Articles Posted in ERISA

Over the past 15 years, I have represented hundreds of claimants in their claims for disability benefits governed by the Employee Retirement Income Security Act of 1974, also known as ERISA.  If an ERISA disability claim is denied, a claimant must appeal that denial to the plan administrator or insurance company before he or she is able to file a lawsuit.  The appeals process is referred to as exhausting administrative remedies (though there is no administrative agency involved). The ERISA Regulations provide rules that an administrator must follow in order to give a claimant a “full and fair review.”  See ERISA § 503; 29 CFR § 2560.503-1 (Claims procedure).

Effective April 1, 2018, the ERISA Regulations were changed to require that an insurance company or administrator provide to the claimant copies of new evidence it obtains after a claimant submits an appeal so that the claimant has an opportunity to respond to the new evidence before the insurance company issues a final claim decision.  Some insurance companies, however, refuse to provide this evidence to claimants who filed their disability claims before April 1, 2018.

What if you fall into this pre-April 1, 2018 category?  Do you have any rights to know what the insurance company is relying on before it issues a final decision on your appeal?

There comes a time in your life when you will need to consult with a lawyer – whether it be good news or bad news. A good lawyer works with you, helps you understand the situation, and guides you to the best possible result. At Kantor & Kantor we routinely speak with individuals who have had life, health, and disability claims denied by their insurance companies.

As lawyers we are well-versed in the practice of law, but we rely on the information from our clients to steer us in the right direction and guide each case. It takes TEAMWORK to get the best possible result for our clients.

Here are a few tips for talking to your lawyer and telling them what they need to know.

We represent many clients who have been denied long-term disability benefits in lawsuits against the insurance companies who have denied their claims. Many of our clients ask, “What is the value of my disability claim?”

This question usually presents itself in the context of mediation, which is a form of voluntary alternative dispute resolution, because our clients must decide whether to take the insurance company’s lump sum settlement offer. There are many factors to consider. To aid our clients’ decision-making process, we will prepare a “present value calculation” designed to capture the total value of all benefits in dispute.  In most circumstances, the value of your benefit can be broken up into two parts:  the past-due benefits and the future benefits.  Benefits, both past and future, are calculated by taking your net monthly benefit (total gross monthly benefit minus offsets” for other income you receive) and multiplying by the number of months benefits are due. However, past and future benefits have to be calculated differently in order to account for inflation.

Past-due benefits are calculated by multiplying the net monthly benefit by the number of months of past-due benefits you are owed. Then, we add interest to compensate you for the fact that, had you been properly paid your past-due benefits, those benefits would have been worth more in the past than they are in the present, because inflation has made the value of each dollar decrease over time.  Notably, the insurance carriers seldom factor in interest on the past-due benefits in the context of mediation. However, if your case does not settle and the court makes a decision in your favor, it has the discretion to award prejudgment interest on the past-due benefit. The percentages that courts award vary and range from the nominal interest amount rate dictated by 28 U.S.C. § 1961 (1-year constant maturity Treasury yield) to 10% interest. See, e.g., Blankenship v. Liberty Life Assur. Co. of Bos., 486 F.3d 620, 628 (9th Cir. 2007) (affirming award of prejudgment interest at a rate of 10.01 percent, compounded monthly); Oster v. Standard Ins. Co., 768 F. Supp. 2d 1026 (N.D. Cal. 2011) (finding current U.S. Treasury Rate at .3% too low and awarding prejudgment interest at the rate of 5% ).

The Supreme Court heard arguments yesterday in Retirement Plans Committee of IBM v. Jander, an ERISA case challenging the prudence of fiduciary decisions with respect to an employee stock ownership plan (ESOP).  The Court granted certiorari to review whether the Second Circuit correctly applied the Court’s “more harm than good” standard set forth in Fifth Third Bancorp. v. Dudenhoeffer to a claim that fiduciaries, who were corporate insiders with information that the company stock was overvalued, should have made a corrective disclosure before allowing the plan to make continuing investments in that stock.

Of the three ERISA cases that Court is looking at this term, Jander is the most confounding and the argument yesterday did little to clear things up.  This is mostly because the case concerns the meaning and application of Dudenhoeffer, a decision that attempted to describe pleading standards in the hazy terrain where corporate securities obligations end and ERISA fiduciary duties begin.  But the fact that the Petitioners (IBM plan fiduciaries), the government and the plan participant all proposed different standards, only one of which was based on Dudenhoeffer, added to the confusion.

Several Justices expressed some concern that the petitioner’s broadest argument – that corporate insiders who are fiduciaries have no ERISA duties when they learn of problems with the company stock – and the government’s argument that almost any disclosure not required under securities law would be inconsistent with that regime, would require them to scrap Dudenhoeffer.  Perhaps most interestingly, Justice Gorsuch noted that corporate insiders don’t have to serve as fiduciaries and thus the problem presented in the case was, to some extent, self-created.  But he also questioned whether the securities laws might not be the most logical place to look when considering what actions a fiduciary with insider information should take to protect ESOPs.

Kantor & Kantor Partner Elizabeth Hopkins filed an Amicus Brief in the Supreme Court on October 28, 2019 for The Pension Rights Center in support of the Ninth Circuit in Intel Corp. Investment Policy Committee et al. v. Christopher M. Sulyma  The case is about whether workers get six years or three years to sue over ERISA violations.

Please see the brief here:  18-1116bsacPensionRightsCenter

For questions on the handling of your Pension benefits, please do not hesitate to contact Kantor & Kantor for a no-cost consultation at (800) 446-7529 or use our online contact form.

A functional capacity evaluation (FCE) is a series of tests that is used to measure a person’s functional physical ability to perform certain work-related tasks. A good, reliable FCE has validity measures embedded within the tests to show that the person taking the tests is putting forth the most effort he can, given his physical limitations. FCEs have many purposes, but in long term disability, we use them to provide objective support of a client’s physical restrictions and limitations with respect to his own occupation or any occupation, if that is the stage of his claim.

Often, in LTD cases, your physician will be asked to complete physical capacity forms. Having an FCE report will assist your doctor in this endeavor by providing her with the exact measurements she needs to provide her opinion.

If you have a condition such as degenerative disc disease, back pain with radiculopathy, fibromyalgia, or many other conditions that result in physical limitations, an FCE can be a very good tool to precisely measure exactly how limited you are by your disabling conditions. We can then use the FCE results to gather further support for your claim by giving it to your physician for her to review and use when she writes a letter of support.

Most ERISA-governed long term disability policies include a limitation on the amount of time they will pay benefits when the disabling condition is one that the policy defines as a “mental/nervous” condition.  Policies vary as to what they include in their definition of “mental/nervous” conditions and the wording of the limitation varies, too.  A note about the wording of the limitation – it is extremely important how the policy words the limitation in terms of how evidence of a condition such as depression or anxiety is presented in a claim.

Generally, the limitation is 24 months of benefits will be paid if the claimant is disabled by a mental/nervous condition such as depression or anxiety. There are conditions, such as Multiple Sclerosis, Parkinson’s Disease, migraines, and disability after heart attack to name a few, that either have depression as a symptom of the disease itself, and/or result in depression from dealing with the disease.  In such cases, you may not be disabled at all by depression but if it is mentioned in your medical records – and it very likely will be – very often an insurance company will seize upon the depression and attempt to apply the policy’s 24-month benefit limitation to your claim.

If your only disabling condition is a mental/nervous condition, and your policy contains a 24-month limitation, it may also contain a 12-month extension of benefits should you be hospitalized for your mental health condition at the end of the 24-month period.  These are highly technical exceptions that often require the assistance of attorneys who understand how these exceptions are applied.

As we continue to learn about efforts to challenge proton therapy denials by groups such as the Proton Therapy Law Coalition, the fundamental question becomes: Will the insurers actually get the message and change their ways? A recent article suggests that even when a jury awards a large punitive damages figure against a health insurer, the carrier is likely not truly getting the message.

In November 2018, an Oklahoma jury returned a $25.5 million verdict against Aetna for improperly denying coverage for proton beam therapy, a treatment the company considered experimental. In the largest verdict for bad faith in U.S. history, the jury found that Aetna “recklessly disregarded its duty to deal fairly and act in good faith” and awarded punitive damages. During the course of deliberations, the jury specifically discussed “sending a message” to Aetna and “making a statement” so Aetna would reevaluate how it handles appeals and requests for coverage.

However, many large insurance companies, if state allows them to, carry their own liability insurance for just this occasion. It appears that about 20 states do not allow insurers to carry such liability coverage. But insurers are now turning to products sold by offshore insurers beyond the reach of state regulators. In other words, a lot of insurers are not directly paying for the punitive damages awarded against them. This undermines the importance and impact of large jury verdicts on effectuating changed insurer practices.

An Independent Medical Examination (IME) is an examination by a medical doctor hired to examine you and opine on your disease state and whether it is disabling. If so, the IME can help determine the degree to which is it disabling and its impact on your ability to perform the duties of your own or any occupation, depending upon the stage of your LTD claim.

IMEs are typically quite expensive so we are judicious in when we recommend them to our clients. We recommend them in a variety of situations and this blog does not cover every situation. Of course, we make these determinations on a case-by-case basis for each of our clients but we can offer some general information here.

If your attending physician does not wish to participate in the appeal process by writing letters, responding to medical record reviews from the insurer, or completing questionnaires necessary to a successful appeal, then an IME may be appropriate for your case.  Another situation in which we might recommend an IME is if you suffer from a particular medical condition and there is an IME provider who is a well-known expert in the diagnosis and treatment of that condition.

Kantor & Kantor Partner Elizabeth Hopkins filed an Amicus Brief in the Supreme Court on September 18, 2019 for The Pension Rights Center in support of the petitioners in Thole v. U.S. Bank, N.A.  The case is about funding in defined benefit pension plans, constitutional standing, and when participants in these plans may sue to recover plan losses.

Please see the brief here: Thole v. U.S. Bank, N.A. Amicus Brief

For questions on the handling of your Pension benefits, please do not hesitate to contact Kantor & Kantor for a no-cost consultation at (800) 446-7529 or use our online contact form.

 

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