GROUP INSURANCE (ERISA)
Group insurance can either be short or long term disability insurance provided by or purchased through an employer. A significant percentage of disability coverage is provided by employers to cover their employees. When an employee is a covered beneficiary of a group insurance policy purchased by an employer, any claim for benefits pursuant to the policy is governed by ERISA (Employee Retirement Income Security Act).
ERISA is a comprehensive and complicated law originally enacted to protect employees’ rights to their benefits. However, that is not the case anymore. It is now widely accepted that ERISA protects and favors insurers, and not disabled claimants. Here are some reasons why:
- The ERISA claims process is complicated – ERISA has strictly enforced rules, requirements, and time deadlines which is well known by insurance companies but not by most disabled claimants. A denied claimant has only 180 days to appeal a denied claim, and insurers have up to 90 days to consider the appeal. Before any federal lawsuit can be filed, a denied claimant must “exhaust administrative remedies” by appealing in writing to the denying insurance carrier. During the entire time, the disabled claimant is without income from his or her job.
- Evidence to Support Disability – Since appeals are based upon medical evidence in the claims file, it is crucial that the claims file is stacked with compelling medical evidence both supporting the disability and refuting the insurance carrier’s basis for denying the claim. ERISA provides insurers wide discretion to administer their own policies and to determine a disabled claimant’s eligibility for benefits under the policy. It is often very difficult – without experienced legal counsel – to prove that the insurance company wrongfully denied your claim and “abused that discretion”.
- SSDI – This can be a “Catch 22”. Most ERISA disability policies require a disabled claimant to apply for SSDI benefits. If a disabled claimant is awarded SSDI benefits, the insurance carrier usually is able to offset the claimant’s monthly SSDI benefit from any amount it may owe the claimant. Under ERISA, the insurer is not compelled to pay benefits just because a disabled claimant was awarded SSDI benefits. Conversely, if a disabled claimant is denied SSDI benefits, the insurer may use that against the disabled claimant.
- Lawsuit in Federal Court – If your case is denied, after the internal appeal process, then a suit in US District Court is the final option. Suits filed under ERISA and cases are decided by judges, not a jury. Cases are decided based on briefings of attorneys who argue based on the evidence provided in the claims file—that is why having a complete claims file before filing suit is so crucial.
- Unfair Process – In reality, few disabled persons have the time, energy, or resources to put up a fight against a strong, well versed insurance company. Insurers know this. The law firm of Rosen, Moss, Snyder & Bleefeld takes viable long term disability cases on a contingency basis. This means, if they’re not successful, you don’t pay.
The Need for Experienced, Skilled Counsel to Fight a Denied ERISA Disability Claim
It cannot be overstated that a claimant who has been turned down for disability benefits, or alternatively whose disability benefits have been terminated, will require competent counsel, well versed in ERISA litigation. It is virtually impossible and certainly impractical for a disabled claimant to even attempt to singularly traverse through the virtually endless maze of an insurance company’s “claim’s team” (i.e., the “Claim Specialist”, the “Appeal Specialist”, the “In-house Nurse,” the “Peer-Review physician,” the “Vocational Specialist,” and the “Surveillance Specialist”). The disabled claimant may have to parse through and decipher a “Labor-Market Survey, ” or a Functional Capacity Exam, or an Independent Medical Exam report, or a Peer Review Report, or the dreaded video surveillance. A claimant rarely has the skill, knowledge or the energy to successfully fight an ERISA insurer.
A disability intake can take many forms. For example, a disabled claimant may not even know he or she has insurance through their employment. Alternatively, a disabled claimant may still be working and seek counsel and guidance on the medical, financial and personal issues involved with applying for short/long term disability benefits. Most often though, a distraught claimant will unexpectedly learn through an insurer’s certified letter, that he or she was not considered to be entitled for disability coverage
A disability intake can be fairly segregated into four distinct stages. It is critical for an experienced and skilled ERISA disability lawyer to identify the claim status, and to react and respond appropriately to his client’s legal needs and interests. The four stages of an ERISA disability claim can be identified as follows:
The four stages of an ERISA disability claim can be identified as follows:
- Facilitating an application for benefits (claimant presently disabled and not working)
- Facilitating an application for benefits (claimant presently disabled but still working)
- Claimant’s application for STD/LTD benefits were either denied, or terminated and claimant still has an internal appeal available with the insurer
- Claimant’s application for STD/LTD benefits were either denied, or terminated and claimant’s administrative remedies have been exhausted (i.e., no internal appeal available with the insurer)
Each of the aforementioned claim stages has its own special issues and challenges, even for an experienced and skilled ERISA disability lawyer, and will be addressed separately below.
Facilitating an application for benefits (Presently Disabled and Not Working)
It is not unusual for a disabled person to be completely unaware that he or she has disability coverage as an employee benefit through his job. A plaintiff’s lawyer will frequently encounter such a person in the context of a workers’ compensation claim, a disabling personal injury claim, or a claim for Social Security Disability (SSDI) benefits. A disabled person who thinks he or she may have disability coverage through their employment should always inquire whether there may be additional disability coverage available through the employer. Most group disability policies provide for an offset for SSDI benefits or workers’ compensation benefits. However, many policies have a minimal monthly payment irrespective of whether the claimant is receiving any other ancillary benefit.
Facilitating an application for benefits (Presently Disabled and Working)
This scenario arises when a disabled person continues working notwithstanding their progressively deteriorating physical/medical condition, often times against the advice of their treating physician. Frequently, a person will readily acknowledge that his/her work is suffering as a result of the disability. The individual is often times justifiably fearful of being terminated from her job. It is not uncommon for an employee to have a well-paying management position and withhold their disability from peers for profoundly personal and professional reasons.
Often, it is beneficial for a disabled person in this type of situation to review and discuss with an ERISA disability lawyer, the employee handbook to ascertain what benefits are available (e.g., STD and/or LTD). Also, the employee may want to discuss whether the condition is an interim disability (i.e., STD) or rather a prolonged or permanent disability (i.e., LTD). SSDI issues should also be discussed. A claimant at this stage is often confused and terrified. Such a dilemma, is quite often a conundrum. On one hand, if you continue working and get fired for performance related issues, you may lose your standing to apply for group disability benefits. On the other hand, it is often times emotionally and financially devastating to concede to a disability and apply for benefits. Notwithstanding a disabled person’s decision on whether to continue working, it is critical to fully engage the treating physician. It is axiomatic that a disability application will not be approved without credible medical documentation.
The following hypothetical is unfortunately almost commonplace. A disabled claimant applies for disability benefits on her own with her physicians’ unequivocal and total support. She has worked for the same company for 25 years and it was only with forethought and trepidation did she go out on disability. It never even dawned on her that the insurer would even consider denying her claim. She has children and is the primary earner for her family. She has just received a certified letter from the insurer that a nurse consultant to whom she never spoke with, disagrees with her treating physicians and determined “that medical documentation does not support disability”. The insurer’s nurse consultant never even placed a call to her treating physicians.
The above scenario represents the most frequent type of ERISA disability claim. An experienced and skilled ERISA lawyer must parse through the emotional issues and pragmatically address the issues germane to the claim being denied. This includes an in-depth understanding of the insurer’s basis for denying/terminating the claimant’s claim (e.g., pre-existing condition, lack of medical records, no objective support, mental health/soft tissue, plan limitations, change from “own-occ” to “any-occ”).
For an appeal to succeed, it should directly and substantively refute the insurer’s basis for denying benefits. Each case is very fact specific. For an ERISA disability lawyer to be successful, he cannot take a “cookie cutter” approach. Open communication with the treating physicians is critical. A partial listing of “documentation” which may be supplied on appeal to the insurer is listed below:
- Detailed narrative report
- Disability form
- Updated diagnostics/surgical reports
- Functional Capacity Evaluation
- Vocational Report
- Specific Job Description
- Claimant “personal statement”
- Claimant “deposition”
Often times, a disabled claimant will appeal on his or her own and only seek legal counsel after receiving an insurer’s denial letter in which the last paragraph states “administrative remedies are exhausted”. This means no further appeals will be considered, and a claimant’s only recourse is to file a federal lawsuit. Under ERISA regulations, a claimant is not allowed to introduce any additional medical records during litigation. Also, traditional “discovery” is generally unavailable for an ERISA litigant. In these types of situations, it is often beneficial for a disabled claimant to sit down and review the complete medical and insurance claims file with an experienced ERISA disability lawyer.
ERISA Claim Buyouts
Unlike personal injury or workers’ compensation claims, ERISA insurers typically will not discuss a settlement of a disputed claim prior to the commencement of a lawsuit. However, often times, on accepted claims in which the benefits are being paid, the insurer will have real interest in discussing a lump sum buyout. In these situations, it is often prudent for the ERISA practitioner to contact the insurer to gauge settlement interest. The value of a lump-sum buyout is very case specific and involves several integrated factors to take into consideration; including, age, mortality, monthly benefits and likelihood of returning to gainful employment.