One of the most common mistakes we see with long term disability (“LTD”)  denials (ERISA and non-ERISA/bad faith) is claimants rushing to submit their appeal. The desire to move quickly is understandable:

  • You have no money coming in;
  • You are angry at the insurance company and want to give them a piece of your mind;

Many of the “rules” governing ERISA claims are not contained in the statute itself, but rather are the result of judicial decisions interpreting ERISA. In the landmark case of Firestone v. Bruch, 489 U.S. 101 (1989), the U.S. Supreme Court upheld the right of an ERISA fiduciary (including insurance companies!) to reserve “discretion” to decide eligibility for benefits under an ERISA plan. When “discretion” is granted to an insurance company or a claims administrator, a reviewing court does not decide whether or not the claimant is entitled to benefits under an insurance policy. Instead, a court is limited to deciding whether the insurance company abused its discretion or acted “unreasonably” when deciding the claim.   Under this standard of review, some courts have concluded they are compelled to uphold the insurer’s decision merely because there was some medical support for the decision. See, Carlo B v. Blue Cross Blue Shield, 2010 WL 1257755 (D. Utah, 2010 (It does not matter whether the Court agrees with the insurer or its physicians. The decision need not be the only logical decision or even the best one.)

After years of unfair decisions under this standard of review, some states, including California, have taken action. Effective January 1, 2012, the California legislature outlawed discretion in policies. California Insurance Code, Section 10110.6. The statute applies to any policy which “issued or renewed” after January 1, 2012 and which covered residents of California.  What this means is that courts can now actually look at the evidence and decide for themselves whether they think an insured person is entiteld to benefits.  This is called a “de novo” proceeding, meaning the court will look at the evidence “anew” instead of deferring to what the insurance company decided. (See one of our earlier blogs for more info: http://www.californiainsurancelawyerblog.com/2015/03/california_insurance_code_sect_1.html )

Insurance companies such as MetLife, Liberty Life, Prudential and others have tried making all kinds of arguments to avoid the impact of section 10110.6. Application of the statute can depend on the facts of the case, but, since January 1, 2012, Kantor & Kantor has been successful in persuading many Federal Judges, and even insurance company lawyers, to invalidate or ignore grants of discretion written into insurance plans. A number of other experienced ERISA practitioners have also been successful in this argument. To date, the statute has been applied in at least 15 court decisions in California.

Donald Trump has just been sworn into office as this country’s 45th president, and Barack Obama is a private citizen once again. Now that Obama is gone, will his signature legislative achievement follow close behind him?

If conservatives have their way, the Affordable Care Act (ACA), commonly known as Obamacare, will be a blip in our nation’s history. Under Obama, the Republican-controlled House of Representatives voted more than 60 times to repeal the ACA, and during his presidential campaign Trump repeatedly vowed to get rid of it.

Of course, this is all easier said than done. Many parts of the ACA are very popular, including the provisions that prevent insurers from denying coverage based on pre-existing conditions, and those that allow parents to keep their children on their coverage until age 26.

Why pass on free personalized advice?

One of the people who contacted us this week was a woman who had her Long Term Disability benefits terminated by Standard Insurance Company after Standard had paid her those benefits for many years. Despite multiple surgeries, her symptoms had not improved. Each morning she takes powerful pain medications. Sometimes those medications offer enough relief to enable her to attend to daily functions, but often, they do not.

Either way, she was certainly not able to perform the duties of her job when Standard cut off her benefits. Nonetheless, Standard Insurance Company all of the sudden determined she had not provided sufficient proof of disability and terminated her Long Term Disability benefits. Thinking this was simply a misunderstanding, she appealed the denial on her own without speaking to an attorney first. After all she reasoned, Standard Insurance Company had told her all she needed to do was explain to them why she was still disabled.

On January 13, 2017, the Los Angeles Times published a column entitled Healthcare insurance hell: If at first your claim is denied, try, try again

The article describes on insured’s extreme difficulty in obtaining approval for treatments of her multiple autoimmune disorders that cause chronic pain, migraines, extreme dizziness and debilitating chronic fatigue. As the title shows, the main thrust of the argument is to never give up if your health insurance claim is denied – however, this advice is not only applicable to health insurance claims – the same holds true, believe it or not, for Long Term Disability, Long Term Care, and even Life Insurance claims!  

Some interesting additional information is also included in the column:

HOW INSURERS’ RECENT WRONGFUL RATIONING OF HARVONI DRUG TREATMENT FOR HEPATITIS C EXPOSES A LONG HISTORY OF UNREASONABLE AND HARMFUL INSURANCE COMPANY PRACTICES

Written by Tim Rozelle, Esq.

In July, August, October and December 2015, Kantor & Kantor filed class action lawsuits against Anthem Blue Cross Life and Health Insurance Company (and 26 other Anthem, Inc.-affiliated health plans nationwide), UnitedHealthcare Insurance Company (and 31 other United-affiliated health plans nationwide) and HealthNet respectively regarding the insurers’ categorical denials of Harvoni drug treatment for Hepatitis C. In denying treatment, the insurers told their insureds that their liver must reach a certain level of scarring (F3 or F4 on an F0-F4 scale) before treatment becomes necessary and would be approved.  In these respective lawsuits, our clients allege that the named insurers violated the Employee Retirement Income Security Act (ERISA) (or allege that the insureds breached insurance contracts) by using internal coverage guidelines (ICGs) to overrule providers’ determinations of appropriate medical treatment. Our clients claimed that the insurers forced them to live with a serious health problem and related issues until their livers became sufficiently deteriorated to approve treatment.

In a previous blog, we discussed the steps you need to take if you have a long term disability claim through a policy provided by your employer, before you hire an attorney. This blog will piggy back on that one, focusing on why the appeal itself is so important and more, why the quality of the evidence you submit during that appeal will make or break your claim.

Under the federal regulations governing ERISA claims, and the cases that have interpreted those regulations, your appeal is the only opportunity you will have to get evidence of your disability into your claim file. (There are a few exceptions to this general rule but for purposes of most cases, the appeal is it).

While you do have a right to litigate your claim once you have exhausted your administrative remedies under the plan, you do not have the right to testify, call witnesses or present new evidence to the judge. All the judge will see, if your claim goes that far, is the evidence that was submitted during your administrative appeal. Thus, the type and quality of the evidence you submit during your appeal is crucial to a successful claim.

Don’t ever assume that you Life Insurance policy will pay benefits to your beneficiaries.

Why? Because so often, benefits are not paid. We know this is true because we are in the business of suing insurance companies when they fail to pay valid claims. But, most people never imagine that a valid life insurance claim won’t get paid. Most of the problems we see at our firm involve insurance companies failing to pay life insurance benefits based on allegations of such things as fraud in procuring the policy, or that the policy was not properly applied for through an individual’s employer. Insurance companies often make these assertions without good faith, or without having performed a full and fair investigation of the facts. And often, when we challenge the insurance benefit denial, we get benefits paid for our clients.

But, what happens when someone doesn’t even know they are the beneficiary of a life insurance policy? Should the insurance company make an attempt to contact beneficiaries when they have knowledge an insured has died? Most state laws say”yes.” Should insurance companies continue to collect premiums (from policies with cash value) when they know an insured has died? Common sense, and the law, say”no.” Yet many insurance companies have been doing exactly what they should not be doing, and have realized mind-boggling profits by doing so. The television show, 60 minutes, ran a segment last night revealing these unfair practices. Florida Insurance Commissioner, Kevin McCarty, led the national task force investigating the industry. He explains as a result of the investigation, twenty five of the nation’s biggest life insurance companies agreed to pay more than 7 and a half billion dollars in back death benefits. For more information on the 60 minutes piece, click here: http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

On October 30, 2015, Kantor & Kantor LLP filed a class action lawsuit against Blue Shield of California. Later we amended the complaint to include “California Physicians’ Service doing business as Blue Shield of California.” Both Defendants are being sued for their unlawful denial of coverage and refusal to pay for “Harvoni,” an amazing drug that can seemingly cure chronic Hepatitis C (also sometimes referred to as “CHC”). Harvoni, developed by Gilead Sciences, Inc., is now viewed by doctors as a medically necessary treatment for Hepatitis C.

About Hepatitis C and Harvoni

Hepatitis C is a widespread contagious disease that can lead to severe liver damage, cancer, and even death. In October 2014, the United States Food and Drug Administration approved Harvoni for the treatment of Hepatitis C. Harvoni is the first drug approved for the treatment of chronic Hepatitis C that does not require combination with other drugs, and can effectively cure chronic Hepatitis C in 94% to 100% of cases with little to no side effects.

Today we revisit the case of LaVertu v. Unum Life Ins.Co. of Amer., 2014 U.S.Dist.LEXIS 40442 (C.D.Cal. March 25, 2014), a case which highlights some of the tactics insurers use to stop paying long term disability claims. Kantor & Kantor represented the plaintiff and was successful in getting her disability payments reinstated.

The Plaintiff worked as an administrative assistant for an insurance agency. She became disabled in 2007 due to back pain. Unum approved the claim, began paying benefits in 2008 after the expiration of the six-month elimination period, and continued paying benefits for more than two years. However, benefits were terminated as of March 21, 2012 based on Unum’s conclusion that LaVertu no longer met the contractual definition of disability. The plaintiff’s pre-litigation appeal was unsuccessful and she filed suit.

LaVertu introduced evidence that she had undergone three spinal surgeries. None of the treatment improved the plaintiff’s condition, however. The Social Security Administration concurred, and awarded LaVertu disability benefits under the Social Security Act. Unum obtained a copy of the entire Social Security disability insurance claim file. After reviewing the contents of the file, Unum’s in-house vocational consultant determined that the file supported sitting for no more than four hours per day; thus, the plaintiff could not meet the exertional demands of a sedentary occupation. Following that review, which took place in 2009, Unum internally noted,”Clmt is [totally disabled] any occ and R&Ls are permanent.” That information was communicated to the plaintiff in a follow-up letter stating, “we do not anticipate a change in your medical status and therefore, have made the decision to extend our approval of your benefits through February 20, 2030.”