Erisa, Life, Health, Disability and LTC After 30 Years in the Claims Trenches
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:
When forced to file an ERISA disability claim, ego can become one of your biggest problems.
It’s not even your ego that gets in the way. It may be the ego of your lawyer or doctor or both. The two professions frequently look down their noses, one at the other, and you may suffer because of it.
ERISA disability insurance cases require the utmost cooperation between the medical and legal professions. Time limits on supplying information are strictly enforced. The connection between the injury or illness and the patient’s ability to perform his or her occupation must be firmly established. All of this must be accomplished without live testimony and strictly within the framework set out by the client’s employer’s administrative plan and the terms of its insurance policy.
There is no room in this equation for “one-upsmanship” between professionals. The strict rules of ERISA demand that the claimant’s professionals act in a cooperative manner to present the best case for you.
Nothing in ERISA is taken for granted. Not only must the medical basis of the disability be clearly established, but how the disability causes the client’s inability to perform an occupation must also be made plain. Every part of the proof required by the plan and the policy terms must be presented clearly in the original claim documents. There are few “do-overs” in ERISA.
The lawyer and the doctor are the final “word” in your case. Unfortunately, neither profession is accustomed to checking with or answering to the other, and neither particularly trusts the other. But, ERISA claims absolutely require such cooperation to give you any chance to succeed.
ERISA is different from any other area of law, even Social Security, with which most people associate ERISA. Attorneys who have spent a large part of their career reading ERISA plans and insurance policies, should be best able to know what is important to include in your claim submission and to “captain” your claim “ship”.
Likewise, physicians are best qualified to make physical and mental findings in medical reports which are essential to any disability claim.
When an ERISA attorney suggests to your doctor that certain details regarding limitations or restrictions be included in the Attending Physician Statement (APS), it is not a reflection on the physician’s ability. It is a suggestion, based on the lawyer’s prior experience, that the document be clarified because it is required by the terms of your ERISA plan or insurance policy.
If your attorney can help your doctor write an honest, truthful report that better fits the requirements of ERISA, the lawyer should do so. Neither professional should take umbrage at such a request.
Each professional should treat the other with respect for their professional standing and their time and defer to the other’s area of expertise. ERISA lawyers may not be doctors, but they tend to know a lot more about ERISA requirements than doctors do. Each professional should keep in mind that their primary obligation is to your needs as a ERISA disability claimant. There is no room for professional prejudices.
Each professional must listen to the suggestions of the other in presenting their area of expertise and must act accordingly when appropriate to do so.
When you are sick or injured, out of work and facing a bleak future, you deserve nothing less.
When is it time to give up the ghost when you are suffering severe pain or serious restrictions on your ability to do your job? The time is when you are suffering severe pain or those restrictions.
A recent opinion in an SSDI case reinforced this conclusion, Garcia v. Colvin, 2103 U.S.App.LEXIS 25452 (7th Cir., 12/20/13)
Although Garcia’s claim was covered by Social Security, it was denied because he had worked despite his disability until he could do it no more. This is an unusual result in SSDI because SSDI judges have no pecuniary interest in the outcome of a claim. For more on this.
Disability insurance companies which pay benefits out of their own pockets have an ingrained reluctance to believe anyone who is entitled to benefits is actually entitled to them. Playing the “hero” and fighting day by day through pain to do your job may get you kudos in the everyday world. It will only get you denial in the disability insurance world.
Although courts recognize that ordinary people fight their way through adversity, when disabled, for a variety of reasons, disability insurance companies do not, especially when such recognition would mean they would have to pay benefits to an insured. There is no upside with disability insurers for a claimant working when totally disabled. Actually, the exact opposite is true.
We have written about this before. www.quiatondisability.com/2012/10/articles/disability-claims/insurance-noses-and-faces/
Disability insurance companies will use the fact that you worked against you. They take the position that you can’t be disabled if you work. They refuse to consider the human factor, i.e., that many people will undergo the most severe pain and stress on their health to provide for their loved ones, no matter the risk.
Such people will face the most serious consequences to keep the wolf from the family’s door. Do insurance companies think they are entitled to the same devotion from claimants? And, if they do, do they think this devotion should go on forever?
Although the claimant who can take it no more and applies for benefits has saved the insurer a good deal of money by continuing to work in the past, he or she gets no Brownie points for it. The opposite is true. The insurance company will continually throw up the fact that the claimant continued to work through the disability, no matter the reason, in an effort to deny benefits under a policy.
Being a “hero” may very well scuttle your and your family’s right to desperately needed disability benefits.
There are still plenty of people who don’t believe mental health victims require the same level of treatment as do physical illness victims. Among those in the first row of these skeptics are many insurance companies. After all, if insurance companies can fashion anything that looks like an excuse not to pay benefits, they will do it and use it.
A recent settlement reported between Cigna Corporation and the Attorney-General of New York State made this clear. New York has a law which requires insurance companies to provide mental health benefits on a par with other medical benefits.
A 14-year-old girl found that Cigna ignored that law when she asked for payment of nutritional counseling fees she incurred for treatment of anorexia nervosa, an eating disorder in which the patient slowly wastes away to nothing because she has a mental disorder causing her to refuse to eat sufficient food to maintain anything like a normal weight.
Cigna denied payment for all but three of her treatments because its policy contained a 3-visit-per-year limit on behavioral health treatments. There was no such limit in the policy on visits for similar nutritional counseling for ailments outside the boundary of behavioral health, such as heart attacks or diabetes.
Cigna could offer no particular reason for why the policy limited behavioral health visits to 3 per year. In the case from which the settlement evolved, the treating doctor was of the opinion that nutritional counseling would be a key factor in her recovery. In addition, the American Psychiatric Association Guidelines calls nutritional counseling a useful part of the treatment of eating disorders such as anorexia.
Yet, Cigna stood by its 3-visits-a-year limit. As a result of its investigation in this case, New York found that Cigna had enforced its 3-visit limit in about 50 cases, forcing those policyholders to pay more than $30,000 in fees which were to be reimbursed. As part of the settlement, Cigna has agreed to review those claims and pay them.
Why doesn’t the public, including insurance companies, take mental disorders as seriously as physical disorders? For those who are stricken, the anguish, mental torment and heartbreak is very real. The economic cost of trying for a cure is the same or may be even greater than for an illness whicht can be seen on an X-ray.
Why do these types of illnesses generally get second-class status from insurers?
The day after the 2014 Super Bowl is the perfect day for illustrating the difficulty of obtaining disability benefits under ERISA no matter what kind of work you do. This “difficulty” principle is best demonstrated in the words of a well-respected ERISA attorney who normally works in the corner of employers and insurance companies.
Attorney Stephen D. Rosenberg writes the Boston ERISA & Insurance Litigation Blog. His posts generally favor the employer side of ERISA issues, so he knows what it takes for a claimant to obtain ERISA benefits.
In his January 30 blog, Mr. Rosenberg reported on the case of Dwight Harrison who played in the NFL for the Raiders, the Bills, the Colts and the Denver Broncos during a 10-year NFL career. For those who don’t know, the NFL’s disability benefits and pension plans are covered by ERISA.
Mr. Harrison had been receiving NFL disability payments for many years when he applied for a disability benefit increase. What he wound up with was the League not only denying him, but:
• He lost the disability benefit he had been receiving.
• He lost separate pension payments he had been receiving.
• He lost prior disability and pension benefits of $236,626 he had received.
• He lost $99,112.50 in NFL legal fees he was ordered to pay.
How did this happen? Basically, Mr. Rosenberg says, because Mr. Harrison had attorneys who had little or no experience in litigating ERISA cases. If you have a lawyer who has been around the ERISA block a few times, your chances of success in litigating an ERISA claim with an employer or insurance company, even one as tough as the NFL, improve substantially.
The Rosenberg blog clearly states that the amount of experience a lawyer has in handling ERISA matters makes a “huge difference” to the outcome of ERISA cases. This is particularly so, Mr. Rosenberg says, when there is a “well-lawyered” adversary as is usually the case when an insurance company is involved.
Mr. Rosenberg states flatly that a claimant’s ERISA case cannot be properly litigated by “…anyone who doesn’t have substantial experience and expertise in this area of the law.”
One of the things we like best about being an ERISA attorney is that when a prospective client asks if he or she needs to retain an experienced lawyer to handle an ERISA matter we can answer “yes” with a clear conscience.
In a 4th and goal situation, a veteran quarterback is most likely to score.
Courts should require any doctor finding or denying a psychological or psychiatric disability to actually examine the claimant in person. This really should be the rule for any medical disability claim, but such a personal hands-on examination should be absolutely required when the disability claim has a psychological or psychiatric basis.
In ERISA cases, to save money and to make it easier for their doctors to file biased medical reports, insurance companies have increasingly taken to offering reports in which their doctor has never even seen the claimant, let alone personally examined him or her. The insurance company physicians merely review the reports of the insured’s treating doctors and try to punch as many holes as possible in the doctors’ claims of disability.
We suspect that M.D.s are similar to lawyers when it comes to evaluating a client, a patient or a case. Face-to-face impressions are important to determining whether a client or patient is telling the truth.
Facial expressions, gestures, vocal volume and cadence, eye blinks, tics, face blushes, hesitations in responding and general demeanor are all evaluated subconsciously by a doctor or lawyer, as a package, in coming to decision about the veracity of the person they are talking with. Years of experience in making such face-to-face evaluations and then checking them against what actually happens, makes these evaluations most valuable in diagnosis.
Reading a report of someone else’s impressions gives no clue as to how trustworthy the patient’s description of his or her condition was. This is a problem even when the disability is based on physical abilities:
• Can you raise your arm higher than here?
• Can you climb a ladder?
• Can you sit for more than 10 minutes?
Only the examiner, personally seeing the effort to try to accomplish the objective, can have a valid opinion. Reviewing a report on paper gives no valid insight.
When a disability is psychiatric, clues are even more nuanced. An examiner has to see the response as well as hear it. The examiner has to observe body language as well as other subconscious conduct, to arrive at a valid evaluation. Only then can the expert form a reliable opinion (still not a certainty) as to whether the claimant is telling the truth.
Interpreting body language is a must in psychiatric diagnosis. Using “paper reviews” instead of actual clinical examinations, leads to only one conclusion:
Insurance companies don’t really want to know!
The Employee’s Retirement Income Security Act was enacted by Congress purportedly to make it simpler for employees to obtain disability and retirement benefits. So, why does the U.S. Supreme Court keep making it harder for average citizens to get the benefits they’ve worked for and to which they are entitled?
The latest dagger to the heart of ERISA claimants was sharpened by the Court in Heimeshoff v. Hartford Life, 134 S. Ct. 604 (2013), where the Court gave employers and insurance companies a new way in which to harass employees and make benefits claims more difficult for the average claimant.
To understand the Heimeshoff downside, one must know that trying to establish a disability claim can take years, most of them spent on the employer’s “court”. Employers make the rules for how such claims can be made when they write an administrative plan and then support that plan with an insurance policy.
Time limits are set by the plan terms formulated by the employer who gets an additional assist from the insurer who has years and years of experience fighting claims. If there is a way to make successful claim prosecution more difficult, you can bet that is the path the employer and insurance company will choose.
A statute of limitations limits the time period within which a lawsuit may be filed. Ordinarily, it does not begin run until the claim’s cause of action has accrued. This makes the statute’s effect universal. Each claimant is subject to the same rules.
In Heimeshoff, it was different. The plan itself limited the time within which a claim had to be filed to 3 years from the date upon which proof of loss had to be filed .
However, as anyone in the ERISA area is aware, the time limit in the law on when a denial of claim must be issued has not been rigorously enforced. It can take far more than 90 days for a final denial of a claim to be issued. Only when such a final denial issues has the claimant exhausted his administrative remedies so that a lawsuit may be filed.
A statute of limitations usually runs from the date upon which a cause of action arises. For example:
• The date of an accident.
• The date of a contract.
• The date of an alleged breach of duty.
• The date of a purchase.
Under Heimeshoff, the statute of limitations could very well run before the right to file a suit on the claim accrues! The time limit within which you could file a suit could expire before a final denial is communicated by a plan administrator, leaving a claimant with no time in which to file a suit.
The Supreme Court felt it had covered this eventuality by citing equitable doctrines which would permit relief from such a result. But, the ERISA plaintiffs’ bar, remember U.S. Airways v. McCutchen, 133 S. Ct. 1537 (2013) and other such cases where the Supreme Court found no difficulty in ignoring a well-settled equitable rule, resulting in a harsh result for the claimant.
If the Court can ignore established equitable principles in one type of case, why not in another? How much can plaintiffs rely on equitable principles to prevent injustice in cases where the insurance company controls the pace of proceedings until final denial?
A fixed period of time for filing an action on an ERISA claim should be the rule. That time should not begin to run until either there is a final denial of an administrative appeal or until the time to file such an administrative appeal expires. A defendant’s artful ability to delay a final denial of claim should not be able to restrict those rights .
The Heimeshoff decision puts real teeth into the maxim:
“Justice delayed is justice denied.”
Insurance companies almost always try to close the barn door after the horse is long gone. They seem to have a habit of waking up late when they contest a policy’s terms. But, that doesn’t stop them from denying benefits.
A good example of this “sleepy” conduct was illustrated in Patterson v. Reliance Standard, 2013 WL 6328832, C.D. Cal.) , when Reliance was called upon to pay a life insurance death benefit. For four years the insured paid the required premiums and they were accepted by Reliance without demur.
Only when the insured had the temerity to die did Reliance shift into high gear, take a hard look at the policy and find that she had failed to provide a health form required before the policy could be issued. Reliance refused to pay the death benefit.
However, as in most cases, there was an incontestability clause in her policy which clearly stated that Reliance could not contest the policy after it had been in force for two years. So, a Federal District Court held that the clause prohibited the denial of benefit and found for the policyholder.
This case highlights a longstanding ploy of insurance companies: Take the premiums and worry about the details later (“later” meaning at the time you are called on to pay benefits). Up until that time, the money is going all one way – to the insurer. Only when the insured has to be paid does the insurance company get serious about the details.
An insurance policy is a solemn obligation to pay and should be treated as such. If an insurer is serious about the information it requires of an insured, it should verify that information at the time the policy is issued, not when a benefit is claimed. If the company knows that the policy becomes incontestable after a certain period of time it should protect itself by checking the necessary facts before that time period expires.
The reason insurers don’t thoroughly check policy applications is that it costs them money to do so. Why waste money checking when they can let the matter slide and collect premiums all the while. Insurers think they can always look into the details of the claim when a benefit becomes due.
This is most unfair to policyholders who may pay premiums for years believing they have coverage, only to have the company strongly contest at the time benefits are triggered. If the insurance company wins, the insured has no coverage even after paying premiums for years, believing there was coverage.
Insurance companies save a lot of money by ignoring the details on applications until a claim is made. This type of “post-claim underwriting” should not be permitted. The time for the insurers to do its “due diligence” is before it agrees to issue a policy, not after premiums have been collected for years.
By the time a claim is made, the best witness to the validity of the application (the insured) may be dead or disabled. That’s why insurers should not be able to raise application issues more than 2 years after a policy goes into effect.
If companies contest and lose, they generally have to pay only the same benefits the policy called for, so why not contest?
If an insurance company chooses not to spend the money or the time verifying the details of an application within a reasonable time, then so be it.
“Incontestable” should mean incontestable. Insureds must be able to rely 100% on its meaning.
It’s time to lift our head from our writing chores, look around and see where we have been and where we are going. A Happy and Healthy New Year Everybody!
As we approach the end of 2013, we have noticed that we are approaching a milestone – 200 full size blog posts about ERISA, insurance companies, disability claimants and related materials. That output is enough words to fill a full size hard cover book! Did we really have that much to say about ERISA and private disability claims? We did.
The question is – were those words helpful to people who needed guidance or information about ERISA and disability insurance and how to make claims in a way that will survive the land mines insurers seed in the path to benefits?
We certainly hope so. We represent only disability income insurance claimants – ERISA and private. Never in 35 years have we fought for an insurance company or an employer against a disability claimant. So, our posts primarily aim at informing and advising those making claims.
We’ll never know if our posts actually do inform unless people ask us questions or tell us about their experiences. The little insurance tricks and traps we are aware of can break the back of a perfectly valid disability claim, leaving the insured without a job or an income – maybe forever. What a depressing prospect, especially as we look forward to the New Year.
Despite what insurers and employers seem to think, disabilities are not high on an insured’s wish list. “Good health” is the toast most often drunk by most people on the holidays and throughout the year. Why do insurance companies almost automatically assume that a disabling illness or injury is something an insured wanted or needed?
Let’s start fresh. Let’s regain our enthusiasm. Let’s pump up our drive to keep letting the world know what really goes on in ERISA and disability land. Only then will the people we care about gain full advantage of the knowledge and experience they need to successfully manage an ERISA or disability claim.
So, our most profound New Year’s wish for each of you is that you will never need our services because you have becomes disabled and unable to work. Stay healthy and keep laboring at whatever you do.
But, if should ever need us, we’re here for you.
Why do insurance companies shoot themselves in the foot by trying to penalize claimants who try to work through their medical problems before applying for disability benefits.
If insurers really succeed in broadcasting the message that if you continue working when you have a disabling condition, that fact will be used against you if you ultimately have to give in to the disability and apply for LTD benefits. Afflicted employees will be forced to make claims much earlier and will never try to “tough” it out.
We know that insurance companies use whatever they can find to oppose disability claims, giving little thought to the consequences for their insureds. But withholding benefits because a claimant tried to work through a disability is just plain shortsighted.
Insurers must realize that every day employees stick to their jobs and continue working while suffering the early stages of disabilities which may plague them the rest of their lives. In doing so, these employees are saving insurance companies millions of dollars in benefits which they would otherwise have had to pay out.
Rather than encouraging those who try to work despite trying medical or psychiatric conditions, insurers instead try to penalize them by throwing this work effort in their faces when they finally have to succumb and apply for LTD benefits. In effect, insurance companies penalize people for trying to avoid applying for benefits.
This attitude on the part of insurers is not only unfair to the claimant (who ever thinks of the word “fair” when discussing an LTD claim), but it actually does harm to the insurer’s position.
If word gets around that insurance companies will use your working through an illness or injury to defeat a legitimate disability claim, no employee in his or her right mind will try to do it. Employees will be more likely to apply for STD as soon as they have a condition which may have long term implications.
Why should someone force themselves to work in pain or severe discomfort, when their efforts will be used against them if they are forced, in the end, to stop working because of their disability?
The problem with insurers is that they consider all disability claimants the same – they think they are all looking for an excuse to stop working and collect benefits.
But, people are different. Some have a great work ethic. Some don’t. Some can bear pain much better than others can. There is no “one size fits all” when individuals become disabled. Some will be able to work on – some won’t.
If insurance companies continue to raise as a defense that you worked when you claimed a disability, no matter how difficult it was for you to do so, they will soon find all claimants claiming benefits much earlier that they do now to avoid the defense.
Claimants aren’t stupid. If insurance companies persist, many more claimants will seek benefits earlier to avert this knee-jerk defense raised by insurers.
If they do, companies will be paying out a lot more than they do now.
So, insurers, drop this automatic defense. Use it only where it is warranted.
If you do, you will save a lot of money.
