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McKennon Law Group PC is proud to announce that the firm was voted the top insurance litigation law firm in the USA for 2025 by the Lawyers Worldwide Experts in Law Annual Awards. The candidates were judged on client testimonials, key cases, legal rankings, overall reputation, publication contributions, and the performance and standing of teams and individual lawyers. These awards celebrate and recognize the leading, most prolific firms, that have continually displayed a high degree of quality, tenacity, and ability to punch above their weight within their area of specialization.
In today’s evolving healthcare landscape, mental health care has taken center stage and our society continues to better understand the effects mental health can have on peoples’ well-being and ability to function productively in daily life and in their work. In recent years, mental health has emerged as a central focus within the disability insurance claims, highlighting both the necessity for comprehensive care and the challenges claimants face when their conditions extend beyond the typical benefit durations.
For many people, mental health issues such as major depressive disorder, anxiety disorders, post-traumatic stress disorder (PTSD), and bipolar disorder are not only life-altering but also lead to significant, long-term disabilities that interfere with the ability to work. For those covered under employee benefit plans governed by the Employee Retirement Income Security Act of 1974, or ERISA, the pathway to accessing mental health benefits can be complex and can include many challenges to receiving these important benefits. A common hurdle in these cases is that most long-term disability policies limit benefits to 24 or 36 months regardless of whether a person remains unable to perform his job due to his mental health condition.
What Is ERISA?
Understanding ERISA is essential to navigating this complex landscape. ERISA is a federal law that sets minimum standards for most insurance plans offered by private employers. ERISA’s primary stated goal is to protect the interests of plan participants and beneficiaries by ensuring that plan administrators adhere to strict standards of conduct and clearly communicate the terms of the plan. While ERISA does not require employers to offer specific benefits, once a plan is in place, ERISA governs how the plan is administered, including how claims must be processed and disputes resolved. This framework is intended to protect the interests of participants and beneficiaries, but when it comes to mental health disability claims, the interpretation and application of ERISA can become particularly complicated.
ERISA and Mental Health Claims
Disability claims are generally challenging and difficult to navigate, which is compounded when the claim involves a mental/nervous condition. Many physical conditions can be objectively confirmed through physical exams and imaging. If you have a bulged disc in your spine, your claim will be supported with x-rays and MRIs. Mental health conditions typically do not present themselves in a way that can be objectively proven. There is no objective physical evidence that can be reviewed for anxiety, depression, PTSD and other mental health conditions, so it is harder to demonstrate to disability insurers that you have such a condition, and if you do, how severe it is and what are your resulting restrictions and limitations. On top of that, the claims process can be incredibly stressful, presenting an additional challenge to someone living with one or more of these conditions.
As noted above, an important feature of mental health claims is that the benefit period is typically limited to 24 or 36 months, whereas physical disability benefits can be paid until the policy term, as long as you are disabled from the condition(s). This limitation can uniquely impact a claimant with a long-term or chronic mental health condition, given the stress that comes with knowing that even if you get all the benefits available to you under the policy, you will receive them for a relatively short time.
Common Challenges with ERISA Mental Health Claims
Insurance companies have a financial interest in denying disability claims, especially mental health claims. This means they will deny such a claim for many reasons, including for the fact that there is no objective evidence to prove a mental health claim. It is common for them to challenge the severity of mental health conditions. They will downplay the medical evidence and take the position that your symptoms are not severe enough to stop you from being able to work in your occupation. In addition to the benefit duration limitations, here are other common challenges:
· Ambiguity in Policy Language: The language in disability policies can be vague, leading insurers to interpret the coverage more narrowly than claimants believe is warranted, especially when defining the extent and duration of mental health impairments.
· Evidentiary Requirements: Establishing the severity and chronic nature of a mental health condition requires comprehensive and detailed documentation. Insurers often challenge whether the submitted medical evidence—such as psychiatric evaluations, treatment histories, and expert opinions—sufficiently proves the claim.
· Discrepancies in Treatment Expectations: Insurers may argue that the claimant’s condition has stabilized or improved, even when ongoing symptoms persist, which can lead to disputes over whether continued benefits are justified.
· Inconsistent Application of Standards: Variations in how different plan administrators interpret and apply policy terms can result in inconsistent outcomes, making it difficult for claimants to predict or understand decisions regarding their benefits.
· Delays and Administrative Hurdles: The process for reviewing and approving mental health disability claims can be lengthy, with administrative delays that further complicate access to timely care.
What to Do If Your Mental Health Claim Is Denied
If your ERISA disability claim is denied or if the insurance company has stopped paying your benefits before the end of the benefit period, it is imperative to understand the timeline you face and act accordingly. When you receive a denial, immediately consult with an attorney with ERISA expertise, like the attorneys at McKennon Law Group PC. You will have 180 days from receipt of a written claim denial to appeal the denial. Keep in mind the amount of time it can take to get all the necessary evidence for your appeal, like your medical records, doctor certifications, personal statements and preparation of strong arguments in support of your claim. Additionally, you should gather documentation related to the policy and document your communication with the insurance company, including calls and any evidence you send them.
If the insurance company denies your appeal, you will be able to bring a legal action against them in federal court. In many cases, especially in California, the court will decide your case under a de novo standard of review, meaning that it will review the administrative record and determine whether you are disabled as defined by the policy without giving any deference to the insurer’s prior decision. The administrative record is all the evidence available to the insurance company when it made its final determination on your claim. Any evidence that supports your claim should be submitted to the insurance company before a final decision is made on your claim. Therefore, it is crucial to gather and organize all the evidence that supports your claim when your claim is denied.
Conclusion
Mental health claims under ERISA inherently present unique challenges for claimants and can be especially stressful relative to physical claims. By understanding the claims process, challenges involved, and the importance of acting quickly to gather your evidence and consulting with an attorney, you can minimize the stress associated with the process and increase the likelihood that you get the maximum benefits available to you.
Understanding ERISA as an Employee
If you have health insurance, life insurance, disability insurance, accidental death and dismemberment insurance or retirement benefits through your employer, your plans may be covered by the Employee Retirement Income Security Act of 1974, or ERISA, a federal law governing how insurance claims and benefits must be handled.
What Is ERISA?
ERISA stands for Employee Retirement Income Security Act. This is a federal law that was passed in 1974 and has been updated multiple times to add protections and ensure compliance with other federal laws. ERISA sets minimum standards that the administrators of certain employee benefits plans must meet.
ERISA is a landmark federal statute that sets the minimum standards for retirement, health, and other welfare benefit plans offered by private-sector employers. Designed to protect plan participants and beneficiaries, ERISA imposes strict fiduciary responsibilities on those who manage and control these plans, ensuring that the interests of employees are prioritized over those of the plan sponsors. By establishing clear guidelines for plan participation, vesting, benefit accrual, and funding, ERISA has fundamentally reshaped the landscape of employee benefits, providing a consistent framework that safeguards the financial security of millions of workers.
Beyond its regulatory structure, ERISA emphasizes transparency and accountability in the administration of employee benefit plans. Plan administrators are required to provide detailed disclosures about plan features, funding levels, and participants’ rights, enabling individuals to make informed decisions about their benefits. Moreover, ERISA empowers participants with the right to seek legal recourse if fiduciaries breach their duties or if the plan fails to operate in accordance with established standards. This robust system of protections not only enhances trust in employer-sponsored benefit plans but also reinforces the commitment to fair and equitable treatment of employees across the United States.
ERISA applies to a wide range of benefits. Some types of benefits that ERISA may cover include:
- Retirement plans such as 401(k) plans, pension plans, profit-sharing plans, and Employee Stock Ownership plans;
- Health insurance plans, including medical insurance, dental insurance, and prescription drug plans;
- Disability insurance, including short-term and long-term disability coverage plans;
- Life insurance; and
- Accidental death and dismemberment plans.
What Is Covered By ERISA?
ERISA applies to employer-sponsored benefits offered by private-sector employers. It does not apply to benefits provided by government employers at the federal, state, or local levels. There are other exceptions as well, such as church-affiliated employers and self-funded policies.
ERISA governs a broad range of employee benefit plans offered by private employers, including retirement plans such as defined benefit pension plans, defined contribution plans (like 401(k)s), profit-sharing plans, and employee stock ownership plans. It also covers welfare benefit plans, which encompass health insurance, disability insurance, life insurance, and other related benefits such as severance pay and tuition assistance programs. While ERISA sets minimum standards and fiduciary responsibilities for these plans, it is important to note that it does not require employers to offer any benefits; rather, it ensures that if benefits are provided, they are managed and administered fairly and transparently.
If you believe an insurance company has improperly denied your claim and you want to know whether your benefit is covered by ERISA, you should consult with an experienced ERISA attorney.
How Does ERISA Protect You and Your Employee Benefits?
ERISA protects individuals participating in employer-sponsored benefits plans, helping to ensure that they receive the benefits they are promised fairly and transparently. ERISA provides several requirements that administrators must follow in maintaining coverage and the processing and reviewing of claims. It has time requirements for plan administrators for reviewing claims. It allows for access to seek recovery in federal court when an administrator fails to meet the requirements or otherwise acts improperly in the administration of a claim or the plan.
ERISA protects employees by establishing stringent fiduciary duties that require those managing employee benefit plans to act in the best interests of plan participants. This means that plan administrators must follow strict guidelines and procedures when investing plan assets, handling claims, and managing the overall plan. Additionally, ERISA mandates that employees receive detailed disclosures about their benefits, including information about plan features, funding levels, and the rights they have under the plan. These requirements not only ensure transparency but also help employees make informed decisions about their retirement and health benefits.
Furthermore, ERISA provides employees with the right to seek legal recourse if their benefits are mismanaged or if fiduciaries fail to uphold their responsibilities. This legal framework empowers individuals to hold employers and plan administrators accountable for any breaches of duty, thereby safeguarding the financial security and well-being of employees. By creating clear standards for benefit administration and offering a mechanism for enforcement, ERISA plays a crucial role in protecting workers’ interests and ensuring that the promised benefits are delivered in a fair and equitable manner.
ERISA Requires Certain Disclosures
ERISA requires that plans operate transparently, ensuring participants fully understand their benefits and have some insight into how plans are run. This transparency is accomplished through required disclosures of information such as Summary Plan Descriptions, Summaries of Benefits and Coverage, or regular statements of retirement account balances.
ERISA Protects Your Retirement Benefits
ERISA outlines some provisions regarding when employees become fully vested in retirement plans. It also protects your benefits once you earn them. Under ERISA, employers must keep retirement and pension funds separate from operating funds. Doing so helps ensure that employees have access to their benefits even if the employer experiences financial trouble or the employee leaves the company.
ERISA Ensures Your Right to Appeal
If your claim for benefits under an ERISA-covered plan is denied, you can appeal the decision. This is true for any type of claim covered by ERISA, including health insurance, life insurance, disability, and retirement benefits claims. These appeals must adhere to strict time deadlines, which vary depending on the type of claim. Consult with an experienced ERISA attorney as to the deadlines in your particular situation.
ERISA Protects You From Retaliation
Employers cannot act negatively against you because you asserted your rights under ERISA. They cannot fire, discipline, demote, or otherwise harass you for filing a claim or appeal, testifying in an ERISA investigation, requesting plan documents, or taking other actions supported by ERISA protections.
ERISA Lets You Continue Your Health Coverage If You Leave Your Job
One of the many updates to ERISA over the years was the Consolidated Omnibus Budget Reconciliation Act (COBRA). This ERISA amendment ensures that employees covered by an employer-sponsored health insurance plan could maintain that coverage for up to 18 to 36 months after leaving a job.
You have the right to COBRA benefits if you leave a job voluntarily, are laid off, or are fired—outside of situations that involve gross misconduct. You can also leverage COBRA benefits if you reduce your working hours and are no longer classified as full-time to maintain benefits. Your covered spouse might also be able to use COBRA benefits if you pass away or get divorced and are no longer eligible for regular benefits through your employer.
Asserting Your ERISA Rights
ERISA allows you to seek recovery by filing a lawsuit against the plan administrator, and sometimes the employer, when your claim has been improperly denied or you have been damaged by mismanagement of the plan. However, ERISA requires you to exhaust all administrative remedies prior to filing a lawsuit, which means completing whatever administrative appeals process is described in the ERISA plan documents.
If you believe that your ERISA rights are being infringed upon or that your plan administrator or insurance company is acting in bad faith, consult with an experienced ERISA attorney about your matter. Call the expert ERISA attorneys at McKennon Law Group PC at 949-504-5381.
McKennon Law Group PC is proud to announce that the firm was voted the top insurance litigation law firm in California for 2025 by the Global Law Experts (GLE) Annual Awards. The candidates were judged on client testimonials, key cases, legal rankings, overall reputation, publication contributions, speaking engagements and the performance and standing of teams and individual lawyers. GLE is one of the world’s leading online resources for locating attorneys for the services required by businesses, investors and individuals around the world with over 40,000 users visiting its website each month.
This is the 14th Year in a Row He Has Been Recognized
McKennon Law Group PC is proud to announce that its founding shareholder Robert J. McKennon has been recognized as one of Southern California’s “Super Lawyers” in insurance coverage for 2025, and appears in the 2025 edition of Southern California Super Lawyers magazine published today. Mr. McKennon has received this designation every year since 2011. Each year, Super Lawyers magazine, which is published in all 50 states and reaches more than 14 million readers, names attorneys in each state who attain a high degree of peer recognition and professional achievement. The Super Lawyer designation, the most prestigious award to be given to lawyers, is given to less than 5% of lawyers nationally after being nominated and voted on by their peers.
When filing a life insurance claim, many policyholders and beneficiaries are unaware of the complexities that community property laws can introduce. In California, community property laws can play a significant role in determining how life insurance benefits are distributed when the policy is purchased during a marriage and the married couple live in a community property state such as California. Understanding how these laws impact life insurance proceeds is crucial whether you are a policyholder, beneficiary, or dealing with a contested claim.
Four Facts About the Relationship Between Community Property and Life Insurance in California
Life insurance might seem like a simple concept. You purchase a policy and make all the required premium payments. If you or the insured party passes away, the named beneficiaries receive the contracted cash benefits.
However, life insurance is not always straightforward, and policies often come with many caveats and requirements. The same is true for accidental death and dismemberment claims and almost any other type of insurance policy. Understanding how the policy itself may impact the distribution of life insurance death benefits is critical, as is knowing when and how federal or state laws may impact your rights or benefits.
In California, one factor that can impact life insurance claims is community property laws. California is a community property state, meaning that assets acquired during a marriage are generally considered jointly owned by both spouses. This principle applies to life insurance policies purchased with marital funds. However, various factors, including divorce, separate property designations, and federal ERISA law, can complicate how life insurance benefits are ultimately distributed.
1. Life Insurance Acquired During a Marriage Is Community Property
Life insurance you purchase during a marriage is often considered community property in California. That is especially true if the life insurance premiums were paid for with marital assets. Thus, if a life insurance policy is purchased during a marriage and premiums on that policy are paid for using community funds, California law generally considers the life insurance policy to be community property. This means that both spouses have an equal ownership interest in the policy.
Issues can arise when the policyholder designates a beneficiary other than their spouse without obtaining the spouse’s consent. In such cases, a surviving spouse may be able to challenge the beneficiary designation and argue that he or she is entitled to their community property share of the proceeds. Courts will often examine the source of funds used to pay for the policy and whether the beneficiary designation violated community property laws.
This fact is most relevant in cases involving a term life policy or a life policy that accumulates cash value, such as a universal or whole life insurance policy. If such a policy is purchased during marriage and premiums are paid with community property funds, both spouses have a right to the policy’s cash value even if one spouse purchased the policy or only one person is named as a beneficiary. Moreover, concerning a term life policy that has a death benefit, a spouse who paid premiums with community property may have a claim of up to 50% of the death benefit even if he or she is not the named beneficiary.
2. Divorce Does Not Automatically Revoke Spousal Beneficiary Designations
Many family breadwinners purchase life insurance policies and name their spouses as the beneficiaries with the intent that the policies will help cover day-to-day expenses or pay off homes if the worst should happen. If a couple gets divorced, it might seem logical that the life insurance beneficiary would change. However, divorce does not automatically revoke an ex-spouse’s beneficiary designation in California.
If you get divorced and want to ensure that life insurance policy benefits go to someone other than your ex-spouse, you must change the beneficiary designation and have the ex-spouse disclaim the proceeds in a divorce settlement agreement. If this is not done, the life insurance policy will likely be deemed community property to the extent the premiums were paid with community property funds, even if the ex-spouse is not a beneficiary. Whether or not you change the beneficiary needs to be discussed as part of that process.
Consider a hypothetical example to understand how this type of situation can become complex. Imagine that Max and Eileen were married for 10 years. During their first year of marriage, they buy a whole life insurance policy on Max. By the time they get divorced, the policy’s cash value is $50,000. Max and Eileen may negotiate to divide the cash value equally through divorce. Or, they might decide that Max will continue to pay the premiums and Eileen will continue as the beneficiary as part of a spousal support agreement. Another option might be for Eileen to agree to give up any stake in the policy and for Max to change the beneficiary designation to someone else.
The outcomes can vary widely, but it is essential to understand that life insurance policies must be considered during divorce proceedings.
3. If Someone Outside of the Marriage Purchases a Policy, the Benefits Might Not Be Community Property
Not all life insurance policies are affected by community property laws. If spouses purchase a life insurance policy with marital funds but do not live in a community property state, the policy will not be considered community property. Or, if an individual purchases a life insurance policy before marriage and continues to pay the premiums with separate funds, the policy is generally considered separate property. Similarly, if a third party—such as a parent or business partner—purchases a policy on a married individual, the proceeds typically do not become subject to community property claims even if the married couple lives in a community property state.
However, disputes can still arise if premiums are paid using a mix of separate and community funds. In such cases, courts may use a tracing analysis to determine the proportion of the policy considered community property versus separate property.
But, if separate property proceeds are commingled with community property and those commingled funds are used to pay for a life insurance policy, the policy benefits can become community property.
4. ERISA Law Can Supersede Some California Laws About Beneficiaries and Community Property
One important caveat to California’s community property rules is the potential impact of the Employee Retirement Income Security Act of 1974 (ERISA). ERISA governs many employer-sponsored life insurance policies and can preempt and supersede state laws regarding beneficiary designations and community property interests. If you have an employer-sponsored life insurance policy or are the beneficiary of one, you should know that ERISA generally requires that the named beneficiary of the policy must be honored regardless of whether a policyholder is married and has named someone other than their spouse, unless there is what is known as a QDRO (Qualified Domestic Relations Order) that supersedes the beneficiary designation.
A QDRO is a court-ordered legal document created after a divorce that splits and changes ownership rights related to a retirement plan or insurance policy to give the divorced spouse their share of the policy or pension plan. A QDRO can be used to designate a specific individual as the beneficiary of life insurance benefits, even if a different beneficiary is named in the policy itself.
The need to consider the impact of ERISA is not unique to life insurance. In California, retirement benefits are often community property, but ERISA rules might also impact beneficiary considerations on these assets.
When You Might Want Legal Help With a Life Insurance Claim
Getting legal help to protect your rights and support your access to life insurance benefits can be a good idea. You should contact experienced life insurance lawyers if you believe an insurance company has wrongly denied a claim or delayed payment. You should also contact an experienced life insurance lawyer if multiple people claim a right to share in the policy benefits.
The team at McKennon Law Group PC is highly experienced in handling life insurance claims and we fight aggressively to assert your rights and protect your interests in disputes with insurance companies. Contact us at 949-504-5381 for help with your life insurance claim dispute.
