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Before you file an ERISA lawsuit, you must follow a very specific process, and a single mistake can have serious consequences. Unfortunately, many disabled people don’t fully understand how ERISA claims work.

In this article, our experienced disability insurance lawyers outline the basics of an ERISA claim, how to “exhaust your administrative remedies,” and when you can file a disability insurance lawsuit.

What Is the ERISA Claims Process?

ERISA (Employee Retirement Income Security Act of 1974) applies to most employer-funded benefit plans, including long-term and short-term disability policies. Many claimants mistakenly believe that this administrative appeals process will be quick and informal.

Unfortunately, the ERISA administrative appeals process has its own set of deadlines and procedures. Depending on the language of your ERISA plan, you may be required to go through up to two rounds of administrative appeals before you have fully “exhausted” your administrative remedies.

The typical process involves the following steps:

  • Application for benefits: You submit forms and information that notify the insurance company about your disability insurance claim.
  • Claim investigation: A claims adjuster reviews your information, medical records, job-related documents, and other evidence. Based on their assessment, they will either approve or deny your claim.
  • Administrative appeal: If you’re denied, you must file an appeal with the insurance company. You can (and should) add missing evidence and provide legal arguments about what you’re eligible for disability insurance. This may be a multi-stage process.
  • Insurance company’s final decision: The insurance company will review your claim and issue another decision. This is their final decision, and it ends the administrative appeal process.
  • Federal lawsuit: Now that you’ve “exhausted your administrative remedies,” you can file a federal lawsuit.

You cannot skip any of these steps; if you file a lawsuit before exhausting your administrative remedies, the court will reject your claim.

The administrative appeal process is essential to your ERISA claim. During this period, you can submit additional evidence for the insurance company to consider. This may include medical records, functional capacity evaluations, detailed letters from your physicians, and experts’ reports.

Typically, your disability insurance lawyer will request a copy of your administrative file (the insurance company’s file about your claim) and supplement it with as much supporting evidence as possible.

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What Happens Once I Exhaust My ERISA Administrative Remedies?

Once the insurance company issues its final decision, you have officially exhausted your administrative remedies. That means you can file a lawsuit in a federal district court. However, you must follow specific legal procedures and requirements.

Filing Deadline

First, you must file your lawsuit within a specific time frame. ERISA does not have its own statute of limitations, which is the part of the law that sets the deadlines for filing a lawsuit. Instead, the courts will apply your state’s most similar filing deadline. In Illinois, you have 10 years to file an ERISA lawsuit.

Filing a Complaint and Serving Your Lawsuit

When you file a lawsuit, you’ll have to file a series of documents, including a complaint. You must pay a filing fee, and you also need to serve the documents to the insurance company. If you have an ERISA lawyer, they will take care of all of these details for you. If you are unrepresented, you still must navigate all of these issues, and the Clerk of the Court cannot give you legal advice.

No Jury Trials

The courts do not currently permit jury trials in ERISA lawsuits, even though many lawyers argue that claimants should have a constitutional right to a trial under the Seventh Amendment. Instead, a federal judge will review your arguments, examine the evidence, and issue a decision.

What the Judge Will Consider—and What They Won’t

Federal judges are limited in what they can evaluate in an ERISA lawsuit. Once the insurance company makes its final decision and you exhaust your administrative remedies, you no longer can submit additional evidence. There are some limited exceptions to this rule; if you have questions about submitting additional evidence, consult an experienced disability lawyer.

However, federal judges in Illinois do have broad discretion when they review your ERISA claim and administrative record. Judges use a “de novo” standard of review, which means that they can consider all of the evidence and do not have to defer to the insurance company.

Does ERISA Apply to Every Disability Insurance Claim?

No. If you purchased your own disability insurance, state laws apply to your claim. ERISA covers most employer-sponsored disability insurance plans, but there are exceptions to this rule. For example, ERISA does not cover “church plans” and government employees’ benefit plans.

If you’re unsure whether state or federal laws control your legal claims, contact our office today. Our experienced ERISA lawyers can evaluate your plan and educate you about your legal options.

Bryant Legal Group:

Chicago’s Respected Disability Insurance Lawyers

At Bryant Legal Group, we’ve helped people throughout Illinois get the disability insurance benefits they deserve, recovering millions in compensation for our clients. If you’d like to learn more about our sophisticated, client-centered approach to ERISA and disability insurance appeals, contact our office today.

To schedule your free initial consultation with an attorney from our team, call us at (312) 586-9650 or complete our quick online contact form.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

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When you’re unable to work, due to an injury, illness, or chronic medical condition, you may be eligible for short-term disability benefits. Many people think that getting short-term disability is a simple process and are surprised when issues come up that lead to a denial or termination of benefits.

If you’re considering applying for short-term disability, you need to be prepared. To give yourself the best chance at getting benefits without an appeal, you need to provide detailed information and substantial evidence. In this article, we’ll outline the essentials of a short-term disability claim.

What Is Short-Term Disability Insurance?

Short-term disability insurance plans are available either independently through a private insurance plan or through your employer. The employee benefits from these plans serve as a limited wage replacement during a temporary disability period.

For example, suppose you are in a car accident and need cervical spine surgery. Your doctor takes you off work for six months while you heal and rebuild strength. Thankfully, your back heals, and you’re able to return to work. Under these circumstances, you may be eligible for short-term disability benefits during the six months of recovery.

Short-term disability is different from workers’ compensation. To get workers’ comp, your injury or illness must be work-related, which means you either suffered the injury on the job or it occurred directly because of your work duties. With short-term disability, you can collect benefits even if the injury or illness happened away from your workplace and had nothing to do with your work.

Also, short-term disability and workers’ compensation don’t necessarily exclude each other; in some instances, it is possible to collect both types of benefits at the same time.

Short-term disability is also not related to Social Security Disability (SSD). The Social Security Administration does not offer any type of short-term benefits.

Am I Eligible for Short-Term Disability Benefits?

Depending on your short-term disability insurance plan, you can have quite different requirements for qualification. Each plan has its own definition of what constitutes a qualifying “disability,” and there are additional requirements that can differ, too.  These requirements may include:

  • Minimum period of time working for an employer before coverage applies
  • Full-time employment
  • Minimum duration of disability (usually a minimum of 8–9 weeks)
  • Frequency of medical updates

Requirements may differ from plan to plan, but in general, short-term disability coverage requires that you have a condition that prevents you from working for a significant but temporary period, usually between two months and one year. There is often a waiting period (also called an “elimination period”) before you are entitled to receive benefits, and you may have to use sick days at work before your benefits kick in.

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How Much Will I Receive in Short-Term Disability Benefits?

Short-term disability benefits will pay a percentage of your wages. Depending on the terms of your disability insurance plan, you may receive 40, 50, or 60 percent of your wages on a weekly, biweekly, or monthly schedule.

For example, if you were earning $3,000 per month and your short-term disability plan paid out 50 percent of your wages, you could receive $1,500 per month in biweekly payments of $750.

How Long Will My Short-Term Disability Benefits Last?

Short-term disability benefits are intended as a stopgap measure that replaces your wages following an unexpected event, like an accident or illness. Under most plans, the benefit period lasts for a year or less.

If your disabling condition continues, you may be eligible to receive long-term disability benefits. Depending on the plan, your short-term disability benefits may automatically qualify you for long-term disability benefits after a certain period of time.  Otherwise, you will have to reapply and qualify for long-term disability benefits.

RELATED: How Long Do I Have to Wait for a Disability Insurance Decision?

How Do I Apply for Short-Term Disability Benefits?

Before you apply for short-term disability benefits, it’s important to understand your plan’s exact terms and conditions. You should request a copy of your Plan Document and Summary Plan Description from your employer’s human resources department or directly from the insurance company. Then, carefully read these documents (or work with an attorney who can read them) to identify the disability definition, filing deadlines, and procedures that apply to your claim.

Because filing a disability claim is a highly technical process, we encourage short-term disability claimants to schedule a consultation with an experienced lawyer. Disability insurance claims require a detailed understanding of the law, medicine, and vocational analysis, and a single misstep can cost you the benefits you deserve.

Also, short-term disability benefits are short-lived. Sometimes, insurance companies deny or delay valid claims, hoping that you’ll simply return to work and give up. So, it’s critical that you consult an attorney early on in the process. Your attorney will challenge wrongful denials and work to make sure that your full benefits are paid promptly.

Once you understand the policies and processes that will frame your short-term benefit claim, you and your lawyer will compile evidence, including medical records and statements from your physicians. You’ll also complete a series of forms that discuss your disability, work experience, job requirements, and other issues.

RELATED: Common Reasons for Denial of Short-Term Disability Benefits

What Happens After I File for Short-Term Disability Benefits?

Once the disability insurance company receives your application for benefits, an adjuster will investigate your claim. They may ask for additional information or schedule an examination with one of their doctors. In general, the company will look for reasons to deny your claim, like a pre-existing condition. Based on its assessment, the insurance company will either approve or deny your claim.

However, you do have the right to appeal the insurance company’s decision. If you receive a written notice denying your short-term disability claim, you should contact a disability insurance attorney immediately to discuss your legal options.

Bryant Legal Group Is Here to Help With Short-Term Disability Claims in Chicago

If you’re ready to apply for short-term disability benefits, it’s time to get in touch with an experienced Chicago short-term disability attorney at Bryant Legal Group. Our attorneys have decades of experience helping people file successful short-term disability claims and challenge unreasonable denials. We are committed to our clients, and we make ourselves available to answer any questions or concerns you may have regarding the claims process.

Call 312-561-3010 or complete our online contact form to speak with one of our short-term disability attorneys today. We look forward to assisting you.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Bryant Legal Group

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

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You’ve filed your application for long-term disability (LTD) benefits, meticulously filling out all the necessary information and submitting all of your relevant medical records. When you get the insurance company’s response, you’re shocked to see a denial of benefits. Unfortunately, the insurance company determined that your disabling conditions were pre-existing.

At Bryant Legal Group, we’re used to insurance companies broadly interpreting our clients’ medical records and incorrectly applying pre-existing condition exclusions. Learn how you can fight back to get the LTD benefits that you deserve.

1. Pre-Existing Conditions Can Be Either Mental or Physical

As a cost-savings mechanism, most long-term disability plans exclude pre-existing conditions. While the definition will vary from plan to plan, pre-existing conditions usually include any chronic physical, mental, or emotional condition that you have been treated for shortly before you obtained coverage. Common pre-existing conditions include cancer, asthma, heart disease, arthritis, depression, and anxiety.

However, many long-term disability pre-existing condition clauses cover more than just a diagnosis. If you saw your doctor and complained of symptoms that were potentially related to a pre-existing condition, the insurer might attempt to deny your claim.

For example, suppose you reported moderate back pain and some numbness in your leg two months before obtaining LTD coverage. Later that year, your doctor referred you to a neurosurgeon who discovered a herniated disc in your lower back. Even though you didn’t have a clear diagnosis at the time you got coverage, the insurance company might deny your claim for disability insurance benefits.

2. Insurance Adjusters Broadly Interpret Pre-Existing Conditions to Deny LTD Claims

Before you apply for long-term disability benefits, you should always review your plan documents and identify potential obstacles. Your policy will include a very specific definition of “pre-existing condition,” as well as other exclusions. If these exclusions apply to your claim, you might be ineligible for LTD benefits.

However, these definitions are always subject to interpretation, so you should never assume that the insurance adjuster was correct in their assessment. Many times, an experienced disability lawyer can help you clarify your condition and avoid your plan’s pre-existing condition exclusion.

Refuting a pre-existing condition exclusion is not a simple process. You’ll need to carefully review the plan documents, identify all of your supporting medical records, and might even need to collect statements from your physicians and other experts.

RELATED: Common Insurer Justifications for the Denial of Private Disability Benefits

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3. Failure to Disclose Your Medical Conditions Can Mean Trouble

When you apply for a private LTD policy, you typically must provide extensive information about your medical conditions and treatment. Then, the insurance company calculates your premiums based on your likelihood of needing benefits in the short term — and may even exclude specific conditions (like cancer) from coverage.

Sometimes, when you apply for LTD benefits, the insurance company will argue that your disabling condition existed at the time you applied, and that you neglected to disclose it.

It’s always in your best interest to fully outline your known pre-existing conditions when you apply for private LTD coverage. However, it’s also understandable that you might not tell the company about that occasional twinge of hip pain that develops into excruciating pain and turns out to be severe degenerative joint disease.

In these situations, you should consult with an experienced disability insurance lawyer.

4. Group LTD Plans Typically Include Pre-Existing Condition Timelines

Group or employer-sponsored LTD plans can’t examine each covered employee’s medical records. Instead, the insurance company places limits on when it will cover a pre-existing condition. Typically, your condition will be excluded if:

  • You reported symptoms or sought medical treatment within a specific period before you obtained coverage (frequently 90 to 180 days).
  • You file for benefits within 12 months of getting LTD coverage.

Therefore, if you’re able to cope with your condition and continue working for more than a year, you might still be eligible for employer-sponsored LTD benefits. However, every LTD plan is different, and your policy could include a different time period or other exclusions.

If you need help interpreting your LTD policy and calculating your exclusion periods, please contact Bryant Legal Group for help.

Discover Bryant Legal Group’s Innovative Approach to Disability Insurance Appeals

Bryant Legal Group is one of Chicago’s most respected disability insurance law firms. We pride ourselves on our practical, client-centered approach and sophisticated legal strategies.

If you or a loved one were recently denied LTD benefits due to a pre-existing condition, it’s time to schedule a consultation with one of our skilled and experienced disability lawyers. We’ll help you understand all of your legal options and suggest meaningful next steps regarding your claim.

You can contact Bryant Legal Group by calling 312-561-3010 or completing this brief online form.

References
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Bryant Legal Group

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

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When you research disability insurance benefits, most of the information you’ll find addresses employer-sponsored disability plans. However, many people, especially self-employed individuals, purchase private or individual disability insurance as a safety net.

You might not realize that private long-term disability (LTD) insurance claims involve a different set of rules than their employer-sponsored counterparts. In this blog, the team at Bryant Legal Group answers five of our clients’ most frequent questions about individual disability insurance.

1. What’s the Difference Between Private Disability Insurance and ERISA Plans?

If you’ve been researching disability insurance claims, you’ve probably read about ERISA (Employee Retirement Income Security Act of 1974),  a federal law that governs many employee benefit programs — including LTD plans.

However, ERISA only applies to employer-sponsored benefit programs. If your company pays for your LTD insurance premiums or participation is mandatory, ERISA probably applies to your disability insurance claim.

However, if you purchased your LTD coverage individually or voluntarily, the Illinois Insurance Code and other state laws will typically apply to your claim. Importantly, the claims and appeal process under Illinois law is very different from those under the more insurance company-friendly ERISA.

While nothing compares with a personalized assessment from an experienced disability insurance lawyer, here are some common signs that you have a private disability insurance policy:

  • You are self-employed.
  • You purchased disability insurance from a broker or carrier who partners with your medical society or bar association.
  • You purchased supplemental disability coverage through an insurance broker.
  • You pay the entire premium yourself or it’s deducted from your paycheck post-tax.

If you’re unsure whether ERISA or Illinois law applies to your case, please contact Bryant Legal Group for assistance. All initial consultations are complimentary and confidential.

2. What’s the Process for Appealing a Private Disability Insurance Denial?

You may have read about how you have to exhaust your administrative remedies and complete an insurance company appeal before filing an ERISA lawsuit. Thankfully, this burdensome process isn’t mandatory in a private disability insurance claim.

While your disability insurance lawyer might decide that pursuing the insurance company’s in-house appeals process makes sense, you have the option of filing a lawsuit immediately after receiving a denial of benefits.

Once you file a private disability insurance lawsuit, Illinois’ procedural and evidentiary rules apply. That means you’ll have opportunities to negotiate with the insurance company, present new evidence and testimony, and explain why you’re eligible for LTD benefits.

RELATED ARTICLE: Common Insurer Justifications for the Denial of Private Disability Benefits

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3. Can I Request a Jury Trial?

One of the biggest differences between ERISA and private disability insurance claims is the right to a jury trial. If your LTD plan is employer-sponsored, a judge will review your claim — not a jury. However, in a private disability insurance claim, you can request a jury trial.

Many people value the chance to present their case and legal arguments to a jury of their peers. However, you need to make a timely demand for a jury trial. Typically, your disability insurance lawyer will help you navigate these procedural requirements.

4. Can I Get Pain and Suffering Damages for the Insurance Company’s Unreasonable Denial of Benefits?

While the Illinois Insurance Code does not permit compensation for your pain and suffering, it does allow for additional statutory damages when the insurance company denies your claim in “bad faith.” Under Section 155, you can receive no more than an additional:

  • 60% of the damages the judge or jury award you at trial
  • $60,000 or the difference between the jury award and the insurance company’s settlement offer

You may also be entitled to attorney’s fees.

However, you will first have to prove that the insurance company delays were either “unreasonable” or “vexatious.” If your case involves a bona fide dispute, these statutory damages may be unavailable.

Under ERISA, you cannot file a “bad faith” claim against an insurance company.

5. How Much Time Do I Have to File an Individual Disability Insurance Lawsuit?

Under Illinois law, you typically have up to 10 years to file a private disability insurance lawsuit. However, there is a loophole to this filing deadline.

Insurance companies can insert a different limitation clause in your insurance policy. Illinois courts typically uphold these contractual filing deadlines as long as they are reasonable. For example, the courts will probably uphold a three-year filing deadline, but a 30-day limitation period is unlikely to pass judicial scrutiny.

To protect your legal claims, you should immediately review your LTD policy before you apply for LTD benefits. Note the exact deadlines imposed by your policy and follow them carefully. However, if you’re working with an experienced disability insurance lawyer, they will oversee all of your filing and procedural deadlines.

Bryant Legal Group: Get Answers to Your LTD Questions

At Bryant Legal Group, we’ve been helping disabled individuals get the benefits they deserve for decades. If you have questions about your private disability insurance policy, we would love to sit down with you to help you understand your legal options.

Please schedule your free consultation with one of Chicago’s premier long-term disability law firms by calling 312-561-3010 or completing this brief online form.

References
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Bryant Legal Group

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

Request Your Free Consultation

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

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By: Stephen A. Jackson

Hennen v. Metro. Life Ins. Co., 17-3080, 2018 WL 4376994 (7th Cir. Sept. 14, 2018).

Hennen worked as a sales specialist for NCR when she sought treatment for a back injury.  She was covered under her employer’s long-term disability plan insured by MetLife.  When physical therapy and surgery failed to resolve her injury Hennen applied for LTD benefits under the plan. Acting as the administrator, MetLife agreed Hennen was disabled and paid benefits for two years.  However, the plan had a two-year limit for neuromusculoskeletal disorders subject to several exceptions, one applies to radiculopathy.  Hennen argued she was entitled to benefits beyond the 2-year limitation because she has radiculopathy.

Hennen had a history of back problems with a surgery in 2003 and 2008 including fusing three vertebrae in her lower back.  In February 2012 she suffered a new back injury and sought treatment with a specialist in physical medicine and rehabilitation.  She was diagnosed with disc herniation and was treated with physical therapy and pain management techniques.  Failing conservative treatment an orthopedic surgeon recommended surgery and operated on Hennen’s L3-L4 disc herniation in September 2012.  At follow up appointments Hennen was struggling to sit for any extended period of time and she complained of bilateral radiating pain down the buttocks, posterior thighs, and to the knee.  An MRI was ordered that showed no nerve compression.

With no surgical option Hennen sought treatment from Dr. Buvanendran, an anesthesiologist who provided pain management.  The physician treated Hennen’s leg weakness and pain with a series of epidural injection.  He then diagnosed Hennen with post-laminectomy pain syndrome and lumbar radiculopathy.  The injections failed and so the anesthesiologist implanted a spinal cord stimulator.  It provided relief for a few weeks, but symptoms returned including recurrent leg weakness and tripping.  After the device was dislodged in a fall, Hennen had multiple surgeries to fix ongoing issues with it.

With the two-year limit on the horizon MetLife contacted Hennen’s doctors for information. Dr. Buvanendran responded that Hennen was unable to work due to post-laminectomy pain syndrome and radiculopathy.

MetLife then advised Hennen that her condition fell within the neuromusculoskeletal limit and that additional documentation was needed to support a diagnosis of radiculopathy.  Hennen had another MRI.   On October 13, 2014, MetLife wrote Hennen that her benefits were scheduled to end on November 11, 2014, under the neuromusculoskeletal limitation.  Dr. Buvanendran then faxed the MRI to MetLife, which showed a new annular fissure but no herniation or stenosis. MetLife’s reviewing physician opined the MRI did not show compression that would support a diagnosis of lumbar radiculopathy.

Hennen appealed and through help of counsel challenged MetLife’s conclusion.  She also submitted an EMG by Dr. Kipta, a neurologist.  Dr. Kipta found nerve-related abnormalities on the EMG and concluded it confirmed radiculopathy in four nerve roots as did an examination that showed diminished nerve sensation.  Another board-certified neurologist Dr. Malik, who supervised Dr. Kipta, agreed with his findings.

Dr. Adewumni, MetLife’s medical director reviewed Hennen’s appeal and agreed with Dr. Kipta that the EMG supported radiculopathy.  Concluding that Hennen satisfied the radiculopathy exception MetLife consulted with Dr. McPhee to assess her condition and asked him two questions, whether the medical file supported functional limitations and if so, what those limitations were. Despite the limited scope of these questions Dr. McPhee opined the EMG was negative for active radiculopathy with no abnormal activity recorded.  He also criticized Hennen’s self-reported pain levels as implausible and he found her doctor’s notes on muscle weakness inconsistent.

MetLife utilized Dr. McPhee’s assessment to reject the medical director’s conclusion and to decide that Hennen did not meet the exception for radiculopathy.  Dr. Buvanendran responded that the EMG confirmed radiculopathy without any doubt and that Hennen suffers from radiculopathy.  In response, Dr. McPhee prepared an addendum and opined it would be helpful for Hennen to have additional electrodiagnostic testing.  MetLife did not order an IME or additional testing as Dr. McPhee had recommended nor did MetLife explain why additional testing was unnecessary. Instead, MetLife upheld its decision the next day.

Hennen sued MetLife in the Northern District of Illinois seeking plan benefits under ERISA. Upon cross-motions the court granted summary judgment for MetLife, reasoning Hennen failed to offer evidence of active radiculopathy.  The court also found MetLife’s reliance on Dr. McPhee’s opinion was reasonable.

Upon appeal to the Seventh Circuit the court agreed that Hennen had shown MetLife’s decision to terminate benefits was arbitrary and capricious.  MetLife acted arbitrarily when it credited Dr. McPhee’s opinion over the opinions of four other doctors, including Hennen’s treating physician, two neurologists with clinical training in electrodiagnostic training, and MetLife’s own medical director. The arbitrary character is demonstrated by MetLife’s choice not to follow Dr. McPhee’s recommendation to order an IME and additional testing.

To reach the conclusion that that Hennen lacked “objective evidence” of active radiculopathy MetLife relied on Dr. McPhee’s opinion based solely on a file review without examining Hennen. MetLife acted arbitrarily in rejecting the opinions of every physician who examined Hennen who concluded she had radiculopathy. Those doctors’ opinions ad substantial medical support and Dr. McPhee was the only doctor who believed that radiculopathy was absent. But MetLife never asked McPhee to diagnose Hennen or make a finding of radiculopathy.  McPhee was only asked to assess Hennen’s functional limitations once Dr. Adewumni concluded Hennen met the plan’s radiculopathy exception.

Another indication of arbitrary decision-making was MetLife’s failure to heed Dr. McPhee’s recommendation to seek further testing and an IME.  MetLife chose not to follow up on Dr. McPhee’s advice and instead treated his original opinion as definitive and immediately sent Hennen a letter affirming the denial of benefits.

As a fiduciary, MetLife owed Hennen a duty to execute faithfully the terms of the plan. Here, MetLife took an extra step for its own benefit when it referred Hennen’s file to Dr. McPhee, but when Dr. McPhee recommend that MetLife take an extra step for Hennen’s benefit – to confirm whether his lone opinion was accurate – MetLife declined to take that step.  That was arbitrary and capricious.

The fact that MetLife acted arbitrarily and capriciously does not mean that Hennen is automatically entitled to benefits.  The remedy is to remand to MetLife, so it can reassess Hennen’s claim consistent with the court’s opinion and to correct the defective procedures and provide Hennen with the procedures she sought in the first place.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

Contact Bryant Legal Group

Get the answers and insight you deserve. Our experienced disability insurance lawyers can evaluate your claim and help you understand all your legal options.

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By: Jennifer Danish

Courts infrequently award attorneys’ fees to defendants for having to defend themselves in ERISA disability benefit claims. Recently though, the Court, in James W. Hackney v. Allmed Healthcare Management, Inc., No. 3:15-CV-00075-GFVT, 2018 WL 1981902 (E.D. Ky. Apr. 27, 2018) ordered an unsuccessful plaintiff to pay the defendant attorneys’ fees and costs, because the plaintiff pursued a cause of action not generally recognized as available under ERISA.

Hackney brought a state law negligence claim against Allmed for rendering an unlicensed medical opinion about him in connection with his long-term disability benefit claim under an ERISA-governed benefit plan insured by Lincoln National. The district court construed Hackney’s claim as one for the improper denial of long-term disability benefits, which could be filed under ERISA Section 502(a)(1)(B). Hackney v. Allmed Healthcare Mgmt., Inc., No. 3:15-CV-00075-GFVT, 2016 WL 1726098, at *3 (E.D. Ky. Apr. 28, 2016), judgment entered, No. 3:15-CV-00075-GFVT, 2016 WL 1728963 (E.D. Ky. Apr. 28, 2016), and aff’d, 679 F. App’x 454 (6th Cir. 2017), cert. denied, 138 S. Ct. 236, 199 L. Ed. 2d 122 (2017).  The court also held that
even if the claim against Allmed was not precluded by a prior judgment in the LTD case against Lincoln National, the claim against Allmed could not proceed under ERISA because Allmed is not a proper defendant in an ERISA suit challenging the wrongful denial of benefits. Id.

Hackney appealed his case to the Sixth Circuit Court of Appeals, and the decision was affirmed. The Sixth Circuit, in an unpublished decision, found that the state-law
claim against Allmed is completely preempted by ERISA, because, in essence, it is about a denial of benefits under an ERISA plan, and Allmed did not owe Hackney an independent duty under the Kentucky medical licensing statute. Hackney v. AllMed Healthcare Mgmt. Inc., 679 F. App’x 454, 459, 62 EB Cases 2564 (6th Cir.), cert. denied, 138 S. Ct. 236, 199 L. Ed. 2d 122 (2017). The court also agreed with the district court that Allmed was not a proper defendant for an ERISA claim, because it was not the plan administrator. Id. Hackney filed a writ a certiorari to the U.S. Supreme Court, which was denied. Hackney v. Allmed Healthcare Mgmt. Inc., 138 S. Ct. 236, 199 L. Ed. 2d 122 (2017).

AllMed initially filed its Motion for Attorneys’ Fees on May 12, 2016. Hackney v. Allmed Healthcare Mgmt. Inc., No. 3:15-CV-00075-GFVT, 2018 WL at *1. Although the motion was briefed, the underlying matter was still pending before the Sixth Circuit and the Court denied AllMed’s motion without prejudice and directed them to re-file following the resolution of Mr. Hackney’s appeal. Id. Three days after the Sixth Circuit affirmed, AllMed refiled its motion. Id. After briefing, the Court awarded attorneys’ fees, but directed additional briefing as to the amount owed by Mr. Hackney to AllMed. Id. The Court noted, “Mr. Hackney has repeatedly objected to any award for fees and or costs, but until now, has raised no specific objections to the amounts specified in AllMed’s declarations.” Id. In reviewing this case, this appears to have been a point where Plaintiff made a vital mistake—failing to raise specific objections to the award of fees and the award of fees in the proposed amounts early on.

The district court adopted the Magistrate Judge’s recommendation to award Allmed attorneys’
fees in the amount of $81,589.95 and expenses in the amount of $1,520.35. The Court stated:

Even though Mr. Hackney did not object to the claimed hours prior to Judge Atkins’s Recommended Disposition, he now files timely objections to the award. [R. 59.] However, only a few of these objections are adequately specific, and many of his objections lack merit. Mr. Hackney begins by filing several “Specific Objections to R&R,” and “General Issues and Additional Objections,” all of which fail to identify specific factual or legal issues from the Report and Recommendation, instead objecting to an award of any fees at all. The Court is not required to conduct a de novo review on such generalized objections. Robert v. Tesson, 507 F.3d 981, 994 (6th Cir. 2007); Howard v. Sec’y of Health & Human Servs., 932 F.2d 505, 509 (6th Cir. 1991).

Hackney v. Allmed Healthcare Mgmt. Inc., No. 3:15-CV-00075-GFVT, 2018 WL at *2.

Hackney identified four “Specific Objections to R&R,” in which he objected to any award of attorneys’ fees and costs based on his belief that the court should not have awarded fees and costs to AllMed at all. Id. The Court indicated that these were not objections to Judge Atkins’s Recommended Disposition, which merely addresses the amount of award, and that such objections were appropriately addressed in a motion under Fed. R. Civ. Pro. 60, which Hackney did not file. The Court summarized, “Mr. Hackney merely attempts to restate his displeasure with the Court’s previously ruling, and therefore, the Court refuses to address this objection. See Moore v. Prevo, 379 F. App’x 425, 428 n.6 (6th Cir. 2010); Murr v. United States, 200 F. 3d 895, 902 n.1 (6th Cir. 2000).” Id. And the Court concluded, “Mr. Hackney has had ample opportunity to address AllMed’s request and has, instead, used that opportunity to argue he should not be required to pay fees and costs at all. This objection also lacks merit.” Hackney v. Allmed Healthcare Mgmt. Inc., No. 3:15-CV-00075-GFVT, 2018 WL at *3.

Following these objections, Hackney addressed “General Issues and Additional Objections,” again outlining why AllMed should not be awarded attorneys’ fees and costs. Id. He claims neither party can satisfy the ERISA fee statute because Hackney never asserted an ERISA claim. The Court was unpersuaded and wrote, “This argument has been addressed ad nauseam. [R. 28; R. 37; R. 53; R. 58.] This Court and the Sixth Circuit have both determined the claim was governed by 29 U.S.C. § 1132. Id. Accordingly, the Court refuses to reconsider this objection.” Id.

Hackney again stated his belief that AllMed should not be awarded fees or costs because of its failure to comply with Federal and Local Rules. Id. He then raised a new argument, stating AllMed should not recover fees and costs because they did not incur any fees. Id. Hackney asserted without adequate evidence that Lincoln National Insurance Company would indemnify AllMed for such fees and costs. Id. The Court concluded again that these objections related to this Court’s previous award of fees and costs, not to the Report and Recommendation, and declined to address this objection.

The Court addressed some of the balance of Hackney’s objections that it deemed sufficiently specific and found:

  • Allmed is entitled to fees even though the billing entries did not include dates but included the bill number, the number of hours, the bill rate, and a brief redacted summary
    of the work. The Court explained that poor record keeping could reduce a fee, not result in a denial. Id, citing Ohio Right to Life Soc., Inc., v. Ohio Elections Comm’n, 590 F. App’x 597, 603 (6th Cir. 2014); Reed v. Rhodes, 179 F.3d 453, 472 (6th Cir. 1999).
  • There is no law forbidding the award of attorneys’ fees when an attorney does not appear before the Court and simply works for a legal firm representing a party where other
    firm employees are admitted to practice before the Court. Hackney v. Allmed Healthcare Mgmt. Inc., 3:15-CV-00075-GFVT, 2018 WL at *4.
  • Allmed is entitled to recover fees opposing a motion at the Supreme Court that Hackney later withdrew and filing a response to the petition for writ of certiorari that was not
    Allmed succeeded in its opposition, because the Supreme Court denied the petition. Hackney v. Allmed Healthcare Mgmt. Inc., No. 3:15-CV-00075-GFVT, 2018 WL at *5.
  • Allmed is entitled to recover for all time spent on research, including 46 hours, totally less than 13% of the total time expended in the case. Id.
  • Allmed is entitled to recover time spent on unsuccessful efforts; “the fee will not be reduced simply because Allmed did not succeed on each motion it filed.” Id.
  • Allmed can recover time relating to communications with Lincoln National, because Hackney failed to provide any legal justification for this argument. Id.
  • Allmed is entitled to its sought-after costs even though costs labeled “copying” did not provide more detail. Id.
  • Allmed is not entitled to an additional $4,935 in fees for responding to Hackney’s objections to the award, because the issue has not been fully briefed and Hackney has not had
    the opportunity to respond. Hackney v. Allmed Healthcare Mgmt. Inc., 3:15-CV-00075-GFVT, 2018 WL at *6.

The reality is based on the language of ERISA and emphasized by this Court’s order, a plaintiff who pushes the envelope in an attempt to expand the scope of remedies available risks being found responsible for defendants’ attorney fees and costs. Plaintiffs must more creatively seek relief against third-party service providers, like Allmed, who routinely provide “paper reviews” of disability claims that can destroy the lives of claimants whose benefits are stopped in reliance on a doctor who never examined them in person and conducted a limited paper review of records—a third-party service provider with a conflict of interest between having a doctor render a fair opinion and the company’s business interests in maintaining the insurance industry’s business.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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In 1974, Congress enacted the federal Employee Retirement Income Security Act (ERISA) in order to shield plan participants from management misconduct that could affect their assets. ERISA applies to a variety of private, employer-sponsored benefits plans, including retirement, disability and healthcare plans. In the context of short-term and long-term disability insurance (where policyholders often secure such coverage through their employer), many such plans are covered by ERISA.

When a dispute arises concerning an ERISA-covered plan, it’s important that you work with a qualified Chicago ERISA attorney who has specific experience handling ERISA disputes from appeal to litigation.

ERISA Benefits Plans Both Protect and Limit Policyholders

ERISA protects plan participants in the sense that it promotes transparency and proper management of plan assets.  This is particularly useful in the context of retirement benefits plans where the plan participant has suffered losses due to the mismanagement of fund assets by the plan administrator (and their agents).  ERISA gives plan participants a cause of action against those who violate their statutorily-defined fiduciary duties.

Additionally, insurers must make their plan documents available to their policyholders upon request.

On the other hand, ERISA-covered plans can present unique challenges for policyholders in many ways.  As a plaintiff-claimant with an ERISA-covered plan, you are only entitled to recover damages equivalent to the benefits that you would have received had your benefits not been denied, undervalued or delayed.  You cannot, for example, bring a bad faith cause of action against your long-term disability benefits insurer on the basis of their “wrongful denial” of your disability claim.  You can, however, sue and recover damages equivalent to your purported benefits (as well as attorneys’ fees and costs).

ERISA is also rather stifling in the sense that it imposes a strict appeals process on potential claimants looking to challenge the decision of the insurer.  Let’s take a look.

The Appeals Process Under ERISA

If your benefits (in an ERISA-covered plan) are denied and you wish to challenge the decision of the insurer, you will have to go through a structured appeals process.

Under ERISA, Plans are required to give 180 days to file an appeal on a denial or termination of long term disability benefits. During this time you will have to gather all the relevant documentation and evidence necessary to support your arguments. This is a critical time to seek legal counsel. Bear in mind that this will likely serve as the final evidentiary record if you eventually push through to litigation. That means that any evidence that was not provided to the insurance company is unlikely to be reviewed by a court in case of further appeal.

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Contact Us Today to Speak With an Experienced Chicago ERISA Lawyer

If you are making a claim for disability benefits pursuant to an ERISA-covered plan, or if you are currently in a dispute concerning such benefits, make sure to get in touch with an experienced Chicago ERISA lawyer as soon as possible.  Here at Bryant Legal Group, P.C., we have decades of experience representing policyholders in disputes relating to their ERISA-covered insurance plan.  We understand that many policyholders may not be fully apprised of their rights under their ERISA-covered plan, and we are well-equipped to effectively handle such disputes while keeping our policyholder-clients informed of developments throughout the process.

Call (312) 561-3010 to request a consultation with one of our ERISA attorneys today.  We look forward to assisting you with your claims.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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The United States Court of Appeals for the Seventh Circuit issued a decision in Prather v. Sun Life and Health Insurance Company on December 13, 2016.

On July 16, 2013, Jeremy Prather had torn his left Achilles tendon playing basketball and after consulting with an orthopedic surgeon he scheduled surgery for July 22, 2013.  The day before surgery Prather called the surgeon’s office to complain of swelling in the lower part of his leg and he reported that an area of the calf was both sensitive and warm to the touch.  The surgeon told Prather to elevate the leg. Surgery the following day was uneventful and Prather returned to work on August 2. However, four days later he collapsed at work, went into cardiopulmonary arrest and died the same day as a result of a deep vein thrombosis in the injured leg that had broken loose and traveled to the lung causing pulmonary embolism, cardiac arrest and death.

The plaintiff’s decedent applied for accidental death benefits under an employer group policy issued by Sun Life and governed by ERISA.  Sun Life denied coverage relying upon policy language that limited coverage to “bodily injuries . . . that result directly from an accident and independently of all other causes.”  (Emphasis added.)  Sun Life said that Prather’s death had not been the exclusive result of an accident and that it had also been the result of complications from surgical treatment.  A physician’s assistant (PA) employed by Sun Life reviewed the claim and opined that deep vein thrombosis and pulmonary embolism are risks of surgery and that even with conservative treatment, such as immobilization of the affected limb, the insured had an enhanced risk of a blood clot.  This was Sun Life’s only medical evidence.  Sun Life denied the claim on the basis that Prather’s death was a result not just of the accident but also of independent events, namely the surgery and maybe also or instead the immobilization of his leg before surgery.

Writing for the Court Judge Posner noted that Sun Life’s interpretation that that death “independently of all other causes” requires the beneficiary to disprove any possible alternative cause of death.  Posner says that can’t be right because it would give the insurer carte blanche to reject coverage in a case in which an accident is a conceded cause of death merely because there some speculative possibility that something else may also have played a role.  That would make many accident insurance contracts illusory because often there is an interval between the accident and a resulting injury and a possibility that something in that interval caused or aggravated the insured’s injury.  Here, since the accident alone may well have caused the blood clot that killed Prather, the insurance company had to present some evidence that the surgery had been a cause of Prather’s death, and it presented none. Posner rejected the opinion of the physician’s assistant since all it proved was that the surgery might have been a cause of Prather’s death.

A forensic pathologist who conducted a post-mortem examination did not attribute death to the surgery and the relevant medical literature indicates that there is a significant incidence of deep vein thrombosis (the final trigger of the pulmonary embolism) following the rupture of an Achilles tendon even if the tendon is not operated on.

Deep venous [vein] thrombosis (DVT) is a significant source of morbidity and mortality and is associated with many orthopedic procedures. Previous studies have reported highly variable DVT rates in patients with Achilles tendon rupture undergoing operative and nonoperative treatment. We performed a retrospective chart review for all patients who underwent Achilles tendon repair at our institution from January 2006 to February 2012. Patient data were collected from the electronic medical record system. A total of 115 patients were eligible for the present study. Of these patients, 27 (23.47%) with a surgically treated Achilles tendon rupture developed a symptomatic DVT either while waiting for, or after, surgical intervention, with approximately one third of these diagnosed before surgical intervention. … We have shown a high incidence of DVT after Achilles tendon rupture. We recommend a high level of suspicion for the signs and symptoms of DVT during the follow-up period.

Makhdom AM (Asim M.) et al., “Incidence of Symptomatic Deep Venous Thrombosis After Achilles Tendon Rupture,” 52 Journal of Foot & Ankle Surgery 584 (2013) (emphases added).

The Court also rejected Sun Life’s contention that the insurance contract gave it “discretion to decide what evidence was sufficient to demonstrate a disability” since that too would amount to the insurer having carte blanche to decide whether or not to honor its contract.  Posner was also not persuaded by Sun Life’s argument that “the evidence in this matter makes clear that Mr. Prather’s surgical treatment contributed to his death[,] . . . indeed, caused the forming of a blood clot in Prather’s deep veins.”  The evidence did not make that clear, all it shows is that death followed both the surgery and the accident that preceded surgery.  The medical literature describes that an accident alone can create a fatal blood clot and so far as it appears, could have done so in this case.  The day before surgery Prather reported symptoms to his surgeon that suggests that deep vein thrombosis might have formed by then.  Since Sun Life failed to make any plausible showing that the surgery, rather than the accident that necessitated the surgery, caused his death, judgement in favor of the defendant was reversed.

Sun Life’s application of the exception (“and independently of all other causes”) and the lower court’s adoption of it, raises the question:  how does an insured demonstrate to the insurer that bodily injuries resulting directly from an accident and are also independent of all other causes?  This requires the beneficiary to disprove any possible alternative cause of injury or death, an unrealistically or even impossibly high burden.  Otherwise it gives the insurer carte blanche to reject coverage in which an accident is a cause of death merely because there is some speculative possibility that something else may have played a role.  Posner rejected Sun Life’s interpretation primarily because Sun Life had no other evidence to offer except the physician’s assistant opinion that surgery or leg elevation may have been the cause of deep vein thrombosis.

A review of the lower court’s opinion reveals that it found that Sun Life had a reasonable basis to deny benefits because Prather’s death did not result directly from an accident and could be attributed, at least in part, to complications from surgery.  The lower court further acknowledged the PA’s finding that such complications contributed to Prather’s death. It is noteworthy that the lower court mentioned the post-mortem report in the fact summary but did not comment further on the forensic pathologist’s opinion that death was not attributed to the surgery. The opinion of the physician’s assistant, and not the forensic pathologist, was enough for the lower court to side with Sun Life.  Surely the Prathers deserved more.

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District court upholds insurer’s denial of LTD benefits agreeing with the insurer’s file reviewer that there are no objective findings from a psychiatric standpoint that indicates the Claimant is mentally, cognitively and/or behaviorally impaired.

In Gailey v Life Insurance Company of North America, 2016 WL 6082112 ( M.D. Penn. October 17, 2016), the Claimant was a 48 year old office manager for many years with a history of anxiety and depression.  On July 15, 2013 she reported having an emotional breakdown at work and left the office crying, shaking, and suffering a panic attack.  She was unable to return to work so Gailey’s regular therapist admitted her to an outpatient treatment program at Philhaven from August 6 through October 10, 2013.  Philhaven’s website describes that the Day Hospital/Intensive Outpatient Program provides persons the opportunity to participate daily in a structured and comprehensive program combining individual, group and activity therapies. Services are typically provided six hours each day, Monday through Friday.

Gailey did not return to work after her treatment at Philhaven and the treating therapist opined on October 18, 2013, that Gailey could not multitask, has a poor response to stress, and cannot work at present.

She sought ERISA-governed disability benefits, which had a 24 month limitation for mental/nervous disability, relying on a diagnosis from her therapist. Life Insurance Company of North America (LINA) granted disability benefits while Gailey attended in-patient therapy.  However, on November 21, 2013, a representative of LINA told Gailey that her benefit claim was being denied.  Gailey responded that she was going to kill herself using her husband’s gun.  The next day Gailey was admitted to Philhaven for inpatient treatment with diagnoses of major depressive disorder and generalized anxiety disorder.  Philhaven’s website notes that adults “needing these services have significant difficulty functioning in their homes, employment or communities. They may also be at high risk for harming themselves and/or others. They may be unable to attend to normal routines or expectations due to depression, anxiety or other mental health problems.”

On November 26, 2013, she was released from Philhaven.  The discharge summary noted appropriate affect and denied suicidal ideations.  Gailey received an official written denial letter of her claim on November 25, 2013.

During Gailey’s administrative appeal, LINA had her claim reviewed by Genex Services, LLC.  Genex hired Fred Moss, a board-certified psychiatrist to review Gailey’s medical records.  On December 28, 2014, Moss concluded Gailey had “no objective findings” that she was mentally, cognitively, and/or behaviorally impaired as of November 26, 2013.  Moss noted she did have “subjective complaints” supporting the diagnosis of Major Depressive Disorder. Mental examination findings indicated, however, Gailey was psychiatrically stable with no impairments. Thus, Moss assigned no work activity restrictions medically required due to a psychiatric condition.

Of note, the Social Security Administration awarded disability benefits to Gailey but LINA affirmed the claim denial on January 9, 2015, citing that it had more recent information to consider that warranted a different outcome.  While the information it considered was not specified in the court’s opinion, LINA cited there had been no increase in the level of care, no changes in mental status, and no additional treatment modalities to indicate Gailey was impaired after November 26, 2013.  While LINA acknowledged that Gailey attended regular weekly appointments with her therapist for “emotional regulation,” LINA deferred to the opinions of the psychiatrists that treated Gailey in Philhaven and Moss’s peer review.

Gailey filed suit and on October 17, 2016, resolving the parties’ cross motions for summary judgment, LINA’s denial of benefits was upheld by the court.  Applying a deferential standard of review the court rationalized that LINA “cited to a multitude of evidence that it considered in finding that Gailey was not ‘disabled’ under the Plan…”  This included the board-certified psychiatrist report confirming there was no objective evidence of impairment from the diagnosable mental condition, the rise of stability upon her discharge from inpatient treatment at Philhaven, an office note from the therapist indicating she was continuing to improve, another office note from the therapist noting Gailey’s communications skills were improving, and Moss’s peer review conclusion that Gailey was not disabled.

This decision is troubling for many reasons.  First, the court deferred to LINA’s position that the unidentified board-certified psychiatrist, presumably the physician at Philhaven, reported to the rise of Gailey’s psychological stability upon her discharge.  However, a rise in stability is to be expected as Philhaven aptly describes that the “focus of [inpatient] treatment is to address the crisis or behaviors which led up to the hospitalization. Attention is given to diagnosis, assessment and the selection of treatment interventions that will help to stabilize the person’s behavior or condition quickly.” Yet there is no indication that her depression and anxiety were no longer present upon discharge nor did LINA cited to any objective signs the court found present.

Further, the court never cited either the objective or subjective signs of depression and anxiety exhibited by Gailey.  Instead, the court relied on LINA’s rationale that there had been on increase in the level of Gailey’s care, no changes in mental status, and no additional treatment modalities to indicate she was impaired. LINA never describes what increase in care or additional treatment modalities it expected from Gailey yet LINA views these as necessary to demonstrate mental impairment. It is doubtful the plan requires Gailey to do so, and most mental health practitioners would find continued weekly therapy as sufficient indicia to conclude she suffers from ongoing depression and anxiety.

Lastly, while both LINA and the court seem to rely heavily upon the Gailey’s rise in stability as an indication she is not disabled, this overlooks the significance of her participation in nearly two months of daily outpatient care at Philhaven prior to receiving inpatient care after becoming suicidal.  The longitudinal picture of Gailey, who suffered from depression and anxiety for many years, is one far more complicated than simply a rise in stability after hospitalization. Both the daily outpatient care at Philhaven and inpatient course of treatment were increases of additional care and new modalities of treatment entirely overlooked by LINA as supportive of disability due to mental instability.  Of note, the Social Security Administration would credit both the inpatient and outpatient treatment as periods of decompensation sufficient to count towards evaluation of the criteria of the medical listing of mental impairments.  While LINA’s plan does not require it to reach the same conclusion, the total disregard for these periods of intensive treatment is suspect in it’s determination that Gailey is not disabled.

In summary, in the middle district of Pennsylvania both claimants and practitioners are on notice that establishing disability due to mental impairments requires thorough documentation evidencing objective indications of reduced mental functioning.

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If you work for a religiously affiliated organization, different rules may apply to your disability insurance claim. ERISA does not cover many church plans due to an exception in the lawso it’s important to understand whether your plan qualifies as a church plan before you proceed with a claim. 

To learn more about church plans and your long-term disability claim, keep reading. 

What Is a Church-Affiliated Disability or Benefit Plan? 

Ever since the Employee Retirement Income Security Act (ERISA) was created in 1974, the law has exempted church-affiliated benefit plans from its requirements. However, the definition of what qualifies as a church plan has changed over the years. 

In 2017, the Supreme Court issued its unanimous Advocate Health Care Network v. Stapleton decision, which changed the definition of a church-affiliated benefit plan for ERISA. The new definition includes pension, disability, and other defined benefit plans created or maintained by: 

  • Churches and other religious organizations 
  • Church-controlled or church-associated organizations whose principal purpose is the administration and funding of a plan for church employees (both clergy and laypeople) 

Note that the law does not require that a church or religious organization created the plan — only that such an organization maintains or runs the plan. 

Church-affiliated plans aren’t just for people who work directly for religious organizations. You may also have a church-affiliated disability plan if you work for a hospital, social services agency, school, charity, or other business that is connected to a religious denomination. 

Identifying a church plan isn’t always straightforward. Your disability insurance lawyer will need to evaluate the plan’s operations in the context of tax, labor, and benefit plan laws. 

What Happens if My Disability Plan Is Exempt From ERISA? 

Being exempt from ERISA is not necessarily a bad thing. While federal law provides powerful protections for ERISA plan beneficiariesthose protections come with very strict procedures for claims and appeals. For example, in an ERISA appeal, you cannot demand a jury trial, and there are limits on when you can submit evidence supporting your claim. 

If your disability insurance plan is exempt from ERISA, state law applies to your claims. That means you: 

  • Do not have to complete an in-house administrative appeal with the insurance company before filing a lawsuit. 
  • Can request a jury trial. 
  • Can demand additional statutory damages if the insurance company acted in bad faith. 
  • Can present new evidence throughout the litigation process. 

RELATED: 5 FAQs About Private Disability Insurance Claims 

Bring These Pieces of Information to Your Meeting With a Disability Insurance Lawyer 

If you think that you may be a beneficiary of a church plan, be prepared to answer a lot of questions at your initial meeting with a disability insurance lawyer. We don’t expect you to know all the answersbut the more information you can provide, the better. 

You can help us get to work on your claim faster if you bring the following items: 

1. Your Plan Documents 

Disability insurance policies are contractual, so you are bound by the terms outlined in your plan document and summary plan description (SPD). Before you file a claim for disability insurance benefits, it’s always a good idea to get copies of these documents since they will help you understand your plan’s exact requirements and procedures. 

2. Any Information You Have About Your Organization’s Board and Funding 

Your attorney will want detailed information about your church-affiliated organization’s operations, funding, and board structure. This information will help us determine whether your organization has a church plan as defined by law. 

If you don’t have information about your organization readily available, that’s okay — we can help you gather it. However, if you have easy access to information about your organization’s corporate structure and operations, please bring it with you. 

3. Any Correspondence From the Insurance Company or Your Employer 

If you have any letters or notices from your employer or your disability insurance plan, bring these documents with you to your initial consultation. They can help your lawyer understand the insurance company’s reasons for denying your claim as well as the timelines that apply to your appeal. 

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Bryant Legal Group: Standing Up for Employees of Church-Affiliated Organizations 

Bryant Legal Group is one of Illinois’ premier disability insurance law firms. We have a long history of successfully handling disability claims for employees of church-affiliated hospitals, medical groups, and other organizations. 

If you can no longer work due to injuries, illnesses, or chronic medical conditions, contact our office today. We’ll listen to your story and help you understand your options for compensation. 

To schedule your no-risk consultation, contact us at (312) 561-3010 or complete our quick and easy online contact form.   

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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The Supreme Court ruled that ERISA pre-empts Vermont’s statute as applied to ERISA plans in Gobeille v. Liberty Mutual Insurance Co., decided on March 1, 2016.

Liberty Mutual maintains a self-insured employee health plan and some of those employees reside in Vermont. Vermont maintains a health-claims database (an “all-payor claims database” or APCD) that requires all health insurers and self-insured health plans operating in Vermont to report claims information. That information is then made available to insurers, employers, healthcare providers, and others to review issues such as utilization, cost, and quality with respect to healthcare in Vermont.

Blue Cross Blue Shield of Massachusetts is the third-party administrator for Liberty’s health plan. Blue Cross was required to report the health-claims data to the Vermont database, but had not been doing so.  In 2011, Vermont issued a subpoena to Blue Cross demanding that it report the required data. Liberty instructed Blue Cross not to respond and then filed suit against the state seeking a declaration that the Vermont law was preempted by ERISA.  The district court ruled that the state law was not preempted so Liberty appealed. The Second Circuit reversed the district court holding that the APCD law was preempted by ERISA.

Vermont asked the Supreme Court to review the case and made two arguments. First, it argued that the Second Circuit’s decision is inconsistent with Supreme Court precedents on ERISA preemption and improperly expands the scope of ERISA preemption. Second, it argued that the decision would have a profound impact on state healthcare regulation as there are 16 states with reporting programs similar to Vermont’s.

In Gobeille, the Court concluded that ERISA overrides Vermont’s requirement to include self-insured employer plan data in the state’s APCD. The Court reasoned that Vermont’s requirements are inconsistent with ERISA’s aim of providing a “single uniform national scheme for the administration of ERISA plans without interference from laws of the several States even when those laws, to a large extent, impose parallel requirements.”

This ruling substantially undermines the growing efforts at the state level to control rising health care costs. The opinion authored by Justice Kennedy invalidates state all-payer claims database (APCD) reporting requirements for self-funded employee health plans, thus depriving states of essential information on health care utilization, pricing, and quality in the state.

It’s helpful to know that APCDs are state-run databases that collect health care claims data and provider data from all payers in the state, including private insurers. More than 16 states have similar databases, which are seen as important tools in controlling health care costs. Without the information from self-funded health plans’ data, APCDs will be deprived of a significant chunk of data about private health insurance prices and services and therefore states will not be able to adequately address the growing problem of increasing health care costs.

While immediate reaction to the ruling characterized Gobeille as a win for insurers, some health insurers and self-insured employers, particularly smaller ones with less market power, would benefit significantly from greater price transparency and regulatory efforts to restrain the pricing power of dominant health care systems.

While Justices Ginsburg and Sotomayor, as well as the federal government, emphasized the important distinction between APCD data and the data ERISA plans generally report to federal regulators about their own finances and solvency, the majority did not. Unfortunately, the majority performed a perfunctory analysis of ERISA preemption, with sweeping and potentially devastating implications for state efforts to address health care cost control.

SCOTUS Blog information on the case available at: http://www.scotusblog.com/case-files/cases/gobeille-v-liberty-mutual-insurance-company/

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On November 18, 2015, the Employee Benefits Security Administration published new proposed regulations for ERISA disability claims (RIN 1210-AB39; Regulation 29 C.F.R. §2560.503-1).  The Public Comment period runs through January 19, 2016.  I prepared and submitted the following comments regarding two of the most significant proposed changes in claims regulations for plans providing disability benefits:

Dear Assistant Secretary Borzi:

I write to offer comments on the proposed regulations for amending the claims procedure regulations applicable to disability benefit plans.  I am interested in the content of these regulations because I am an attorney whose practice is focused on the representation of claimants in ERISA-governed long term disability benefit disputes.  I am well poised to comment, because I have worked in the field since 2003 and practiced in this area of law since I became licensed in May 2009.  My experience includes handling both administrative appeals and litigating these claims.

I.  Comment on Notice for Applicable Statute of Limitations

The DOL has invited comment in the statute of limitations issues that have developed since the Supreme Court’s decision in Heimeshoff v. Hartford Life & Accid. Ins Co., 134 U.S. 604 (2013).  I agree that this is a crucial area for regulation as the Heimeshoff decision has created confusion and much litigation.  Prospective clients often come to me with claims that they can no longer pursue, because they were not provided the information necessary for them to understand what the statute of limitations was that applied to their claim.  The DOL can assist by creating standards for what is a reasonable plan-based limitations provision in the same way that the DOL used its regulatory power to create timing deadlines for the claims process in prior versions of the regulations. Since Heimeshoff left open the possibility that an internal limitations period could run before the appeals process is complete even where exhaustion is mandatory, the DOL is in a good position to clarify that such an approach would violate full and fair review required by 29 U.S.C. §1133.

Additionally, because contractual limitations periods are plan terms, the claimant should receive notice about the limitations period from the plan just as is the case with other plan terms. As the DOL aptly points out in the preamble to these proposed regulations, plan administrators are in a better position to know the date of the expiration of the limitations period and should not be hiding the ball from claimants if the plan administrator is functioning as a true fiduciary.

The additional of such a requirement is not inconsistent with case law.  One court has interpreted the existing regulations to require notice of the expiration of a limitations period. Kienstra v. Carpenters’ Health & Welfare Trust Fund of St. Louis, No. 4:12CV53 HEA, 2014 WL 562557, at *4 (E.D. Mo. Feb. 13, 2014), aff’d sub nom. Munro-Kienstra v. Carpenters’ Health & Welfare Trust Fund of St. Louis, 790 F.3d 799 (8th Cir. 2015)(“[a] description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of [ERISA] following an adverse benefit determination on review.” 29 C.F.R. § 2560.503–1(g)(iv)). This is a minority perspective.  Here, the DOL should do more than interpret its own rules; it should re-write them to remove any ambiguity.

I recommend an amendment to the regulations governing the manner and content of notification of benefit determinations on review.  29 C.F.R. §2560.503-1(j) [proposed regulation]:  the amended language should require the claims administrator to notify the claimant of the date of the expiration of any plan based limitations period and should include a definition of what is a reasonable limitations period.  Such an alteration takes care of the different courts’ views on when claims “accrue” in that it makes clear that no limitations period can start before the internal claim and appeals process is complete.  It also makes clear that there will be at least a one-year period after the completion of the plan’s appeals process in which a claimant can file suit.  The justification for this rule is that it would cut down on litigation devoted to the threshold issue of the running of the limitations period.  In addition, it may well lead to a standardization of internal limitations periods that would be salutary for both claimants and plan administrators.

Accordingly, I propose amending the proposed regulation by adding a section as follows and renumbering accordingly (added language is indicated by bolding and underlining):

29 C.F.R. 2560.503-1 (j)(6) [proposed regulation]

In the case of an adverse benefit decision with respect to disability benefits— (i) A discussion of the decision, including, to the extent that the plan did not follow or agree with the views presented by the claimant to the plan of health care professionals treating a claimant or the decisions presented by the claimant to the plan of other payers of benefits who granted a claimant’s similar claims (including disability benefit determinations by the Social Security Administration), the basis for disagreeing with their views or decisions; and (ii) Either the specific internal rules, guidelines, protocols, standards or other similar criteria of the plan relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of the plan do not exist.

(7) In the case of an adverse benefit determination on review with respect to a claim for disability benefits, a statement of the date by which a claimant must bring suit under 502(a) of the Act. However, where the plan includes its own contractual limitations period, the contractual limitations period will not be reasonable unless:

a.         it begins to run no earlier than the date of the claimant’s receipt of the final benefit determination on review including any voluntary appeals that are taken;

b.         it expires earlier than 1 year after the date of the claimant’s receipt of the final benefit determination on review including any voluntary appeals that are taken;

c.         the administrator provides notice to the claimant of the date that the contractual limitations period will run;  and

d.         the contractual limitations period will not abridge any existing state limitations period that provides for a period longer than one year.

(8) In the case of an adverse benefit determination on review with respect to a claim for disability benefits, the notification shall be provided in a culturally and linguistically appropriate manner (as described in paragraph (p) of this section).

II.  Comment on Timing of Right to Respond to New Evidence or Rationales

Claimants are frequently ambushed with new rationales or evidence during the appeal process and left with no opportunity to respond to new arguments or evidence.  Sandbagging has been a persistent problem in the ERISA appeals process and some courts have not appreciated how prejudicial this is to claimants.  In Abram v. Cargill, 395 F.3d 882, 886 (8th Cir. 2005), the court articulated the problem as follows:

[w]ithout knowing what “inconsistencies” the Plan was attempting to resolve or having access to the report the Plan relied on, Abram could not meaningfully participate in the appeals process. . . This type of “gamesmanship” is inconsistent with full and fair review.

Id.  Given that it is often very hard to supplement the record in litigation, the proposed change offers some assurance that a claimant can contribute his or her relevant evidence to the record that the court will review.  Where the claimant, as plaintiff, has the burden of proof on most issues, this only makes sense. In most litigation contexts, the party with the burden of proof is given the last word.  Here, giving the last word to the claimant during the claims appeal process is, in effect, giving claimant the right of rebuttal in litigation.

There is, however, a countervailing concern that while this extra opportunity to submit proof to the plan exists, claimants will be extending their time without benefit payments.  This is a problem that already exists and could be exacerbated. Plans have protested that giving the claimant the last word will make the internal appeals processes go on forever.  This argument is out of touch with the reality of being an ERISA disability benefits claimant.  These claimants, in my experience, would not continue the process ad nauseum while they are unable to pay their mortgages and feed their families.

The following suggestion places reasonable limits on both claimants and plan administrators and responds to the concern that claimants will have to wait too long for determinations on review. While claimants will want to make fast work of their responses because they are usually without income during this process, the type of evidence they often need to respond to new evidence or rationales by the plan may require hiring an expert such as another physician, psychologist, or vocational consultant.  These professionals are not always readily available for quick turn-arounds and, depending on the new information such experts are responding to, they may need weeks to evaluate the new information.  For this reason, claimants should have at least 60 days to respond to new evidence or rationales provided by the plan on appeal.  Moreover, the period for the decision on review to be completed should be tolled during this 60-day period.  When the claimant has responded, the plan administrator should be allowed whatever time was left under the existing regulations or 30 days, whichever is longer, to issue its determination on review.  This rule should apply whether the new information is a new “rationale” or new “evidence.”

Accordingly, I suggest the following amendment to the proposed regulation (new language indicated by bolding and underlining):

2560.503-1(h)(4)(ii) [proposed regulations]

(ii) Provide that, before the plan can issue an adverse benefit determination on review on a disability benefit claim, the plan administrator shall provide the claimant, free of charge, with any new or additional evidence  or rationale  considered, relied upon, or generated by the plan (or at the direction of the plan) in connection with the claim; such evidence must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided under paragraph (i) of this section to give the claimant a reasonable opportunity to respond prior to that date. Such new evidence or rationale must be provided to claimant before the decision on appeal is issued and the claimant must be afforded up to 60 days to respond. The time to render a determination on review will be suspended while the claimant responds to the new evidence or rationale.  After receiving the claimant’s response to the new evidence or rationale or notification that the claimant will not be providing any response, the plan will have whatever time was left on the original appeal resolution time period or 30 days, whichever is greater, in which to issue its final decision.

III.  Conclusion

Thank you for your consideration.  If I can provide any additional information that would be helpful, please let me know.

Sincerely,

s/ Jennifer M. Danish

Jennifer M. Danish

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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