Articles Posted in Insurance Bad Faith

Fire season is beginning again in California, and soon throughout the West. Thousands of people are still trying to recover and rebuild from the years of past fires and related devastation. It is often taking three or more years to rebuild a home because of difficulties obtaining permits, contractors, and materials.

Ideally, your insurance company will work with you in this difficult time in your life. You will need to obtain a copy of your insurance policy and review it carefully. This can be harder than it seems if you have just lost all your possessions in a fire, as you may not even have access to a computer for some time. It is important to understand that the amount the insurance company set to insure your house may be much less than it would cost to rebuild your house. The insurance company will also only pay to rebuild your house as it was before, it will not pay for upgrades.

You will be asked to provide lists of the contents of your home. Then the insurance company will likely only reimburse you for the “actual cash value” of the possessions you lost in the destruction of your home, which removes depreciation from the value of your items. If your policy covers it, once you actually replace the item, you may receive a second payment covering that depreciation. But if you do not replace the item, you never will.

The effect of COVID-19 on the lives of every American cannot be overstated.  What we cannot know yet is how those effects will continue into the future.  We buy insurance to protect us in the event of future calamities. A variety of different types of insurance could potentially be triggered by the varying effects of the disease.  As it can be hard to know what the future could hold, the points below summarize the different ways your insurance could be involved in COVID-19 repercussions in the months and even years ahead.

It is difficult to know with certainty the range of long term health issues that could be caused by COVID-19, as the virus has only plagued us for approximately six months. Doctors predict the long-term effects will be similar to other coronaviruses like SARS.  While 80% of sick patients had “mild” cases, of the 20% who did not, they could experience a variety of long term effects.  COVID-19 survivors are expected  to follow the path of severe respiratory issues often seen after recovery from other respiratory illnesses.  That could mean lung fibrosis, reduced lung capacity and difficulty breathing and fatigue. Preliminary data out of China demonstrates that 20% of patients hospitalized with COVID-19 had heart damage. Patients also experience increased blood clotting.  Early studies from Asia show that COVID-19 attacks T-cells in a manner similar to HIV. Doctors are also finding that close to half of those hospitalized for COVID-19 have blood or protein in their urine, which is an early indicator of kidney damage, and up to 30% of patients in New York and Wuhan lost some level of kidney function. Liver damage, intestinal damage, and neurological malfunctions have also been reported.

Health Insurance

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.

Due to their depth and breadth of knowledge, the attorneys at Kantor & Kantor are frequently asked to speak at seminars, conferences, or give presentations. In June of 2019, partner Brent Dorian Brehm was asked by a national continuing legal education (CLE) provider to speak about long term disability benefits.  The seminar was titled “Mastering Social Security, Long-term Disability & Government Benefits.” Mr. Brehm took the attendees on a journey from the start to the end of a long term disability claim – and everything in between. He also covered relevant differences between disability claims governed by state law and those governed by ERISA.

While we cannot provide you with the actual presentation or the question and answer segment that followed, we can provide Mr. Brehm’s outline. This information is valuable to anyone at any stage in the long term disability claim process. It starts from the beginning – explaining what LTD benefits are. It then goes through tips on making a successful LTD claim. It addresses what needs to be done during the claim stage to avoid litigation – but be ready for it if that must happen. And finally reviews the nuts and bolts of litigating both an ERISA and bad faith disability claim.

What are long term disability benefits?

Mental Health Awareness Month has been observed in May in the United States since 1949 by Presidential proclamation. Each year millions of Americans face the reality of living with a mental condition. According to the National Institute for Mental Health, an estimated 26.2 percent of Americans ages 18 and older—about one in four adults—suffer from a diagnosable mental illness in any given year. Not only are these adults affected by one mental illness; 45% of these adults meet criteria for two or more disorders.

Mental illness is a real and treatable set of conditions that includes major depression, bipolar disorder, eating disorders, panic attacks, generalized anxiety disorder, attention deficit hyperactivity disorder, and schizophrenia, among dozens of others. These disorders are serious enough to significantly impact a person’s daily life functioning, whether at school, work or in their relationships with others.

Among children, ADHD, behavior problems, anxiety, and depression are the most commonly diagnosed mental disorders. According to The Journal of Pediatrics, 2018,

During an office visit with your doctor, she recommends you undergo a treatment you’ve never had before. You call your health insurance company, and a representative assures you the treatment is covered by your health insurance plan. Can you rely on what the representative says? Will the treatment be covered by your insurance?

Caution is Key

Be cautious when relying on what health insurance representatives tell you over the phone. The representative can give you general information about what services are covered by your health insurance, but she cannot guarantee that you have met all the requirements under the terms of your policy for the treatment to be covered for you.

Maybe you’ve heard (or experienced) the tragic story of someone becoming ill, forgetting or being unable to pay their life insurance premium, only to see the policy lapse at the time it is needed most. It’s more common than you may realize, and at our law firm we see it quite often. It is terribly unfortunate.

What most people don’t realize, however, is that there is law in California that may come to the rescue. That law is known as the “notice prejudice” rule. The rule emanates from a judicially created doctrine dating back to at least 1963, when the California Supreme Court decided Campbell v. Allstate Ins. Co. (1963) 60 Cal.2d 303, 305. The rule is simple: it prohibits insurers from denying insurance benefits on the ground that the insured presented an untimely claim, unless the insurer can show it was prejudiced by the delay. It is expressly designed to prohibit insurance companies from disclaiming liability based on a “technical escape hatch,” and to protect insureds from the unfair forfeiture of their benefits on procedural grounds. (The rule is also widespread; the majority of states impose a similar requirement on insurers.)

So, how does the rule apply to lapsed life insurance? Well, it is important to state at the outset that it only applies in certain circumstances. One of the most common examples is when the life insurance policy also includes a provision that premium payments will be excused or “waived” in the event the insured becomes disabled. This is usually referred to as a “life waiver of premium provision” (LWOP) or something similar. Many policies have such provisions but policyholders just aren’t aware of the benefit.

California Department of Insurance Commissioner Dave Jones has opened an investigation into allegations that health insurer, Aetna, denies insureds’ claims and requests for prior authorization for medical care without ever reviewing medical records. Although Aetna’s improper utilization review practices come as no surprise to the attorneys at our office, this revelation has sparked widespread, national media attention.

The allegations giving rise to Commissioner Jones’ investigation into Aetna’s claims handling practices come from videotaped deposition testimony of Dr. Jay Ken Iinuma who served as medical director for Aetna’s Southern California business operations between March 2012 and February 2015. During the deposition, Dr. Iinuma said he was following Aetna’s training when he never once looked at patients’ medical records himself before denying their claims for coverage.

Dr. Iinuma’s deposition was taken as part of a lawsuit filed by a college student, Gillen Washington, who was denied coverage for an infusion of intravenous immunoglobin (IVIG) when he was 19 to treat a rare auto-immune disorder.  Washington sued Aetna in Orange County Superior Court for breach of contract and bad faith, alleging that Aetna’s “reckless withholding of benefits almost killed him.”  Aetna initially paid for Washington’s treatments (each fusion can cost up to $20,000) but when Washington asked Aetna to pre-authorize a November 2014 infusion, Aetna said it was obligated to review Washington’s medical records.  Aetna claims that Washington’s treating provider failed to timely provide medical records in response to Aetna’s pre-authorization review.  Washington counters Aetna’s narrative of the events surrounding Washington’s ongoing requests and medical need for IVIG treatment.  However, it was during Dr. Iinuma’s deposition, where the real bombshell in the case was revealed. The former Aetna medical director testified that he never read Washington’s medical records and knew nothing about the disorder Washington was suffering from despite denying Washington’s pre-authorization request and signing the denial letter.  Dr. Iinuma further testified that most of his work was done online and he would rarely if ever consult with an Aetna nurse about a particular claim prior to denying it.

In a story that’s far too common, Montreal writer Samuel Archibald recently shared his story of what he called “abandonment by his insurer.” While away from work on leave to treat his depression, Archibald was unknowingly tracked on social media by his insurance company – and everyday simple information about his life was used against him to deny his health claim. Out for a run? He must not be depressed. Eating a meal with family? He must not be depressed. Or at least these are the hasty judgments that his insurer made about his mental health. Did they take into account that exercise can be a wonderful natural anti-depressant? Did they take into account that eating is necessary to survive, and spending time with family can be a healthy part of treatment and recovery? Were they even medically trained to make this type of conclusion, and if so, is it ethical to make this type of conclusion without actually treating a patient in person? The questions go on and on, and in Archibald’s outrage, he took pen to paper and brought light to a very complicated issue in the insurance world. If their job is to help people when they are sick and in need, why are they so often leaving people hanging? Why are they causing harm?

Insurance companies have a bad reputation for paying health claims, and here’s why – they have a long history of denying claims and leaving people in the dark. Leaving people confused. Leaving people in financial distress. Leaving people to suffer without the support they are entitled to.

So what’s the reasoning behind all the denials? The insurer has a bottom line – and unfortunately the bottom line is not your health and wellness. “It’s an insurance company that administers the plan, that decides on the claim, and ultimately has to foot the bill if the benefit is granted – and that’s a conflict of interest that everyone can easily see,” said Sean M. Anderson, a University of Illinois expert in employee benefit plan policy and regulation.

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