Keeping an eye on the ball is difficult when you are steaming.
Stay cool and smart.  Don’t be distracted by insurance company tactics.  Pursue what is necessary to prove the elements of your ERISA claim.  
Frustrate the insurer for a change.

Housework Is Not ERISA Bar

With all of the specialized, technical ”legalese” an ERISA attorney must know to do a proper job for a client, you wouldn’t think that knowledge of cooking and laundry would play a part. But, you would be wrong.

In Hannon v. Unum Life Insurance, 2013 W L 6821263 (S.D.Ind.), Unum tried to stop LTD benefits after paying them to an ERISA beneficiary for 10 years. One of Unum’s excuses for claiming the beneficiary was no longer entitled to benefits was that she could perform certain household chores and , therefore, was not disabled.

Battling insurance companies to get sick and injured people what is due them is a time-consuming and tiring occupation. Insurance companies fight ERISA claims like the devil. They assume that each claimant is a malingerer trying to get money without working for it. Nothing could be further from the truth.

The vast majority of people want to work. They wouldn’t know what to do with themselves if they didn’t have a job to go to. So, rather than stress the relatively few who are malingerers, insurers should consider each case as if the claimant would rather work than sit at home.

In Ms. Hannon’s matter, Unum began paying benefits to Ms. Hannon, a registered nurse, in March, 2001, when she became unable to perform her duties because of chronic pain. She was diagnosed with a rare disease that affects a person’s connective tissues, joints and blood vessel walls.

All of her seven doctors had found her disabled and unable to work for more than 4 hours at a time at a sedentary job. A theater company was able to give Ms. Hannom a flexible schedule to accommodate her disability, so she took a part-time job with it as a seamstress. When Unum discovered that claimant had a part-time job it sent an investigator to find out more.

When Unum learned that Ms. Hannon performed household chores in addition to working at the theater, Unum halted her LTD payments.

Unum said that the fact that she could do housework in addition to working at a part time job made it evident that she could perform 8 hours a day of sedentary labor, so LTD payments were terminated.

The Court disagreed stating that equating the ability to do casual household work to the requirements of performing the duties of full time employment was in error. Not only is household work different, but the ability to take breaks when needed is not part of an ordinary job description, sedentary or not.

The Court noted that Ms. Hannon’s daughter helped her mother with the housework and that claimant, at home, could take breaks whenever she felt it was necessary to rest because of pain.

In agreeing with Ms. Hannon that Unum cherry-picked her doctors’ reports, ignoring their clear finding that she could do no more than 4 hours a day in a sedentary job, the Court clearly distinguished the difference in the rigors of doing housework in your own home and working for a third party employer at a place of business.

That difference seems obvious to all but an ERISA insurer.




ERISA Is An Acquired Taste

When you write a blog, you write into a void. You think you have something to say that people want to read. But, do they really? 

This is our 200th blog post. We should mark it in some way. How?
Maybe by trying to express why we blog?

Why do we write?

Because most people and many lawyers are not familiar with ERISA and disability insurance law. These people and these lawyers’ clients are usually in deep trouble when they come up against ERISA. They and their family’s future depend on the outcome.

What is our goal in blogging?

To make attorneys and clients aware that ERISA is a serious business which requires total attention to detail in prosecuting a claim. A single overlooked item is enough to sink an ERISA claim for good.

Why is ERISA such a bear?

Who likes to go into a fight to the finish in which the referee holds your opponent’s coat?
ERISA puts the right to determine the validity of a claim in the hands of the plan administrator, which is often the insurance company which will have to pay the claim if approved. Not only that, but Firestone v. Bruch, 489 U.S. 101(1989) demands that courts give deference to a plan administrator’s ruling. To overturn such a ruling a claimant must show the ruling was “arbitrary and capricious”, a very tough legal hill to climb.


We want to do what we can to give ordinary people and attorneys who have never handled an ERISA case a fighting chance to overcome the odds and establish their right to benefits when a disability strikes. Insurance companies and their lawyers fight disability claims a thousand times a day. Employees and their attorneys get only one chance to receive benefits in a difficult and convoluted legal environment.

What We Have Learned

We started practicing disability law almost 35 years ago. We learned early on that the employee, whom ERISA was supposedly designed to help, starts each case as the underdog. We learned that meticulous and accurate attention to detail is a prime requirement of the practice. We learned that alertly digging through policy language is a must. We learned that knowledge of the effects of injury and disease are required. We learned that establishing the link between a disability and consequent work restrictions and limitations are absolutely essential.
Insurance companies have the funds and the personnel required to fight ERISA claims. Employees, disabled and unable to earn, have little to fight with. What they need most is knowledgeable help with ERISA claims. We have always represented the insured, never the insurance company. We like it that way.

Fighting insurance companies is an acquired taste. We’ll never tire of it.










ERISA Trumps Common Sense

When an ERISA plan gives the administrator broad discretion to interpret the plan, the administrator has the ability to interpret claims to the point where common sense doesn’t count for beans.

The unlucky husband of an unlucky woman working for Lowe’s Companies found that out when he sued Lowe’s and its insurance company to collect ERISA life insurance benefits after his wife was killed in a car crash.

The story in a nutshell:

* Elizabeth Porter was a manager at a Lowe’s store.
* She was on her way home from work when she received a call that the store alarm had been actuated.
* Mrs. Porter turned around to head back to the store to take care of the alarm when she was blasted by another car, killing her and her unborn child.

The ERISA life insurance policy specifically did not cover an injury sustained during travel to and from work. The question here: Was Mrs. Porter’s turnaround to head back to the store travel to and from work? This fact makes the meaning of the words travel to and from work ambiguous.

In his ruling, the administrator found that Mrs. Porter was traveling to work to perform her regular job duties (ignoring the fact that she had to turn around from her trip home to go back to the store). Her Workman’s Comp claim was approved even though Comp, too, doesn’t pay for claims arising from travel to and from work. Mr. Porter sued.

In ruling in his favor, the District Court applied a common sense interpretation to the administrator’s decision, and held that the phrase applied only to her ordinary daily commute and that her turnaround to return to the store was outside of her ordinary commute.

The District Court rejected as an abuse of discretion the administrator’s finding that Mrs. Porter’s turnaround and return was “traveling to work to perform her regular job duties”. The Court therefore ordered the insurance company to pay the life insurance benefits to Mr. Porter. The insurance company appealed.

The Circuit Court of Appeals for the 5th Circuit reversed and entered judgment for the defendants, holding that when a plan gives the administrator broad power to interpret its terms, the administrator has that power even if there are ambiguities in the wording of the insurance policy. So long as there is any reasonable basis upon which the administrator’s ruling may be upheld, it is not arbitrary and capricious and must be upheld, the Appeals Court said.

This ruling means that ERISA gives a properly authorized administrator the right to resolve policy ambiguities in favor of the insurer even in the face of a very long line of insurance cases which holds just the opposite: Ambiguities in an insurance policy are interpreted in favor of an insured.

An interesting sidelight here is the Appeals Court found no conflict of interest as the administrator was not the insurance company insuring the plan. An online search, however, showed that the administrator was closely affiliated with the insurance company and probably received the financial benefits of administering many of the insurer’s ERISA plans. Wouldn’t such facts lead to a possible conflict of interest which the Court should have considered?

ERISA was billed as the “workingman’s friend” when it became law in 1974.

Sometimes it turns out to be her worst enemy.





You Only Get One Shot At An ERISA Claim

Sometimes in writing about ERISA and private disability claims we tend to get into the finer points of insurance claims law and downplay the basics, which are frequently more important in pursuit of such a claim.

The big thing to remember is that insurance companies fight these battles hundreds, if not thousands, of times a day. You have just one shot to get it right.

In this post we are going to try to outline what should be done in the ordinary case when a claim situation arises.

If you think that an injury or illness which prevents you from doing your job may develop into a longer-term disability which might trigger payments under your ERISA or private disability policy, be certain to retain all papers, reports, prescriptions, X-rays, medical and hospital bills involved in the course of that medical incident.

These materials should be maintained for a reasonable period of time if there is a possibility that this injury or illness may recur in future and lead to a claim.

Should you have to file a claim, understand that this is one of the most important parts of the claims procedure. Don’t be lazy or sloppy. The assumption by claimants that they can correct an omission or error on their claim form later, has sunk more disability claims than there are wrecks on the ocean floors of the world.

Your first claim form, if not carefully and properly completed in accord with the terms of your policy, seriously undermines your chances of collecting, even if you have a claim that seems to you indisputable!

Many insureds, because they are not warned otherwise, assume that they are providing that their application for benefits to an impartial reviewer and that their feet will not be held to the fire if they make a mistake. WRONG!!!

Many times, especially under ERISA, the very insurance company which will have to pay you benefits has the right to determine whether or not your claim is covered by their policy. (Guess which way these insurance companies lean in deciding this question?). And, to top it off, their decision is given deference by the courts.

Not only that, you can bet your bottom dollar that if your claim is ever reviewed by a court, the errors of what you omitted or misquoted on your original application will be thrown up to the court time and time again.

So, if in making an ERISA claim, you start off by omitting an important document or medical report or if your physician is sloppy in reporting the facts and nature of your disability, you can be certain that error or omission will haunt you throughout the proceeding. Get it right the first time!!!

When you are unable to work, making a claim for income, perhaps for the rest of your life, is not the time to take chances and hope for the best. You get only one bite at this apple. Make sure you put your best teeth forward!

If you have any qualms about your ability to present all aspects of your disability claim in its best and fairest light, get help from an experienced disability claim lawyer.

It is not wise to stand alone in this fight. You and your family have too much to lose.