McKennon Law Group, Author at McKennon Law Group

When a disability insurance claim is denied, the process of challenging that wrongful denial can be daunting. At McKennon Law Group PC, we represent policyholders in their insurance disputes and help guide our clients through the complex insurance claims process. We pride ourselves on the relationships we build with our clients and work hard to ensure that our clients understand the status of their matter every step of the way.

As part of our firm’s dedication to serving insureds, Robert J. McKennon, the firm’s founder, answered some of the most frequently asked questions regarding disability insurance benefits and the Employee Retirement Income Security Act, or ERISA. In the Q&A, Mr. McKennon briefly explains the role of ERISA, the body of law that governs most employer-sponsored group benefit plans. He also briefly discusses insurance bad faith, which governs most individual disability insurance policies. Additionally, Mr. McKennon covers some common misconceptions regarding the disability insurance claims handling process, as well as the remedies available to an insured should they successfully overturn their wrongful denial.

At McKennon Law Group PC, we believe in establishing lasting relationships with our clients and providing the highest quality of legal services, with integrity. Part of that requires effective communication and taking the time to respond to your questions. If your claim for life, retirement, health, short-term disability or long-term disability benefits has been denied, you can call (949) 387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling both ERISA insurance claims and non-ERISA state law insurance bad faith claims.

This was issued as a press release and appeared in numerous legal and non-legal publications. To see if Mr. McKennon answered your questions, please review the press release in full, below.

Attorney Robert J. McKennon Educates Policyholders on ERISA and Disability Insurance Claims

Southern California insurance litigation attorney Robert J. McKennon, of McKennon Law Group PC, examines four common insurance law issues.

NEWPORT BEACH, Calif. (PRWEB) October 25, 2017

Robert J. McKennon, founder of McKennon Law Group PC, which represents policyholders in their insurance disputes with insurers, asks and answers the top four most frequently asked questions concerning insurance law.

No. 1: What is ERISA? The Employee Retirement Income Security Act of 1974, ERISA, governs most employer-sponsored group benefit plans, including plans that provide health insurance, disability insurance and life insurance to employees.

“ERISA protects employees and requires that plan and claim administrators adhere to strict standards and deadlines when resolving disputes,” said McKennon. “As such, litigation under ERISA is very different from other forms of litigation, even other insurance litigation.”

No. 2: How do I get my disability benefits claim paid? Most people think that simply providing the insurance company with their medical records will be enough to support a claim for disability benefits. “In a perfect world that would be the case, but insurance companies are not typically interested in making it easy for people to collect their benefits,” noted McKennon. “If your claim is denied, the best thing you can do is hire an attorney who has experience dealing with insurance companies, which will greatly increase your odds of getting your claim paid.”

No. 3: What are my remedies if I sue the insurance company over my disability, life or health insurance claim and win? The remedies available to someone insured under an individual disability insurance policy are very broad and under a breach of contract claim include past due benefits and all future benefits. Under a bad faith claim, damages include emotional distress damages, economic damages and other compensatory and consequential damages, punitive damages, attorneys’ fees and interest.

“If the policy is issued through an employer to provide coverage to eligible employees, the remedies are very different. These are referred to as ‘group’ policies,” added McKennon. “Most people who have life, health and disability insurance are covered under group policies. Because most group policies are governed by ERISA, the remedies available to insureds are much more limited. If an individual insured under an ERISA group policy prevails at trial, he or she is only entitled to past due benefits, interest and attorneys’ fees.”

No. 4: What is insurance bad faith? “If you purchased an individual life, health or disability insurance policy, ERISA will not apply to your claim,” stated McKennon. “Instead, separate principles of tort law govern your claim, which includes what is referred to as ‘insurance bad faith.’ Litigation of an insurance bad faith claim involves proving that the insurer denied a claim or other policy benefit unreasonably or without proper cause. If a claimant can prove that the insurer acted with fraud, oppression or malice, punitive damages may be awarded.”

About Robert J. McKennon, McKennon Law Group PC
Robert J. McKennon represents individuals and corporations in insurance litigation matters in state and federal court. He has an AV Preeminent rating from Martindale-Hubbell and a “Superb” Avvo rating. He has been awarded the Super Lawyer designation every year since 2011. Practice areas of McKennon Law Group PC include bad faith insurance, disability insurance, life insurance, ERISA/employee benefits, health insurance, long-term care, property and casualty insurance, directors and officers liability insurance, professional liability insurance, insurance agent and broker liability, business litigation and unfair competition and unfair business practices. For more information, please call (949) 387-9595, or visit https://mslawllp.com.

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In the October 9, 2017 Los Angeles Daily Journal, Robert J. McKennon and Stephanie L. Talavera of the McKennon Law Group PC published a column entitled “An Agent of the Insurer,” covering a very important new Ninth Circuit Court of Appeals case, Salyers v. Metro. Life Ins. Co., 2017 DJDAR 9291 (Sept. 20, 2017). The article details the case’s key holdings, as it establishes federal ERISA common law rules that follow California’s employer-friendly rules. The decision provides a solid foundation for future ERISA plan participants and beneficiaries to vigorously attack ERISA coverage denials on theories of estoppel, waiver and breach of fiduciary duty.

On August 31, 2017, the California Court of Appeal discussed a variety of topics touching upon important matters in insurance “bad faith” litigation in Pulte Home Corp. v. Am. Safety Indemnity Co., 14 Cal.App.5th 1086 (Aug. 31, 2017). In this blog, we discuss the case in detail as well as the potential benefits the opinion provides to insureds’ future claims for bad faith. Before we discuss the details of the case, we first address the basics of insurance bad faith. Next, we detail the issues addressed in the case, the facts of the case, the court’s reasoning and ultimate rationale. Finally, we address the Pulte’s broader impact, solidifying the insurer’s good faith duty to interpret ambiguous policy provisions in favor of the insured.

What is Insurance Bad Faith?
Before we discuss Pulte, we first need to briefly cover the basics of a claim for relief called “insurance bad faith.” Insurance bad faith relies on the underlying insurance contract, but more than a breach of contract claim, a bad faith claim asserts that the insurer breached the contract’s implied promise of good faith and fair dealing. Unlike the express provisions of the insurance policy contract, the implied promise requires that the insurer refrain from conduct that unreasonably or without proper cause harms the insured’s right to benefits under the insurance contract, it is said to have acted in “bad faith.”

The courts have established several well-defined duties that, if the insurer fails to perform them, can result in a breach of the implied covenant of good faith and fair dealing. For example, an insured may show bad faith by establishing that the insurer failed to meet its duty to conduct a thorough and fair investigation into all possible bases for coverage. Determining whether the insured has acted in bad faith is important because it directly affects the insured’s potential recovery. When an insurer acts in bad faith, the insured may have access to a substantial additional recovery, including emotional distress, consequential and punitive damages and attorney’s fees.

Pulte Home Corp. v. Am. Safety Indemnity Co.
The events leading to Pulte began in 2011 and 2013, when residents sued Pulte Home Corp. (“Pulte Home”) for defective construction. American Safety Indemnity Co. (“American Safety”) issued several sequential comprehensive general liability (“CGL”) insurance policies to three of Pulte’s subcontractors, and during 2003 to 2006, it added endorsements to those policies that named Pulte as an additional insured. American Safety failed to defend Pulte Home against the residents’ construction claims. American Safety did not defend Pulte Home because it asserted that the CGL policies did not cover the construction defects at issue. As a result, Pulte Home sued American Safety alleging that the policies did provide coverage and that it should have defended the claims for construction defect. The trial court found in favor of Pulte Home, asserting that the policies covered the construction defect claims as a matter of law. Accordingly, the trial court proceeded on claims of breach of contract and bad faith, with the bad faith claim based in part by denying the duty to defend. Ultimately, the trial court awarded contract damages for failure to defend, punitive damages and attorney’s fees.

American Safety appealed the trial court’s verdict, mounting several challenges to the judgment. Ultimately, the California Court of Appeal upheld the trial court’s substantive decision and rejected American Safety’s arguments. In doing so, the appellate court found that the trial court correctly interpreted ambiguous coverage provisions in favor of the insured when it found bad faith. As a corollary to that finding, the court also affirmed that American Safety improperly interpreted the insurance contract in its own favor, and that it did so unreasonably and in bad faith. While the appellate court did find that the trial court abused its discretion as to certain attorney’s fees that were originally based in contingency but awarded as hourly, it only directed the trial court to recalculate the fees and adjust the punitive damages award accordingly on a one-to-one ratio of compensatory damages to punitive damages.

Pulte strengthens California’s bad faith case law requiring an ambiguous insurance contract to be interpreted in favor of the insured and solidifies the principle that an insurer must interpret ambiguities favorably to the insured, or else it may be held liable for insurance bad faith.

Summary Plan Descriptions (“SPD”) under ERISA are required to be given to plan participants, and they provide plan participants with the most important summary of plan terms they need to know regarding their ERISA governed plans. ERISA requires SPDs to “be written in a manner calculated to be understood by the average plan participant.” However, plans will sometime issue numerous plan modifications which can add up quickly and require plan participants to read a series of plan modifications in addition to the original SPD in order to determine their available benefits, rights, and obligations. To further complicate matters, benefit determinations may often be made by two separate entities. A Plan Administrator may make an initial appeal decision, and a Plan Director or committee may make a second-level appeal decision. While these tactics may appear to valid despite the confusion they create, a recent Ninth Circuit Court of Appeal decision clarified that an SPD must not only be accurate but also comprehensive, and entities deciding first-level appeals are fiduciaries and cannot avoid liability for misrepresentations even if second-level appeals are made by a separate entity.

In King v. Blue Cross and Blue Shield of Illinois UPS, No. 15-55880 (Ninth Cir. Sep. 8, 2017), Linda King, the wife of a retired UPS employee, participated in a welfare retiree-benefit plan sponsored and administered by Blue Cross and Blue Shield of Illinois (“Blue Cross”). After suffering from an infection requiring immediate surgery and lengthy care, Mrs. King filed a claim under the plan for medical benefits. Blue Cross subsequently denied her claim for benefits claiming the plan had a $500,000 lifetime benefit maximum and would not cover most of her medical expenses. The plan that covered retirees of UPS was governed by a SPD that was issued in 2006 and a series of 12 material modification summaries describing amendments to the plan that were adopted since 2006. This required Mrs. King to read the 2006 SPD and the summaries of plan modifications in order to determine the current language for each benefit provision. Also, Blue Cross claimed some of the provisions applied to the employee plan but did not apply to the retiree plan, although the language in the SPD and modification summaries did not make this clear.

While the SPD mentioned a $1 million lifetime maximum, a subsequent material modification in 2010 limited the lifetime maximum to $500,000. Later, yet another material modification eliminated the lifetime benefit cap, though it was unclear if the cap applied only to the employee plan or if it included the retiree plan. After Mrs. King incurred almost $950,000 in medical bills, Blue Cross sent her an explanation of benefits stating it would only pay a small fraction of her medical bills because she already reached the $500,000 lifetime benefit maximum. Mrs. King filed her first-level appeal with Blue Cross explaining that, among other things, she was previously assured by Blue Cross that her health benefits had no limit. After her appeal was denied by Blue Cross, Mrs. King filed a secondary appeal, this time submitting her appeal to the entity designated by the policy to review secondary appeals, UPS Claims Review Committee (“CRC”). The CRC subsequently denied Mrs. King’s secondary appeal emphasizing that the lifetime maximum was limited to $500,000. Mrs. King filed a lawsuit alleging that both Blue Cross and CRC breached their fiduciary duties in violation of ERISA by failing to reasonably appraise the average plan participant that the lifetime benefit maximum applies to the retiree plan. The district court granted summary judgment to Blue Cross and CRC, and Mrs. King appealed (Mrs. King died while the suit was pending).

On appeal, the Ninth Circuit reversed the decision of the district court. After determining that lifetime benefit maximums are not barred in retiree-only plans, the Ninth Circuit Court concluded that the SPD, as amended by the subsequent modifications, violates ERISA’s statutory and regulatory disclosure requirements because it did not reasonably apprise the average plan participant that the lifetime benefit maximum continued to apply to the retiree plan. The Ninth Circuit criticized the SPD and modification summaries because all of the material modifications would need to be read in conjunction with the SPD to determine available benefits instead of either an amended SPD, cumulative summaries of material modifications, or a comprehensive table of contents being issued allowing participants to verify which SPD terms were amended by the modifications being issued. The Court also criticized improper placement of provisions and font size in the SPD and material modifications.

Blue Cross argued that it did not qualify as a fiduciary under ERISA, since UPS retained the exclusive right and discretion to interpret the terms and conditions of the plan. The Court noted that this argument rested on a misunderstanding of the fiduciary designation in ERISA which includes any person who exercises any discretionary authority or control respecting management or administration of a plan. Since Blue Cross processes and pays claims to plan participants and conducts a first-level appeal for benefit denials, it is required to interpret the plan to determine whether to pay claims a or uphold benefit denials, and any one of these abilities confers fiduciary status under ERISA. It is certain that on remand, Mrs. King (via her estate) will argue that the lifetime cap is not enforceable. The Court’s opinion suggests that this is a viable theory because of the problems with the SPD.

While many ERISA governed plans may be confusing, plan participants should be able to rely upon plan administrators to provide them with accurate information concerning their ERISA benefit plan. This case further confirms that entities rendering decisions on the provision of plan benefits need to assure that plan documents and modifications thereto are easily understood by the average plan participant and cannot escape liability for providing confusing modifications or misinformation by attempting to layer the decision-making responsibility.

We at McKennon Law Group PC represent policyholders in their life, disability, medical and other insurance disputes to assist them to get their claims paid so they can thrive financially when events in their lives overwhelm them. So, we know the importance of helping those in need. This summer, we hosted a shoe drive for Soles4Souls’ “Go Green” initiative.

For the last several months, McKennon Law Group PC and its attorneys and staff worked together to turn the shoe drive into a very successful one. Through word of mouth and official publications announcing our firm’s work for Soles4Souls in the Los Angeles Times and others, the McKennon Law Group PC received and donated over 250 pairs of shoes.

The Firm’s efforts did not go unnoticed. On August 24, 2017, McKennon Law Group PC received a letter from the charity’s CEO, Buddy Teaster, thanking the Firm for its substantial commitment to those in need. He commented that Soles4Souls recognized the successful drive required “a lot of effort and commitment” on the Firm’s part and that the Firm’s “work will help improve the lives of many hurting people around the world.”

At McKennon Law Group PC, we believe in giving back to the community, which is why we took such an interest in participating in the Soles4Souls’ initiative. We will always look for innovative ways to give back and are glad to play a role in this charity’s continued success!

If an insurance company like AXA Insurance Company (“AXA”) suddenly terminated your benefits or denied your disability or life insurance claim, the McKennon Law Group PC will fight to have your benefits reinstated or wrongful denial reversed. You can trust in our firm to aggressively pursue your right to receive benefits from life, general liability, long-term care and disability insurers like AXA. We know insurance companies better than as well as anyone because many of McKennon Law Group PC’s attorneys, including its founder, Robert J. McKennon, previously represented insurance companies. At McKennon Law Group PC, we use our significant experience and focused attention to aggressively work to get your life, long-term care and disability insurance claims paid.

In 1859, Henry Hyde left the Mutual Life Insurance Company of New York to start his own endeavor. Originally known as the Equitable Life Assurance Society of America, Equitable became a big player in the insurance industry within ten years from its founding. By 1970, Equitable introduced a line of individual variable annuity products and six years later, pioneered variable life insurance. In 1992, Equitable converted from a mutual to a stock company, with a $1 billion-dollar investment from the AXA Group, and became a member of the Global AXA Group. Shortly thereafter, AXA Group acquired National Mutual, AXA Equitable Life Insurance Company and MONY Life Insurance Company of America. Like many other insurance companies, AXA offers a wide variety of insurance products, including life insurance (term, whole, universal and variable), retirement (variable annuities and individual retirement accounts), investments (brokerage and advisory accounts as well as mutual funds) and others.

The AXA Group is a very large insurer, with 166,000 employees serving 107 million clients in 64 countries. AXA’s property and casualty business makes up over a 1/3 of AXA’s total revenue. AXA Insurance Company, a member of AXA’s P&C international network is domiciled in New York and admitted in all 50 states.

How does AXA Deny Life, Long-Term Care and Disability Insurance Claims?

AXA denies claims based on many reasons including, but not limited to, the following:

AXA asserts the proof of claim you provided does not support the life, long-term care or disability claim
AXA suggests the claimant did not provide adequate medical support for your life, long-term care or disability claim
AXA asserts you provided inadequate documentation or proof of loss evidence or that you failed to provide such evidence in a timely manner
AXA asserts the condition which is the subject of your claim is a pre-existing condition
AXA asserts the insurance application contained materially false information, and thus the policy can be rescinded
AXA asserts surveillance of the claimant suggests that you are not totally disabled
AXA asserts your policy has lapsed due to nonpayment of premium
AXA broadly interprets an exclusion in the life, long-term care or disability policy to preclude coverage for the claim

What Should Disability or Life Insurance Claimants Look for When AXA Denies a Claim for Life, Health, or Disability Insurance Benefits?

Did AXA conduct a thorough and unbiased investigation into all potential bases for coverage?
Did AXA take the opinion of its own, unqualified persons/supposed experts over the medical evidence you provided in support of your claim?
If AXA did properly retrieve relevant medical records, did they improperly misread or misinterpret those records in support of your claim?
Did AXA’s denial rely on the opinion of a reviewer that appears to be biased? Did the reviewer ignore relevant medical evidence or mischaracterize the content of a conversation with your primary care doctor?
Did AXA deny your claim without requesting an in-person medical examination, even though you were willing to be examined?
Did AXA refuse to acknowledge illness, injury or other symptoms for which only subjective evidence exists, such as mental disorders, autoimmune disorders, fibromyalgia, and chronic fatigue syndrome? Did the denial state that you failed to provide “objective evidence” in support of the illness or injury preventing you from performing the duties of your occupation?
Did AXA improperly assert that your illness or injury is a pre-existing condition, wrongly attempt to rescind the policy or simply deny the claim with the intent of wearing you down so as to pay you a lower settlement?
Did AXA improperly over-rely on surveillance of you engaging in activities as support that you can perform the activities of daily living? Did AXA do so without properly considering or characterizing the actual duties of your occupation?
Did AXA improperly over-rely on social media evidence, from accounts such as Instagram, Facebook or other forms of social media to conclude you can work?
Did AXA improperly fail to engage in a “meaningful dialogue” with you so you knew what you needed to get your claim paid?
Did AXA wrongly fail to use findings by the Social Security Administration to support your disability claim?

If you have a wrongfully denied claim for disability, life, long-term care or other insurance involving AXA, contact McKennon Law Group PC

Choosing an attorney to represent you when you after your disability, life or long-term care claim is denied is an important decision. You need a skilled, experienced and talented advocate in your corner. If your claim for health, life, accidental death or dismemberment, short-term disability or long-term disability insurance has been wrongfully denied or suddenly terminated, fill out a free consultation form or call (949) 387-9595 to schedule a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and non-ERISA, bad faith insurance claims.

Attorney Robert J. McKennon Educates Policyholders on ERISA and Disability Insurance Claims

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