Articles Tagged with ERISA appeals

When a plan participant is denied a retirement plan benefit, he is required under ERISA to ask the plan, usually through a plan administrator or other fiduciary, to review the denial before he can file a complaint in court. This is referred to as exhausting the plan’s administrative remedies. These administrative remedies and procedures that a plan participant must follow are laid out in the governing plan document and in the summary plan description. This process allows the plan administrator to reconsider its position with perhaps additional information, explanation or evidence. Once the participant gets to a “final” denial, he can then file a complaint in court. Typically, a claim is filed when a participant believes he is entitled to a benefit, or more of a benefit, and the plan tells him he is not. However, when a plan participant believes a fiduciary to the retirement plan has breached a fiduciary duty under ERISA, the question of whether a participant must exhaust the plan’s administrative remedies is unresolved and depends on the jurisdiction where the case is filed.

While the majority of courts of appeals and district courts have found no requirement to exhaust administrative remedies for breaches of fiduciary duty claims, there are two circuits that have ruled the opposite. In a fairly recent case, Fleming v. Rollins, Inc., No. 19-cv-5732 (N.D. Ga. Nov. 23, 2020), the Eleventh Circuit confirmed again its minority stance that exhaustion is required for breach of fiduciary duty claims. Citing Bickley v. Caremark RX, Inc., 461 F.3d 1325, 1328 (11th Cir. 2006). The Second Circuit, on the other hand, has not yet directly addressed the question; however, numerous circuit courts within the Second Circuit have routinely found no exhaustion requirement for breach of fiduciary duty claims.

To be sure, this is not deterring defense attorneys from bringing motions to dismiss on the basis of failure to exhaust. In the decision, Savage v. Sutherland Global Services, Inc., 2021 WL 726788 (W.D.N.Y., 2021) defendants argued exhaustion was required for statutory ERISA claims because the exhaustion requirement is specifically written into the plan document. The court was not impressed with the argument explaining “while plan fiduciaries may have expertise in interpreting the terms of the plan itself, statutory interpretation is the province of the judiciary.” Savage at 4, quoting De Pace v. Matsushita Elec. Corp. of America, 257 F.Supp.2d 543, 557 (E.D.N.Y. 2003).

One of the most crucial pieces of evidence in supporting a long term disability (LTD) claim is the opinion of the claimant’s treating physician that he or she is disabled.

Many physicians are more than happy to assist their patients with forms required by the LTD provider and in some cases, narrative accounts of their patient’s disabling condition. Sometimes, though, the doctor is unable or unwilling to assist. There are a variety of reasons for this: lack of time, lack of compensation, misunderstanding of the level of involvement required by the doctor, employer/hospital rules preventing them, and in some cases, a disbelief that their patient is actually disabled.

If you have a disabling condition and you are making an LTD claim, or you are receiving benefits, your doctor’s participation in the process is essential. Without a doctor’s support, in most cases, your claim is finished. If your doctor has notified you that he or she will not be able to assist you with your claim, it is important to ask him or her to tell you the reason for their decision. If it is anything other than lack of belief that you are disabled, often, further information can change their minds. The offer of additional compensation for their time is a big help. Explaining that they will not have to do anything more than the forms or a letter – that they will not have to testify in court – goes a long way in changing minds.

If an ERISA appeal for long term disability benefits is denied and the claimant pursues litigation, the appeal is likely to be mediated before going to trial with a judge. Indeed, most ERISA cases settle in mediation.

Here are some fundamental points to understand about mediation of long-term disability cases:

  • Mediation discussions are confidential. What you say in mediation cannot be used against you in court.

If a claim for ERISA disability benefits is denied or terminated, the claimant’s next recourse is to submit an administrative appeal to the insurance company. An ERISA long-term disability claim cannot be taken to court until the administrative appeals process is first exhausted. If the appeal is denied and the case proceeds to litigation, ERISA constrains the scope of evidence that is heard at trial and also limits the available remedies. (For this reason, ERISA is favorable to the insurance companies since it does not contain strong disincentives for denying meritorious claims).

It is important to understand that, with rare exceptions, the evidence submitted on appeal is the only evidence that will be considered in litigation—in other words, once the insurance company makes a final decision on an appeal, the file for litigation becomes closed. New supporting evidence does not get added during litigation and no witnesses are called to the stand to testify. The judge makes a determination based on the legal briefs submitted by the attorneys on both sides and a hearing at which the attorneys present arguments and answer any questions the judge may have. This makes ERISA litigation is a very particular type of litigation  governed by certain rules and limitations which make the process quite different from many other types of litigation such as personal injury.

For this reason, thoughtful preparation and submission of all relevant evidence for the administrative appeal is absolutely imperative. Appealing the denial of a disability claim is not just a matter of refuting the insurance companies’ reasoning for the decision or pointing out overlooked facts. Rather, it is the one opportunity to assemble the strongest possible body of evidence that can be presented in court if the appeal is denied.

When you start a new job that provides disability insurance, or accidental death and dismemberment insurance, most policies include language that states you will not have coverage for claims you make in the first 12 months if the claim is for an injury or illness that is a “pre-existing condition.” But what is a pre-existing condition, and how will insurance companies determine if you have one?

A pre-existing condition is generally defined as any medical condition for which you received treatment, care, advice, or a prescription from a medical professional in the 90 days before you started your new job. The precise language will differ from policy to policy, but that is the general idea. For some medical conditions, the application will be obvious. If you were in treatment for breast cancer in the three months before you started your new job, started a new job believing you were in remission, and then 8 months later found out that your cancer had returned, that would be a pre-existing condition and you would not have coverage. If you were in a car accident before you started a new job and treated with a chiropractor or in physical therapy for injuries, and eventually could not work because of those injuries and so went on leave within the first year of work, that would be a pre-existing condition. It’s also reasonably clear that if you treated with a doctor for a broken leg, or with a psychiatrist for anxiety before starting your new job and six months later you were hit by a car and went out on disability for internal injuries, your prior medical care would not be a pre-existing condition that would bar coverage for the accident.

There are other situations that are not so clear cut. If you were treating for back problems due to a slipped disc prior to starting work, and then were in a car accident six months into your new job and further injured your back, will coverage for that injury be barred by the pre-existing condition limitation? Your insurance company will almost surely argue that there is no coverage because the injury was a pre-existing condition. What if you had diabetes, and after a car accident lost a leg, in part because of complications related to your diabetes? Or what if you had been fully released to work after a prior injury and were not treating for it, but were titrating down on your pain medication during the 90-day period before you started work, and then your injury flared and you needed to go on disability?

Unum is one of the biggest disability and life insurers in the United States, owning subsidiaries including Provident Life and Accident Insurance Company and The Paul Revere Life Insurance Company. Unum generates billions of dollars in revenue and has boasted high rates of growth over the past few decades. Unum has also built a bad reputation for unfair handling of disability benefits claims over the years. Their aggressive and unfair tactics to avoid paying benefits to insured individuals resulted in numerous lawsuits and class actions for insurance bad faith practices, with trial losses totaling well over $100 million.

On top of individual lawsuits and class actions, in the early 2000’s, insurance regulators undertook a multistate market conduct examination to investigate reports of wrongful practices related to delaying and denying legitimate disability insurance claims.  As a result, Unum entered into a multi-state settlement agreement in 2004 in which Unum agreed to review denied claims, implement new claims handling procedures, and pay a $15 million civil penalty. On top of the multi-state settlement agreement, California regulators undertook their own investigation and Unum’s California settlement agreement entailed an additional $8 million penalty as well as changes to policy provisions and claims handling procedures.

Some of the most striking problems with Unum’s handling of disability claims that insurance regulators identified included the following:

Kantor & Kantor, LLP recently achieved a victory in Olis-v.-Unum-Life-Insurance-Company-of-America No. 8:19-cv-01347-JVS-DFM, __ WL __ (C.D. Cal. July 27, 2020), a lawsuit seeking payment of an ERISA-governed disability claim based on debilitating migraines. Disability cases involving subjective reports of pain may be the most difficult benefit cases courts have to consider. This case provides a good example of what makes for a convincing claim, and what courts are looking for in deciding whether to award benefits. Our client was represented by Kantor & Kantor attorneys, Brent Dorian Brehm, Sarah Demers, and myself, Peter Sessions.

The plaintiff in this case was a 36-year-old woman who was employed by Enterprise, the rental car company, as an account specialist, which involved significant computer use. She had suffered from headaches for much of her life, but in 2016 those headaches intensified into recurrent migraines, which were accompanied by vertigo and visual disturbances. She took a medical leave of absence to address her problems and then tried to return to work, but she only lasted another month before she had to stop working entirely. During this time, Plaintiff visited numerous doctors in a number of specialties, tried several medications, and attended countless physical therapy sessions.

Plaintiff submitted a claim for LTD benefits to Unum Life Insurance Company of America, which Unum denied on the ground that she had not presented sufficient evidence to prove that she could not return to work. Plaintiff unsuccessfully appealed, and then filed suit against Unum under ERISA. The parties filed cross-motions for judgment under Fed.R.Civ.P. 52.

The short answer: Yes, depending on how much time has passed since you first submitted your claim.

Consider the following scenario. You work for a company that has an insured long-term disability (“LTD”) plan that is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Let us say the insurance company is Prudential Insurance Company of America. You go out on disability due to chronic pain and file a claim with Prudential on July 25, 2019. On August 19, 2019, Prudential acknowledges that it received your medical records, activities of daily living questionnaire, and work capacity questionnaire. But inexplicitly, it says it needs more time to decide your claim and takes a 30-day extension. In the meantime, Prudential reaches out to your doctor to request feedback on its medical evaluation conducted by one of its nurse reviewers. Prudential also seeks clarification from you regarding your medical history. On November 13, 2019, Prudential confirms that the file is complete, but it states it needs more time to decide your claim. It does not explain why it needs more time. Finally, on November 27, 2019, Prudential decides against you. Can you file a lawsuit?

According to Judge Jeffrey White in the Northern District of California, the answer is yes. See Hasten v. Prudential Ins. Co. of Am., No. 19-CV-07943-JSW, 2020 WL 3786229 (N.D. Cal. July 6, 2020).

Here at Kantor & Kantor we constantly find ourselves working closely with SSDI attorneys on behalf of our clients. Even more often, the evidence we secure on behalf of our clients during their LTD disputes can be utilized by your clients to support their SSDI claim as well. Here are some thoughts on our clients’ intersection between LTD and SSDI.

If we have a mutual client, use us as a resource to fight the substantive disability claim.

We can promptly provide copies of critical case documents, including testing or expert reports we have acquired in support of our client’s LTD fight. Our evidence saying a claimant is completely unable to work in any occupation on even a part time basis should be similarly useful for your SSDI case.

Contact Information