Articles Posted in ERISA

When you think of what lawyers do for a living, the first thing you probably think of is arguing over a case in front of a judge.

You may be surprised to learn, then, that in the federal courts this staple of practicing law seems to be on the way out. The federal district courts – the trial courts of the federal system – are increasingly holding fewer and fewer oral arguments. Some district courts even have a standing default rule that they won’t hear oral argument on a motion unless the presiding judge explicitly asks for it.

This trend is even more accentuated in the federal circuit courts – the appellate courts of the federal system. While the Supreme Court of the United States holds oral argument in almost all of its cases, the circuit courts of appeal do not.

Mental health issues are definitely more widely spoken about in todays society. But lip service doesn’t necessarily help with the overwhelming challenges a person has to face in living with a mental illness.

Mental illness is more common than any of us would like. According to the National Institute of Mental Health there were an estimated 43.4 million adults aged 18 or older in the United States living with a mental illness in 2015. This number represented 17.9% of all U.S. adults. (See https://www.nimh.nih.gov/health/statistics/prevalence/any-mental-illness-ami-among-us-adults.shtml).

The National Alliance on Mental Illness reports the following statistics regarding mental illness rates in the United States:

As you know, churches occupy a special place in the law. For example, the First Amendment bars the government from prohibiting the free exercise of religion, and churches, indeed almost all religioous institutions, get special tax treatment from the IRS.

However, you may not know that this distinction can also affect your employee benefits. Almost all employee benefits are governed by a federal law called ERISA (the Employee Retirement Income Security Act of 1974). This law provides various protections, including imposing a fiduciary duty on your employer to act in your best interests in administering your benefits.

However, if you are a beneficiary of an employee benefit plan established by a church (or other religious organization), your benefits are not governed by ERISA, because ERISA has an exemption for “church plans.” (There is also an exemption for government plans.) As a result, you may lose protections under ERISA if you are a church employee.

The short answer is “Yes;” especially if they are carefully drafted to adress disability issues. To be effective, a personal statement should be directed to an insured’s inability to perform the material duties of his/her occupation, or any occupation that one may be suited for by education, training and experience. The more detail, the better.

For many years, insurers routinely disregarded claimants’ personal statement describing their illness or occupational difficulties because the personal statement was not “medical evidence.” Or, a statement may have been disregarded because it described “subjective” symptoms, which were not “verified” by MRI’s, x-rays or diagnostic studies. In the last few years, the Ninth Circuit has been critical of insurers who have insisted on “objective evidence” to prove disabilities caused by pain and fatigue. See, Salomaa v. Honda LTD Plan, 642 F.3d 666 (9th Cir., 2011) (“Many medical conditions depend for their diagnosis on patient reports of pain or other symptoms, and some cannot be objectively established until autopsy. In neither case can a disability insurer condition coverage on proof by objective indicators such as blood tests where the condition is recognized yet no such proof is possible.”)

Recently we have seen courts accept personal statements of claimants, friends and co-workers as strong evidence of disability. See Demer v IBM Corporation LTD Plan, 835 F.3d 893 (9th Cir., 2016) (Statement by a friend attesting to side effects from medication) and Jahn –Derian v. Metropolitan Life Ins. Co., 2016 WL 1355625 (C.D. Cal., 2016) (Statement from co-worker attesting to the plaintiff’s failed attempts to work with her condition was persuasive evidence).

Many people know that at Kantor & Kantor, LLP we help clients when their insurance company denies coverage life insurance claims, long-term disability claims, and eating disorder treatment claims. At Kantor & Kantor, LLP we also help clients when their insurance company denies claims for certain expensive medications including: curative Hepatitis C medications, ADHD medications and, Xyrem, a medication used successfully to treat a variety of disorders, including fibromyalgia and narcolepsy.

When Insurance Says Your Prescription Is “Not Medically Necessary”

Two women’s lives were inexplicably devastated after they attempted to fill their prescriptions for Xyrem, only to be told that their insurance company had denied coverage. One of the women, we’ll call her Jane to protect her anonymity, had been taking Xyrem for nearly a decade and the other woman, we’ll call her Mary, had been taking Xyrem for over five years. For both women, the medication had always been covered by their insurance companies. Yet for some unknown reason, when their doctors submitted their prescription-refill, both women received similar letters from their insurance companies (Cigna and Anthem) stating, “Coverage for the requested medication is denied because the medication does not meet the criteria of “medical necessity” under your description of benefits.” Both Cigna and Anthem also told the women that their prescription was “off-label” and therefore not covered for that reason, as well.

Many of our clients suffer from chronic pain. For some, chronic pain is a symptom of an underlying condition, and for others it is the main condition.  In in either case, chronic pain can be and often is disabling. Because so many of our clients are affected by chronic pain, we want to spotlight and make people aware of an organization that provides information, support and education for those who suffer from chronic pain.

The American Chronic Pain Association’s mission is:

  • to facilitate peer support and education for individuals with chronic pain and their families so that these individuals may live more fully in spite of their pain; and

There may come a time in your life when you will need to consult with a lawyer – whether it be good news or bad news. We routinely speak with individuals who have had life, health, and disability claims denied by their insurance companies. Understandably, this is a very difficult time for the individuals who call us. We understand that, and try to make the process simple…but we need your help.

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 a successful outcome for our clients.

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

On May 11, 2017, the US Court of Appeals for the Ninth Circuit issued a decision in Orzechowski v. Boeing Co. Non-Union LTD Plan, et al., Case No. 14-55919 (9th Circ. May 11, 2017) upholding the application of the California law which invalidates “discretionary clauses” in Long Term Disability (LTD) plans and other life and disability contracts of insurance.

Prior to 2012, insurers in California (and many other states) were allowed to place “discretionary clauses” into their insurance policies. These clauses, while seemingly innocuous, actually made it significantly harder for insureds to challenge wrongful denials of insurance benefits in court. These clauses forced Federal Courts to review denials of insurance benefits under an “abuse of discretion” standard. In order to prevail under this standard, an insured not only had to show that they were entitled to the benefits under the contract, but they also had to show that the insurer’s decision was “arbitrary and capricious.”  The effect of this was that Court’s were routinely deferring to the “discretion” of the insurer thereby upholding their denial. This created is a much more difficult standard of proof for insureds to meet than in an ordinary civil lawsuit, where one need only prove their case by a “preponderance” of the evidence, and where Courts do not give any special weight to the evidence presented by the other side.  The result of the so-called discretionary clauses was that many insureds lost their lawsuits for wrongfully denied benefits even when, technically, they were entitled to benefits under the term of the contract.  Court’s would simply hold they could not find evidence the insurer “abused its discretion” or acted unreasonably enough so as to justify overturning the insurer’s denial of benefits.

In 2012, the California legislature passed California Insurance Code §10110.6, which provides that all discretionary clauses in California insurance contracts are null and void, if the insurance policy or plan “renewed” as of January 1, 2012. As a result, Courts will now look at the evidence anew, or “de novo” to make a determination of whether the insured is entitled to benefits, instead of simply deferring to the insurance company’s conclusions.  This is a much easier burden for insureds to meet than the older “abuse of discretion” standard.

For over 25 years, I have been representing individuals who have had life, health, and disability claims denied by their insurance companies.   I have represented over 3,000 people.   What is so disheartening to me is that I hear from clients again and again that they “almost gave up before calling” me. They tell me they were beaten down by the process, convinced their insurance company must be right, or that they didn’t know there were lawyers who specialized in handling their kind of case on a contingent basis.   While sometimes the client HAS waited too long for us to help them, usually my law firm, Kantor & Kantor, is able to step in and successfully resolve their claim.

However, I wonder just how many DO give up unnecessarily.   While my view of the insurance industry may appear very cynical, I am 100% convinced that the industry employs a strategy of denying as many claims as possible in the hope that claimants will just give up and go away.   I could write pages upon pages of stories about clients who had almost given up, but for whom we were able to obtain benefits with nothing more than a well written letter.   It sometimes seems like the insurance company is daring their insured to challenge the denial, or to get a lawyer.   If they do, the insurance company will reconsider its denial. If not, the denial will stand and the insurance company will keep the benefits which are rightfully yours.

In the last month, I have obtained over a $1,000,000 in total benefits for several clients who separately told me that they had seriously considered giving up before calling my firm.   This led to me to come back to a familiar thought, which was to wonder about all the people who did simply give up.   I decided to write this blog in the hope that maybe ONE insured might read it, and decide not to give up.   I am not writing this to get business. I have more than I need.   I practice in California, but this blog might be read by someone in Florida, or Illinois, or New Jersey, for example. If it is, and you were considering giving up trying to get your benefits, I am not suggesting you call me.   Go on the internet, or call your State Bar, and find an experienced attorney in your State.   The worst thing that happens, is that no one will take your case  —  but what if they will?

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