Category: Disability Insurance

Know Your Rights – ERISA Claim Deadlines

We’ve previously blogged about the importance of meeting deadlines in your claim for benefits under an ERISA-governed insurance policy.  Most ERISA plans have strict deadlines for submitting a claim, appealing the insurance company’s denial of your claim, and filing a lawsuit.  The deadlines are strict and ERISA is draconian about deadlines – missing them by even a day can cause you to permanently lose your claim with no recourse.

The good news is that the insurance company and ERISA plan have to follow their own deadlines in handling claims for benefits.  The federal Department of Labor, the agency with oversight over ERISA plans and insurance companies, has a regulation mandating ERISA plans and insurance companies subject to ERISA give ERISA claims full and fair review.  Part of this regulation requires insurers to decide ERISA claims within certain deadlines.

For claims under ERISA-governed disability insurance policies, the insurer must decide the claim within 45 days.  The insurer can extend this deadline by up to 60 days, but must show circumstances outside the insurer’s control in order to do so.  Also, the insurer must notify you of the extension before the initial deadline expires.  Even if the insurer gets the extension, they have to tell you the date they expect to decide your claim.

For claims under ERISA-governed group health insurance plans, the deadline depends on the type of claim. Urgent care claims must be decided within 72 hours. Claims involving an ongoing course of treatment must be decided within 24 hours. Pre-service claims must be decided within 15 days.  And post-service claims must be decided within 30 days. Like disability claims, these deadlines can sometimes be extended, but only under limited circumstances.

If the insurance company misses the deadlines, there are important consequences.  First, you’re entitled to file a lawsuit without waiting for the insurance company to finish its review.  That means you can have your case heard by a judge weeks or months before you otherwise might. Second, once you’re in court, the court may apply greater scrutiny to the insurer’s handling of your claim because the insurer disregarded the ERISA deadlines.

Importantly – and fairly – courts are holding insurance companies to these deadlines just as strictly as they hold claimants to deadlines.  In the recent case Fessenden v. Standard Reliance Life Insurance Company, the Seventh Circuit Court of Appeals held these deadlines are a “bright line”.  Writing “What’s good for the goose is good for the gander,” the court determined that the insurer’s missing the deadlines by even a day violates the rule and allows the claimant to file suit immediately.

 

How Do I Know Whether To Make A Disability Insurance Claim?

Many people understand that they have disability insurance coverage, but aren’t sure whether, when, or how to make a claim.  This confusion often results in people delaying in submitting a claim, which can potentially jeopardize their right to coverage.  Below is a guide to some of the issues you might consider in determining whether to make a disability insurance claim.

First, remember that the specific insurance policy language will determine whether you have a claim for disability benefits.  Always be sure to double check the actual insurance policy language – or have a lawyer do so for you – before making any decisions.  Also be mindful that the insurance policy may be comprised of many separate documents.  For instance, there may be an insurance policy contract, declarations pages, riders, amendments, and endorsements, all contained in what might appear to be separate documents.  And if your disability coverage is subject to ERISA, other employee benefit plan documents such as a Summary Plan Description may also affect your rights.

In particular, you will want to be familiar with how the policy defines “disability.”  Most disability insurance policies define “disability” to mean, basically, you can’t work because you are ill or injured.  But the devil is often in the details.  For example, does the policy require you to be unable to do your current job, or any job within your skillset, or any job at all?  Is a software engineer with cognitive impairment from a brain injury disabled if they can still flip burgers? Slight differences in the definition of “disability” can be critical.

Second, have a clear understanding of the medical basis for your disability – i.e., the injuries, illnesses, or other conditions that affect your life and prevent you from working.  You don’t need to be a doctor to make a disability claim, but having a clear picture of the diagnoses and limitations relevant to your disability will help you submit your claim clearly.  Absent clarity, some unscrupulous insurance adjuster may try to take advantage of the confusion to mischaracterize your claim as falling within one of the policy’s exclusions.

Third, be mindful of whether you have discussed with your employer any potential accommodations that could help you perform your job despite your disability.  Most of the time, employers are legally obligated to make minor changes to your job to enable you to continue working despite your disability.  If you can keep working with a reasonable accommodation, you may not be entitled to disability insurance benefits – and may not need them in the first place!

Fourth, be mindful of any applicable time limits to make a claim.  Be sure you are submitting your claim to the right people, using the right documentation, and meeting the right deadlines.  Don’t put yourself in a position of losing out on coverage through technicalities.

These are just a few of the many things you may want to consider when deciding whether to claim disability insurance benefits.  Please keep in mind that many other issues can come into play – and the best way to protect your legal rights is to talk to a lawyer!

Court Emphasizes Importance of Making Insurance Claims Promptly in ERISA Disability Dispute

A recent decision from our neighbors in the Portland, Oregon federal courts emphasizes that insurance policyholders should always strive to submit claims as soon as possible – especially where the insurance policy is covered by ERISA.

Often, it’s not practical to submit insurance claims as soon as the loss occurs.  When your house burns down, you’re critically injured, or have to stop working due to a disability, you’re often overwhelmed as it is without worrying about submitting insurance claims.  For this reason, many legal rules apply that can entitle an insured to benefits under an insurance policy even if the insured delays in submitting their claim.  These rules protect insureds from the otherwise-draconian result of losing insurance benefits they paid for due to a technicality.

However, the Oregon federal court’s recent decision in Gary v. Unum Life Insurance Company of America emphasizes that, sometimes, a delay in submitting insurance claims can completely eliminate the policyholder’s right to benefits, especially under ERISA.

Ms. Gary applied for Long-Term Disability benefits under an ERISA-governed disability insurance policy issued by Unum.  Plaintiff, an attorney, had become disabled and been ordered by her doctor to stop practicing law as of December 1, 2013.  But Ms. Gary waited until September 1, 2016 to make a claim for disability insurance benefits from Unum.

Unum ultimately determined Ms. Gary was disabled, but only from November 27, 2013 through April 6, 2015.  Ms. Gary filed a lawsuit under ERISA, seeking disability benefits post-April 6, 2015.  The dispute focused on Unum’s conclusion that Ms. Gary was essentially recovered from her disability following surgery in 2014.

The court upheld Unum’s denial of benefits after April 6, 2015.  The court focused on the absence of medical information regarding Ms. Gary’s condition as of April 6, 2015.  Critically, the court noted that it was impossible for a doctor to examine Ms. Gary in person and give an opinion about her medical condition that would be retroactive to April 6, 2015.  The court emphasized:

because Plaintiff’s claim was not filed until September 1, 2016, there was no opportunity for an [examination] or other evaluation of [Ms. Gary] by [Unum] in the nearly three years from the date of alleged disability. And while the Supplemental Record submitted by [Ms. Gary] provided some new medical evidence, it did not clarify [Ms Gary]’s limitations in the months following her surgery and around April 6, 2015.

Of course, there’s no way to tell if the court would have reached a different result had Ms. Gary applied for benefits immediately after becoming disabled.  But allowing a prompt medical evaluation following her surgery that could have armed her with additional medical information supporting her disability.

The Gary decision is an important reminder that it is always in the insured’s best interest to claim benefits promptly following a loss.

Court Hands Long-Term Disability Claimant A Win Based on Insurer’s Failure to Give Proper Notice of Claim Denial

ERISA’s rules for making claims for benefits and for appealing benefit denials can prejudice claimants.  The rules are complicated, not obvious, and rarely fully disclosed.  And if you don’t follow the rules, you can lose your right to file suit after a claim is denied.

To protect claimants’ rights during this process, the U.S. Department of Labor, the agency responsible for enforcing ERISA, has promulgated a regulation establishing minimum claims-handling standards requiring that persons claiming benefits under ERISA receive full and fair review of their claims.  Among these rules is a requirement that ERISA plan administrators give claimants fair notice when their claims for benefits are denied.  Denial notices must be given within 90 days of the claim and must contain enough information for the claimant to decipher what is needed to obtain benefits.

A recent decision by the Ninth Circuit Court of Appeals in Gordon v. MetLife confirms that ERISA plan administrators such as MetLife must follow the rules for giving claimants full and fair review.  Gordon sued MetLife under ERISA after MetLife failed for years to decide his claim for Long-Term Disability benefits.  After the fact, MetLife sought to justify its de facto denial of benefits by relying on language in the ERISA plan giving MetLife discretion to determine benefits.

The court ruled that MetLife’s failure to respond to Gordon’s claim until years after the fact violated the Department of Labor’s “full and fair review” regulation.  Accordingly, the court determined MetLife could not rely on its discretionary authority to deny Gordon’s claim for Long-Term Disability benefits.  Although the Gordon ruling is unpublished, meaning it is not binding precedent, the case is nevertheless an important reminder that ERISA plan administrators must follow the rules mandating full and fair review of benefit claims.

Four Common Disability Insurance Provisions and Why They Matter

As with most insurance cases, disputes over disability insurance coverage or benefits frequently turn on the specific insurance policy language at issue.  Insurance policy fine print can often be read in ways that are counterintuitive.  Below are four common policy provisions that are often key to the outcome of disability insurance disputes.

1.     The Definition of “Disabled”

Disability insurance policies can define “disabled” in different ways.  Some policies define disability in terms of the insured’s employment qualifications.  Such a policy might provide: “you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.”  Other policies define disability in terms of the insured’s existing occupation, defining disability as: “you are unable to perform the material and substantial duties of your regular occupation, or you have a 20% or more loss in your monthly earnings.”  Further, some insurance policies change the definition of disability once the insured has been disabled for a certain time period, typically tightening the standard.

For insureds, the definition of disability is the key to claiming benefits.  Many disability insurance disputes focus on whether the insured meets the definition of disability.  That’s key because insurers sometimes deny claims under the wrong standard of disability.  Denying claims under an erroneous standard could result in denying benefits where the insured is otherwise entitled to them.

The definition of disability also establishes the specific medical evidence needed to establish the insured is disabled.  That’s key because doctors typically do not write medical records with the insurer’s definition of disability in mind; they focus on the medical information relevant to the patient’s diagnosis treatment.  Accordingly, insurers often claim the insured’s medical records don’t prove the insured is disabled because the doctor’s notes don’t precisely match up with the definition in the policy.

2.     Mental Health Limits

Many disability policies contain special provisions restricting coverage where the insured’s disability relates to their mental health.  Although the federal Mental Health Parity Act generally prohibits health insurers from disfavoring mental health coverage, disability insurers are still often free to do so.

An example of a common mental health limitation in a disability policy: “Disabilities which are due in whole or part to mental illness have a limited pay period during your lifetime.  The limited pay period for mental illness is 24 months during your lifetime.”

Mental health limitations can be critical to disability insurance disputes.  The insured may have both physical and mental health symptoms.  Sometimes, the physical ailments cause the mental health symptoms directly, for example, in the case of a traumatic brain injury which manifests with difficulty concentrating or focusing.  Or, the mental health symptoms may be ancillary to the physical injury; for instance, people suffering a physical disability often seek mental health treatment after becoming depressed and anxious about their inability to work, engage in hobbies or socialize because of their physical disability.  Sometimes the mental and physical symptoms may be completely unrelated, for instance, when a person who has been treated for anxiety for many years sustains a physical disability following an injury.

In these circumstances, insurers often conflate the physical and mental health symptoms to justify limiting benefits under the mental health limitation.  Insurers may ignore the physical ailments that prevent the insured from working and focus on ancillary mental health symptoms that were well-managed prior to the onset of physical symptoms.  Or, the insurer may incorrectly determine that any physical limitations are caused solely by mental health conditions, for instance, by characterizing migraine headaches as a symptom of anxiety.

To avoid this, it’s critical to present the insurer with medical records and statements from treating providers that clearly differentiate mental health conditions from physical ailments, and indicate whether the physical ailments alone render the insured disabled.

3.     “Objective” Evidence Requirements

Similar to mental health, many disability insurance policies limit coverage for so-called “self-reported symptoms,” defined as symptoms that cannot be proven through “objective” testing.

Many disabling conditions are, by their nature, not readily provable through “objective” testing.  Chronic migraines, fibromyalgia, or Chronic Fatigue Syndrome are common examples.  These conditions sometimes result in disabling symptoms, but are difficult to objectively measured through things like MRIs or X-Rays.  Consequently, many insureds have coverage denied for conditions that render them disabled but cannot be identified on objective tests.

Overcoming “objective” evidence requirements often entails establishing that the condition is one that is known in the medical community to resist proof by objective means.  Many courts have recognized the medical consensus that conditions like fibromyalgia do not show up on MRIs, and, consequently, do not allow insurers to deny such conditions for lack of “objective” testing that, by definition, cannot exist.

4.     ERISA

Disability policies issued through an employer are typically subject to a federal law called the Employee Retirement Income Security Act (“ERISA”).  If ERISA applies, it imposes important deadlines and procedural rules insureds must follow in order to contest a disability insurance denial.  For instance, insureds must appeal a denied claim within specific time periods (usually measured in days).  Moreover, the appeal must include all information the insured relies on in claiming benefits; information absent from the appeal often cannot be considered in a lawsuit disputing the denial.