California Insurance Lawyer Blog

If you are eligible for benefits through your employer – life, health, disability, etc. – and you make a claim for those benefits that is denied, you have the right to file a lawsuit in federal district court. Of course, not every such lawsuit is successful. If the denial of your benefits is upheld at the district court level, you have the right to appeal that decision to a Circuit Court of Appeals.

In most cases, it is hard to convince a Circuit Court of Appeals that the district court made a mistake. Here in California, the reversal rate of the Ninth Circuit Court of Appeals in civil cases – i.e., the percentage of cases in which the Ninth Circuit finds that a mistake has been made – is only about 15%. Because the odds are stacked against appeals at the outset, it takes the diligence and expertise of experienced attorneys to obtain a reversal.

At Kantor & Kantor, we have extensive experience at the federal appellate level and have won several significant victories. Most recently, in a case we took over from another attorney, we convinced the Ninth Circuit in Ford v. Hartford Life & Acc. Ins. Co. that the district court applied the wrong standard of review to the claim of a man with a serious spinal condition whose disability benefits were terminated after they had been paid for five years. [link to decision]. The Ninth Circuit ruled that the district court used out-of-date cases to support its decision, and should have relied on newer cases such as Montour v. Hartford Life & Acc. Ins. Co. [link to 12/10/09 blog entry].

As a result, our client has a fresh chance to have his claim considered under more modern law, which is more favorable to him and tougher on insurance companies. We hope to demonstrate that the same errors made by Hartford in the Montour case were made in our client’s case as well, resulting in a different verdict the second time around.

If you have been denied insurance benefits, please consider successes like these in deciding who should represent you in your efforts to get your benefits back. Call us at (818) 886-2525 or log on to www.kantorlaw.net.

-PS

Kantor & Kantor lawyers won an important trial court decision recently on behalf of our client whose employer’s self-funded health plan denied medical benefits for her son. The court determined that the plan administrator had abused her discretion and violated our client’s statutory rights in refusing benefits for her son’s medical expenses. The court instructed the plan to process the claims in accordance with plan terms. Martinez v. The Beverly Hills Hotels and Bungalows Employee Benefit Trust Employee Welfare Plan.

Ana Martinez is employed by Beverly Hills Hotel and Bungalows and is a covered participant in Beverly Hills Hotel and Bungalows’ (“BHH”) self-funded employee benefits plan, which refused to cover medical and nursing care for her son in a “persistent vegetative state” from injuries incurred while he was at school. His care averages $13,000 a month. A special needs trust was created following a settlement with the school.

BHH’s employee benefits plan was previously funded through an insurance policy with Blue Cross. Blue Cross paid for medical care for Ana’s son and never sought reimbursement from the special needs trust.

BHH ended its contract with Blue Cross and went self-funded on Jan. 1, 2008. Immediately upon becoming self-funded, the plan requested that Ana sign a “Right to Reimbursement” agreement that would permit the plan to seek reimbursement for any of her son’s care from his special needs trust. BHH refused to even “process” any of Steve’s claims without the reimbursement agreement signed. The court found no basis for the plan’s request that Ana sign the reimbursement agreement before the plan would process medical claims.

In addition, when BHH went self-funded, the plan asserted for the first time subrogation rights. The plan alleged that theAna’s son’s special needs trust must pay for the medical care and only when the trust funds were depleted would the plan agree to provide medical benefits. The court found that the plan’s language was clear: the hotel was not entitled to subrogation rights from special needs trusts.

The court also found that the plan had a conflict of interest in that the administrator responsible for the plan finances was also the responsible for making benefit determinations. At trial, the plan administrator testified that “she put the plans interests ahead of the participants’ interests,” a violation of ERISA law. Plan administrators are charged with a standard of care that mandates discharge of their duties solely in the interests of plan beneficiaries.

This lawsuit is only one example of the ways benefits plans attempt to deny coverage for legitimate claims. As health insurance premiums rise, more and more employers are self-funding plans with provisions that could interrupt your benefits under previous plans or deny ongoing coverage. If you are involved in a disability benefits dispute with your employer’s self-funded plan, we can help.