California Insurance Lawyer Blog

This question comes up all the time, so we thought we'd discuss it.

Although it is a relatively straightforward question, the answer is not so straightforward. In short, it depends.

First, it is both to your benefit and to the benefit of the insurance company or employer paying your LTD claim that you receive SSDI Benefits. In every group policy I have ever seen, your LTD benefit will be reduced by the amount you originally receive from SSDI, so the insurance company is very happy to have Social Security pay what is often a high percentage of your claim. That is why it benefits the insurance carrier.

It also benefits you to obtain SSDI, in that after being receiving benefits for 24 months, you will be entitled to receive Medicare, which may be your only avenue to obtain health coverage. Also, the carriers will not offset any increases you receive from Social Security due to Cost of Living Allowances.

It is also to your benefit to have obtained SSDI, as the very recent U.S. Supreme Court decision in Glenn v. MetLife provides that insurance companies must consider the fact that Social Security has granted you benefits when they are considering whether or not to pay your claim.

So, getting SSDI is a good thing, but that doesn’t answer the question whether you should allow the insurance carrier to assist you.

First, having the insurance company obtain a representative for you, or hiring one yourself, will not save you money, or cost you money. Social Security lawyers can only charge you if they win, and if they do, the insurance companies almost universally offset only the amount you receive after the lawyer has been paid. So, the cost of the Social Security lawyer/representative is not relevant to your decision.

Second, you have to consider if the lawyer hired by the insurance company can help you get SSDI benefits, but at the same time harm your ability to continue to receive LTD benefits. The answer to this question may decide the issue for you. SSDI has no limitations on the time it will pay for disabling conditions, which is not the case with most group LTD Plans. The LTD Plans often have 24 month limitations for Mental & Nervous Conditions, and/or Substance Abuse. Suppose someone has Fibromyalgia with secondary depression. A representative hired by the insurance carrier may well push Social Security to award you benefits based on the depression, knowing that the insurance company will be able to turn around and use the award of SSDI benefits to limit your LTD claim to 24 months. Will the SSDI representative actually do that? No one knows for sure, but I have seen instances wherein I certainly believed it happened. Based on the foregoing, if there is any aspect to your disability which could be classified in such a way as to limit your ability to continue to receive LTD benefits, the safer approach is to retain your own representative who will be serving the interests of only one party, YOU!

In my opinion there is only one reason to even consider letting the insurance company retain someone to help you get SSDI. That reason is, if the insurance company is willing to hire someone to convince Social Security that you are totally disabled under the governments very strict standards, it will be more difficult for the same insurance company to turn around and deny your LTD claim. However, the mere offer by the insurance company to hire someone for you is probably strong enough evidence of your disability to outweigh the disadvantages of allowing the insurance company the ability to control your SSDI claim.

If you need assistance in getting your SSDI benefits, contact NOSSCR, which is the National Organization of Social Security Claimants Representatives. The organization, will, without charge, find someone in your geographic area qualified to help you.

Finally, if you think the advice offered in this blog is biased because I am looking for business, I am not a member of NOSSCR, and do not EVER represent claimants seeking to obtain SSDI benefits. However, I have seen scores of cases where the choice of a Social Security representative has impacted a client’s ongoing claim for LTD benefits. GK

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Posted In: LongTerm Disability (LTD) Insurance

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In case you missed it Good Morning America did a segment in April (2008) on Susan Kristoff, from West Palm Beach, Fla., who suffered from potentially deadly form of breast cancer. (We blogged it earlier.) She applied to CIGNA for payment of her long term disability insurance benefits and was repeatedly denied. Click to watch the original video.

After ABC started investigating for its segment on TV, CIGNA paid the claim. As a result of the Good Monring America show, dozens of other people called or wrote to ABC to report similar stories. You can read about this, and even watch the follow-up video on the ABC website by clicking here.

We deal with these denials every day. And, it's not just CIGNA we battle with. We have similar cases against MetLife, Unum, Standard, Hartford, Aetna, and others. Hopefully, this ABC report will cause these insurance companies to think twice before denying claims without a full and fair investigation of the facts. AK

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Posted In: ERISA , LongTerm Disability (LTD) Insurance , LongTerm Disability (LTD) Insurance

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In case you missed it Good Morning America did a segment in April (2008) on Susan Kristoff, from West Palm Beach, Fla., who suffered from potentially deadly form of breast cancer. (We blogged it earlier.) She applied to CIGNA for payment of her long term disability insurance benefits and was repeatedly denied. Click to watch the original video.

After ABC started investigating for its segment on TV, CIGNA paid the claim. As a result of the Good Monring America show, dozens of other people called or wrote to ABC to report similar stories. You can read about this, and even watch the follow-up video on the ABC website by clicking here.

We deal with these denials every day. And, it's not just CIGNA we battle with. We have similar cases against MetLife, Unum, Standard, Hartford, Aetna, and others. Hopefully, this ABC report will cause these insurance companies to think twice before denying claims without a full and fair investigation of the facts. AK

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Posted In: ERISA , LongTerm Disability (LTD) Insurance , LongTerm Disability (LTD) Insurance

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Last month we wrote how about MetLife v. Glenn had then recently been argued before the Supreme Court. Last week the decision was handed down. For the most part, it is a good step in the right direction...just not a very big step, at least as far as California and other insured’s (in the 9th Circuit) are concerned.

In Metropolitan Life Insurance Company v. Glenn, –U.S.–, 2008 WL 2444796 (June 19, 2008), the Supreme Court held that an insurance company which had the financial obligation to pay the claim, was not entitled to unfettered deference by the courts to its claim decision. This, even when the insurance policy gives the insurance company absolute discretion to make claims decisions. Rather, trial courts must factor in an insurer’s financial conflict of interest when reviewing the propriety of a claim decision.

For some time, the landscape in ERISA cases has been such that a trial court does not review the merits of the claim decision. Instead, when an employer granted “discretion” to an insurer, a trial court would only review whether the insurer acted “unreasonably” during the claim process. Oftentimes, the courts would never even get to the question of whether the claimant was disabled and entitled to benefits. Proving that an insurer acted “unreasonable” during the claim process was and is a very difficult burden for a claimant seeking to overturn a benefit denial.

In Ms. Glenn’s case, the Court was of the opinion that MetLife’s conflict of interest had influenced the claim decision and therefore, MetLife was not entitled to the full discretion it claimed. In its decision, the Court questioned claims practices we see all too often in benefit denials. For example, MetLife encouraged Ms. Glenn to apply for Social Security benefits, which would benefit MetLife financially since it could reduce its own liability by the amount of Ms. Glenn’s Social Security Award. Although MetLife took the financial benefit of the Award, it then virtually ignored the signficance of the Award and terminated Ms. Glenn’s disability benefits. The Court was also extremely critical of MetLife’s “selective review” of Ms. Glenn’s medical evidence. MetLife relied upon its own physician’s reports and discounted or ignored the evidence which supported Ms. Glenn’s disability.

Much of what the Glenn case represents had already been articulated by the 9th Circuit Court of Appeals in the matter of Alta Health v. Abatie. We believe the Glenn decision will reinforce Abatie, and help to further influence judges to more critically review insurer’s claim decisions on their merits, as opposed to abjectly deferring to the administrator’s decisions. All in all, we believe the Glenn decision will help us help our clients obtain the benefits to which they are entitled. CC & AK

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Posted In: ERISA , LongTerm Disability (LTD) Insurance , LongTerm Disability (LTD) Insurance

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Last month we wrote how about MetLife v. Glenn had then recently been argued before the Supreme Court. Last week the decision was handed down. For the most part, it is a good step in the right direction...just not a very big step, at least as far as California and other insured’s (in the 9th Circuit) are concerned.

In Metropolitan Life Insurance Company v. Glenn, –U.S.–, 2008 WL 2444796 (June 19, 2008), the Supreme Court held that an insurance company which had the financial obligation to pay the claim, was not entitled to unfettered deference by the courts to its claim decision. This, even when the insurance policy gives the insurance company absolute discretion to make claims decisions. Rather, trial courts must factor in an insurer’s financial conflict of interest when reviewing the propriety of a claim decision.

For some time, the landscape in ERISA cases has been such that a trial court does not review the merits of the claim decision. Instead, when an employer granted “discretion” to an insurer, a trial court would only review whether the insurer acted “unreasonably” during the claim process. Oftentimes, the courts would never even get to the question of whether the claimant was disabled and entitled to benefits. Proving that an insurer acted “unreasonable” during the claim process was and is a very difficult burden for a claimant seeking to overturn a benefit denial.

In Ms. Glenn’s case, the Court was of the opinion that MetLife’s conflict of interest had influenced the claim decision and therefore, MetLife was not entitled to the full discretion it claimed. In its decision, the Court questioned claims practices we see all too often in benefit denials. For example, MetLife encouraged Ms. Glenn to apply for Social Security benefits, which would benefit MetLife financially since it could reduce its own liability by the amount of Ms. Glenn’s Social Security Award. Although MetLife took the financial benefit of the Award, it then virtually ignored the signficance of the Award and terminated Ms. Glenn’s disability benefits. The Court was also extremely critical of MetLife’s “selective review” of Ms. Glenn’s medical evidence. MetLife relied upon its own physician’s reports and discounted or ignored the evidence which supported Ms. Glenn’s disability.

Much of what the Glenn case represents had already been articulated by the 9th Circuit Court of Appeals in the matter of Alta Health v. Abatie. We believe the Glenn decision will reinforce Abatie, and help to further influence judges to more critically review insurer’s claim decisions on their merits, as opposed to abjectly deferring to the administrator’s decisions. All in all, we believe the Glenn decision will help us help our clients obtain the benefits to which they are entitled. CC & AK

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Posted In: ERISA , LongTerm Disability (LTD) Insurance , LongTerm Disability (LTD) Insurance

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After more than two years of fighting, five months spent submitting claims forms, a protracted appeal, a lawsuit and a call from ABC News’ “Good Morning America,” Susan Kristoff, unable to work and being treated for stage 4 cancer, finally received her long-term disability benefits.
Cigna, her insurer, announced that its change of heart resulted from “additional information” uncovered during Susan’s appeal. Susan’s lawyer Alicia Grisham thinks differently. “The insurance companies understand that if they deny and deny claims, then many of the claimants will never pursue their claims,” Grisham said, describing a tactic known as “slow walking.”

We’ve seen this before: Bury the policyholder in mountains of claims forms, move your customer service department off-shore, keep your clients on hold, lose the paperwork, deny the claim, ask for more information, subject the sick or injured claimant to a confusing and prolonged appeal process, delay, deny, delay, deny, and perhaps the insured will give up or die.

The sad fact is that there are enough people in Susan Kristoff’s situation to keep “Good Morning America” on the air well into the next century.

Is the answer, as Grisham suggests, penalizing insurance companies for slow walking by allowing punitive damages in consumer lawsuits? Right now, the federal law known as ERISA protects disability insurers from such punitive damages in employee welfare benefit cases, and that give insurers little incentive to speed up claims processing and appeals.

At the moment, a policyholder’s best protection against slow walking is speed dialing an experienced disability insurance lawyer the moment a claim is denied. Two years without income is too long to wait, even if it means you end up featured on “Good Morning America.”

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Posted In: ERISA , ERISA , Insurance Bad Faith , LongTerm Disability (LTD) Insurance

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Last week, the U.S. Supreme Court heard oral arguments about what standard to use when reviewing an insurance company denial of ERISA welfare benefits (employer provided long term disability insurance). MetLife v. Glenn, 06-923. Under current law, an insurance company can make a terribly unfair decision to deny employee welfare benefits, and if the benefit plan contains some “magic words” a court can be prevented from reviewing such a decision on the merits, and instead, forced to let the unfair denial stand. Those magic words, notoriously known as “discretionary clauses” give the insurance company full discretion to interpret policy language and make claims decisions. Some federal districts have developed case law which requires a reviewing court to give consideration to the fact that an insurance company in the position to both pay the claim, and grant or deny benefits, stands in an inherently conflicted position. If it can be shown that such conflict tainted the claim decision making, then some lesser degree of discretion should be given, and the insurance company’s decision given more scrutiny. The problem lies in the reality that different courts look upon these circumstances differently, and there is no one general rule to be easily and consistently applied when an insurance company plays a dual and conflicted role.

In Wanda Glenn’s case, and as in so many other disability benefits cases that pass through our offices – the only entity determining the employee isn’t disabled is the insurance company acting as a plan administrator. For Ms. Glenn, her doctor diagnosed that if she returned to work she could die. The Social Security Administration determined that she was disabled and paid her government benefits. Incredibly, MetLife alone, decided there must be a job somewhere for her, so it denied her claim, and also thereby avoided having to pay her benefits. For additional detail on the facts in Glenn, click here.

For the actual Supreme Court transcript of the hearing, which can give you a sense of how unclear (even for the Supreme Court), and frustrating this system is click here.

The bottom line is that it just isn’t fair for insurance companies to be making claims decisions that are insulated from full scrutiny or “de novo” review by the courts. Hopefully, the Supreme Court will establish a rule that recognizes, and prevents this egregious conduct in the future.

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Posted In: ERISA , LongTerm Disability (LTD) Insurance

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We have been helping people with claims against insurance companies for over 18 years. Obviously, there is a lot to know about this process. From the countless claim appeals and lawsuits we have handled over the years, three basic, yet critical considerations rise to the top of our list of things to keep in mind when making a health related insurance claim:

1) ALWAYS GET A COPY OF THE POLICY, AND READ IT, BEFORE MAKING YOUR CLAIM.

It may seem obvious to suggest a careful read of the policy, but we have encountered countless people who forget about this critical step. Almost every insurance policy is written with subtle (and not so subtle) limitations on or exceptions to coverage. Look for things such as “mental and nervous” or “own occupation vs. any occupation” in exceptions in Long Term Disability policies. In health policies, look for limitations on “experimental” or therapeutic treatments, brand name pharmaceuticals, eating or psychiatric disorders. Long term care policies might require lengthy periods of hospitalization, or skilled nursing as prerequisites to coverage, or may condition coverage on an unreasonable definition of incapacity. Insurance companies are notorious for trying to characterize a claim so that it falls within one of the limitations or exceptions, and oftentimes mischaracterize an unwary claimant’s own words or writings to try and support a denial.

Often, policies are governed by ERISA (Employee Retirement Income Security Act) which is a Federal Law with very specific mandates about insurance claims, and can severely limit the available remedies.

2) PAY CAREFUL ATTENTION TO THE TIME LIMITATIONS SET FORTH IN THE PLAN.

Almost every policy has specific time limitations relating to things such as when a claim must be made, how much time the insurance company has to respond to a claim, and/or how long a claimant has to file a lawsuit if the claim is denied. The time limits are one of the very first things to look at, and calendar, when reviewing your policy. You might be able to make some legal arguments to avoid the harsh consequences of failing to comply with these deadlines insofar as they pertain to pursuing your claim, but it is always wise to act as though the deadlines are absolute.

3) ALWAYS COMMUNICATE WITH THE INSURANCE COMPANY IN WRITING, KEEP COPIES, AND USE CERTIFIED MAIL.

Insurance companies are in the practice of making copious notes about the substance of every phone conversation they have with an insured. The problem is, those notes may not always accurately reflect what you communicated, or even how the company representative communicated with you. The best solution to this is for you to send your questions in writing, AND to always confirm the substance of important conversations with a follow-up letter. If you can, try to get an email address for your representative, as email can serve as a very good substitute when sending letters via certified mail might be difficult.

Paying attention to these three simple rules related to insurance claims can greatly increase the probability of a successful claim, or if necessary, a successful lawsuit to force claim payment.

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Posted In: ERISA , Health Insurance , Insurance Bad Faith , Life Insurance , LongTerm Care Insurance , LongTerm Disability (LTD) Insurance

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A court ruling that actually favors the insured and hurts insurance companies?!? As far-fetched as that sounds, particularly in California, that’s exactly what happened recently when a state appellate court questioned California health insurers’ practice of waiting until policyholders incurred medical expenses before scrutinizing individual policies for misstatements, and then canceling coverage for omissions and errors.
This long-standing practice called “post-claim underwriting” occurs when the insurer examines representations made on the policy application only AFTER medical claims have been submitted. If ANY inaccuracies are uncovered, the company CANCELS THE COVERAGE ALTOGETHER. The insured is left with the medical bills and no insurance at a time he or she needs it more than ever.
Post-claim underwriting has been illegal in California since 1993. But that hasn’t stopped insurers from attempting to circumvent the law by using the practice against unsuspecting policyholders such as Augusto Ticconi, who sued Blue Shield for denying coverage after he incurred more than $100,000 in medical expenses. Post-claim underwriting cases don’t usually make it to trial, because insurance companies quietly settle before courts have a chance to rule against them.
Ticconi didn’t go away. He asked the trial court to certify a class action, which would allow other policyholders denied coverage to benefit from a ruling against Blue Shield. The trial court denied class certification. The 2nd District California Court of Appeals overruled the trial court and ordered it to reconsider class certification.
This paves the way for a class-action lawsuit against Blue Shield and other major health insurers. The thousands of individuals taken advantage of by their insurance providers over the years may finally get a chance to win restitution for the loss of their health coverage at the worst time possible.
In Ticconi v. Blue Shield, the California Court of Appeal sent two clear messages. To insurers, the court said post-claim underwriting won’t be tolerated. And the court assured consumers they can fight insurers and win.
This is a message of hope to policyholders of life, health, disability, long-term care and every other type of insurance who have been treated unfairly by an insurance company.

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Posted In: LongTerm Disability (LTD) Insurance

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December 10, 2007
755,000 reasons why you can’t rely on Uncle Sam.....
755,000! No, that’s not the amount of money Alex Rodriguez makes per home run. It’s actually the number of backlogged cases in the U.S. Social Security Disability system. A recent article by the New York Times reports that it can take as long as three years for an appellate decision in a Social Security Disability Income (SSDI) case.
Why this unconscionable backlog? Every year, more appeals are filed than the country's 1,025 appellate judges have the capacity to handle, even working overtime. When Congress proposed a budget item seeking $100 million to add more judges to issue more timely rulings, President Bush vetoed the bill calling it "profligate."
Every American with a disability waiting for an SSDI appellate decision (and likely anyone else who can reason) could tell the President the real meaning of "profligate": Spending $177 MILLION A DAY on the war in Iraq.
How does the President's veto affect you? It means that having your long-term disability insurance claim handled quickly and effectively is more important than ever. All too often, I get a call about an LTD claim from someone who has waited a year or more to take action. In the typical call, the policyholder denied insurance coverage was confident he or she would receive SSDI, only to find that Social Security denied them as well and their day in court won’t be coming for a LONG, LONG time. That's when I have to break the sad news that the deadline for appeal has already passed or the statute of limitations (the amount of time you have to take legal action) has already run out. Unlike SSDI, which has no statute of limitations, LTD policies must be litigated within four years of the date proof of loss is required, and in some cases it can be as short as one year.
The time to take action against your insurance company is immediately after coverage is denied! Delay and you could find yourself standing behind 755,000 other claimants in a line not going anywhere fast.
--- MH

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Posted In: LongTerm Disability (LTD) Insurance

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