McKennon Law Group, Author at McKennon Law Group

What Is ERISA?

ERISA is the Employee Retirement Income Security Act, the federal law enacted in 1974 that applies to employers’ group insurance plans. ERISA provides standards that insurers are required to meet in managing and operating group employee benefit plans. ERISA covers several types of group benefit plans, such as disability, life, and health plans, pensions, and 401(k)s. ERISA’s primary purpose is to protect the interests of employees and their beneficiaries by ensuring that employee benefit plan assets are appropriately managed and that plans are financially sound.

When an employer or plan administrator fails to abide by ERISA requirements, an employee may have grounds to bring ERISA claims in court. If you think your employer or plan administrator has failed in supporting your rights under an ERISA plan or failed in providing you plan benefits to which you are entitled, a highly experienced ERISA attorney can help you understand your options.

What Are Employers’ Main Obligations Under ERISA?

ERISA requires employers and plan administrators to manage plans responsibly and to protect the assets in the plans for the benefit of employees.

To that end, they have three primary obligations.

They must act as fiduciaries or select and choose proper fiduciaries. A fiduciary is someone who is legally obligated to protect the financial interests of another. The agencies or people who administer ERISA plans, including retirement plans and pensions, must act in the best interests of the plan participants and beneficiaries. They also must make the best possible decisions to protect plan assets. For example, an employer may not use an ERISA plan’s assets to fund business growth initiatives, as it would not be in the plan beneficiaries’ best interests. They must also choose fiduciaries who will act in the best interests of ERISA plan participants and their beneficiaries.
They must adequately inform plan participants. Employers must provide education and information to employees to help them understand the plan and make the best decision about whether to participate in the plan. For example, an employer must disclose the material terms of the ERISA plan by distributing a Summary Plan Description.
They must provide a method for handling disputes by ERISA plan participants and their beneficiaries. Employers must institute a process through which employees can file complaints when they have issues or grievances with a plan, the management of a plan, or their access to benefits. Employers must also provide an appeals process that allows employees to have a fresh set of eyes review initial benefits denials if they are not satisfied with the initial decision.

Required Reporting and Forms for ERISA

ERISA includes several notice requirements about plans and how they will be administered. This helps ensure that ERISA plans are well organized, thought out, and transparent. These requirements include:

A plan document. This written plan must name the plan administrator, describe how benefits are paid, describe claims processes, and must include language that protects participants’ privacy, for example with regard to medical information.
A Summary Plan Description. This is a shorter version of the plan document that provides highlights most relevant to plan participants. It is meant to provide plan information and transparency in a more user-friendly way.
Annual filings. Employers and ERISA plan administrators may need to file annual reports with the U.S. Department of Labor or other governing bodies.

What Are Some Common ERISA Violations?

If employers are found violate ERISA, they can face civil action or criminal charges. However, violations still occur. Some common ways employers fail to meet ERISA requirements are:

Not providing benefits owed under a plan
Not meeting time deadlines provided by ERISA to make decisions on claims for benefits
Not placing the correct information in letters denying benefits under a plan
Not appropriately funding a plan or otherwise breaching a fiduciary duty
Reducing promised benefits after they have been earned
Retaliating against employees who take action to enforce their rights by withholding or otherwise altering benefits or access to benefits.
Imposing costs or limitations on mental health coverage and treatment benefits that are not imposed on other parts of a plan
Failing to meet notice, reporting, or documentation requirements

What Can You Do to Enforce Your Rights Under ERISA?

If you believe your benefits are not being administered properly or that you are not getting what you are entitled to, you should immediately consult with an experienced ERISA claims attorney who can guide you through the process and handle the appeal of a claim denial or who can institute litigation on your behalf. ERISA provides tight time frames to appeal claim denials so you must act quickly. For example, a plan participant or beneficiary has only 60 days from the receipt of a life insurance or accidental death insurance claim denial to file an appeal. If you miss the appeal deadline, you may have missed your opportunity to litigate the claim denial.

ERISA litigation is a complex process that primarily takes place in the federal court system. As such, it is important to have an experienced ERISA lawyer on your side to file such a case or to handle an appeal. For more information about how an ERISA lawyer can help you assert and fight for your rights under ERISA, reach out to the McKennon Law Group, PC, for a free consultation.

Life insurance lapses when a (or multiple) premium payments are received by the company on the date it is due. You will generally get either a 30 or 60-day notice if you miss a payment, and when this grace period ends, if you still haven’t paid, the policy lapses.

The outcome of a lapsed policy is not uniform and will depend on the type of policy you had. You may either have a permanent life insurance lapse or a temporary life insurance lapse.

Permanent life insurance lapse. This policy will have lifelong coverage and will grow in value over time. Usually, for a permanent policy, any missed payments will be automatically covered by a loan from the value of the policy itself. This is called an automatic premium loan. If there is no money left to make the loan and a payment is missed, your policy will lapse.
Term life insurance lapse. This policy gives a more affordable coverage for a set period of time. This type of policy does not offer automatic premium loans, so missing any payments could result in the lapse of your policy.

Does Life Insurance Pay If The Insured Person Dies During The Grace Period After A Missed Payment?

Even if you have missed a payment, the policy does not lapse right away but goes into a grace period of a month or two. So what happens if the person whose life is being insured dies during this time period? Luckily, most policies will stay active during the grace period. However, you will still have to make up the payment or payments you missed in order to receive your payout. If the grace period ends and you still have an outstanding debt to your insurance company, they may deny your claim.

Given the complications that come with a pandemic, most states require insurance companies to extend their grace period as current health conditions remain the same. While this may extend your timeline, it is still important to make sure everything is paid in full as soon as possible, as it gives the insurance company less opportunity to attempt to keep your money.

What Is My Responsibility As The Policy Owner?

As the policy owner, your main responsibility you have in order to keep your policy from lapsing is to pay your premiums on time. You can set up an automatic payment from your bank account as long as you ensure there is always enough there to cover your costs. Also, be aware that premium costs are not set and may change. It is, therefore, also on you to double-check that you are paying the right amount.

Insurance companies tend to be slightly old-fashioned and communicate with regular mail over email or calling. This means any payment notices, grace period letters, or premium increase letters will be sent to the address of whatever residence the insurance has on file for you. If you move or you would like your correspondence sent elsewhere (such as to a P.O. box), you must inform the insurance company of the change. If you are in a situation where you are unable to receive mail, you will need to designate someone who can receive your notices from your insurance company.

What Is The Insurance Companies Responsibilities?

To go alongside the things a policy owner must do to keep their insurance up comes a list of obligations that the insurance companies must meet. They may differ slightly on a state-to-state basis, but generally, their responsibilities include:

Sending the policy owner (you) a premium date notice to the right address. They are meant to keep an up-to-date record of all policy owners’ current addresses to ensure they send all mail to the right place. However, many policies are denied by no fault of the policy owner simply because the insurance company sends their notices to an outdated or incorrect address.
Sending a premium notice to the policy owner in a set time period. If you don’t receive your premium due notice during the timeframe set out by your insurance company, there is a chance your policy may lapse without you even knowing. Especially if premiums are automatically taken from your bank account, it can be easy to miss that you owe the insurance company money still.
Providing a policy lapse notice that is in accordance with state laws. State laws may vary, but all are designed to protect policyholders from an insurance company wrongfully denying their policies. Lapse notices need to be specific and clear, and you know exactly when the premium is due and when the grace period would begin if payment is missed.
Sending annual notices to policy owners informing them of their right to pick someone else to receive mail for them. Some people may not be able to receive mail and also not know that they can choose a third party to get it for them. If, for example, you are in the hospital for an extended stay, you can designate a spouse, family member, or friend to receive your correspondence from the life insurance company.

How Can An Insurance Lawyer Help Me?

Life insurance denials are all too common. Often, it is not the fault of the policyholder but the insurance company that causes the policy to lapse. However, if your company failed to meet the obligations required of it, you may still be able to receive your payout, even if it was initially denied.

McKennon law group has just the team to guide you when it comes to your life insurance. Book your free consultation and learn how an experienced insurance lawyer can hold your company accountable.

Before you take out any life insurance, the company will ask you a series of questions about your medical history and current health. You may be asked about the medications you take, any diseases you have or run in your family, and any medical tests you have taken or are waiting on. The insurance company then uses the answers to these questions to determine what rate you will be given for your policy. A material misrepresentation is any lie, omission, or concealment of any facts that would affect your policy. For example, if you fail to disclose a disease that runs in your family as a way to make the insurance company see you as less of a risk, therefore getting you more coverage or a lower premium.

Even in a situation where you genuinely believed you had disclosed all the relevant information but left something out by mistake, insurance companies may claim material misrepresentation. The questions the insurance companies ask can often confuse applicants, as it is not always clear how they categorize or define certain diseases.

What Are Some Material Misrepresentation Examples?

There are four documents where material misrepresentation can potentially happen:

Your life insurance application form
Your life insurance application for reinstatement
Your life insurance policy amendment
Your life insurance application for late enrollment.

Pay extra attention when filling out any of these forms for the common kinds of material misrepresentation, such as:

Inaccurate or misrepresented criminal, financial, or employment background information
Inaccurate height and weight
Missing information on relevant doctors visits or medical testing
Inaccurate age
Not disclosing the medication you take
Failure to mention past or present substance or alcohol usage
Failure to disclose medical diagnoses or chronic illnesses
Failure to mention extreme or dangerous hobbies
Inaccurate immigration status
Failure to disclose the fact that you have other insurance policies
Inaccurate or incomplete answers on the application you insurance agent gives you

Many of the examples above can come about by accident as opposed to intentionally, but an insurance company will still claim that you are to blame and intended to commit fraud. Because of this, you should be very careful with how you approach your life insurance documents and answers and talk to a life insurance lawyer for any extra help you need.

What Happens If An Insurance Company Claims There Is Material Misrepresentation?

If a policy was issued to someone based on incorrect information, an insurance company has the right to cancel a life insurance policy. The specifics of how much insurance companies are allowed to claim material misrepresentation to avoid liability are determined on a state-to-state basis. The general rule is that in order to claim material misrepresentation, there must be both materiality and intent.

Materiality. In most states, in order for your insurance company to void or deny a policy claim based on material misrepresentation, the misrepresentation has to be material enough. In other words, the insurance company has to be able to say that had they known the correct information about you; they would not have issued you a policy, at least not at the low premium that the misrepresentation allowed. This means that if you, for example, forgot to inform the insurance company about a surgery you had previously undergone, but knowing that information would not have changed anything about the insurance company’s decision-making, they cannot then claim material misrepresentation.
Intent. Like with materiality, some states will also require an insurance company to prove that the policyholder made an intentional choice to misrepresent their information, as opposed to an honest mistake.

Because of the need for the above to prove material misrepresentation, just having some incorrect or misremembered information will not (depending on the state) be enough to keep you from a life insurance payout. Even so, in order to have your best chance at collecting your money from the insurance companies, your best bet is to contact and speak with a life insurance attorney. They will be able to guide you through the process in as hassle-free a way as possible.

How Can An Insurance Lawyer Help Me?

Whether you are at the beginning of the life insurance process or are already at a point where your company is claiming material misrepresentation, speaking to a life insurance lawyer is in your best self-interest. If, for example, it was not you but the insurance company itself that is responsible for misrepresenting your information, an experienced life insurance lawyer can help you hold them liable.

McKennon law group offers free, no-commitment consultations to any California resident who wants to collect their payout and hold their insurance company responsible. With the experienced team of McKennon lawyers behind you, life insurance companies will think twice about attempting to deny you your rightful returns.

Most mid-size and large companies provide their employees with specific benefits, such as life insurance, disability insurance, health insurance and pension benefits. Such benefits can include a defined-benefit pension plan. A defined-benefit plan is a type of retirement plan sponsored by employers. It involves a promised specific benefit that cannot be reduced once it is earned or “vested.” These plans are employer-sponsored, employer-funded benefits, and the amount you are promised as a benefit depends on the specifics of your plan. They are governed by a federal law called the Employee Retirement Income Security Act of 1974 (“ERISA”).

Find out more about defined-benefit plans, including your ability to file ERISA insurance and ERISA pension claims, from an experienced ERISA pension attorney if you believe you are being denied benefits that were promised to you and rightfully earned.

How Is the Defined Benefit Determined?

Some defined-benefits plans include a promise for a specific dollar amount. For example, you might have a promised benefit of $200 per month when you retire. More commonly, the defined benefit is calculated using some type of formula that involves factors such as your annual earnings, your age, or how long you worked with an employer.

As an example, a potential calculation might take 1% of your average monthly salary for the final five years you worked for an employer. That number might be multiplied by your total years of service to arrive at a promised benefit amount. If, for example, someone earned an average of $6,000 per month for the final five years of their service with a company, 1% would be $60 per month. If the person had 10 years of service with the company, the benefit would be $7,200.

You typically must meet eligibility requirements to earn the vested right to benefits contributed by your employer. That might mean working a certain number of years before you are fully vested. Part-time employees may be allowed to join the plan in some cases, and if they work a minimum number of hours a year, they have to be credited with a proportion of the benefits that a full-time employee might receive.

Can the Promised Benefits Be Reduced?

No, benefits you have already accrued in a defined-benefit plan cannot be reduced or taken away. However, the rate at which future benefits are accrued can be changed, which can lead to reduced benefits in the future.

For example, if a benefit is set up to accrue at a rate of $10 a month, the employer can decide to make a change to reduce the accrual rate to $8 a month starting at a certain period, such as July 2023. The $10 per month accrued prior to that date cannot be reduced once it has vested, but after July 2023, you would accrue benefits at the lower rate.

Defined-Benefit Plan Versus Defined-Contribution Plan

It is important to understand the difference between a defined benefit versus a defined contribution plan.

With a defined-contribution plan, you are not promised a specific benefit upon retirement. Instead, you can contribute to the plan via pre-tax contributions from your paycheck. Your employer also contributes funds to your account, either via a calculated benefit contribution amount or a contribution match.

You manage the investment of the funds in the account, and when you retire, you can start taking withdrawals from the total funds that have accumulated over time. One of the most familiar defined contribution plans is the 401(k).

What Is the Pension Benefit Guaranty Corporation?

The Pension Benefit Guaranty Corporation is a corporation chartered by the federal government for the purpose of guaranteeing some types of defined benefits. If your defined-benefit plan is covered by this guarantee, you will receive the promised benefits even if the plan itself is terminated.

The Pension Benefit Guaranty Corporation was created when the federal government passed the Employee Retirement Income Security Act of 1974, or ERISA. Other provisions of ERISA include required accountability of plans and the ability for participants to sue for their benefits or if they feel that a fiduciary duty has been breached by the administrators of a plan.

When to Consult an Attorney

You worked hard for your retirement benefits throughout the years, so you want to know that you can count on them to pay out as promised when the time comes. Many people base their plans for retirement, long-term care decisions, and other important financial choices on the hope that their benefits will pay out as planned, especially pension plan benefits that they have earned over time.

Unfortunately, sometimes there are issues with future pension benefits payments. They can range from clerical errors, such as someone calculating a benefit incorrectly, to serious bad faith that involves companies or plans not paying out what was promised, losing pension claims information, and not properly maintaining relevant pension plan documents. This problem is exacerbated by company mergers and acquisitions.

In these cases, working with an ERISA pension lawyer can help you fight for the benefits that are rightfully yours. A lawyer can help you understand why your benefits might be held up or not as much as you feel they should be. They can also help you navigate appeals and complaint processes and file a lawsuit if necessary to attempt to seek compensation for lost benefits, and/or you can bring breach of fiduciary duty claims, among other claims, under ERISA.

For more information on how experienced ERISA pension lawyers can help with ERISA pension claims and other employee benefits, contact the McKennon Law Group PC today.

What Are the Reasons a Life Insurance Claim Is Denied?

If your life insurance claim has been denied, there are a number of reasons an insurance company may deny a claim, among them:

The type of death not being covered by the policy (most often because the death was self-inflicted)
Exclusions in the policy apply to exclude coverage
Relevant information was not given at the beginning of the insurance process and the policy is rescinded
The policy premiums had not been timely paid

What Are a Life Insurance Company’s Responsibilities?

It is important to know what duties life insurance companies owe you, the insurance customer, so that you can properly assess whether your insurer has properly lapsed your policy. A list of common responsibilities are:

If your policy is due to lapse soon, the insurance company is obligated to send you several notices warning of the possibility your policy will lapse.
Insurance companies must send clear and obvious pending lapse notices to your correct address.
Insurance companies must follow all state laws that pertain to grace periods or notification specifications.
In some circumstances, customers who are 65 or older are owed special notification if their policy is in danger of lapsing.
Insurance companies must properly allocate the premiums paid to them.
Insurance companies must notify of your right to designate a third-party to receive insurance notices.

Depending on the circumstances of a particular case, an insurance company’s failure to follow one or more of the above obligations may preclude them from lapsing your life insurance policy and denying your claim.

What Steps Should You Take to Respond to a Life Insurance Denial Involving a Policy Lapse?

If your life insurance claim has been denied because your life policy has lapsed, there are steps you should take to respond to the denial. These steps are:

Carefully review the insurer’s denial letter. Typically, life insurance claim denials must be in writing and explain the policy terms the insurer is relying on to deny the claim and the reasons for the denial. Therefore, it is critical to carefully review the life insurance claim denial letter. You may be able to correct mistakes that may exist in the letter by providing new information to the insurer that can result in a reversal of the denial decision.
Contact your insurance company. By doing this, you can learn why you were denied and clear up any mistakes on either your or the company’s part. You also may be able to discuss what information the insurer needs to properly pay the claim. This is also your opportunity to find out what kind of documentation (such as a death certificate or proof of premiums being paid) you should have available as evidence for an appeal.
Contact a life insurance claims lawyer. You should strongly consider hiring an experienced life insurance claims attorney to assist you to give yourself the best chance at success. If the reason for the claim denial is that your policy was lapsed, you will need to know why it was lapsed and why the insurer may have improperly lapsed your policy. Laws and regulations are very complex when it comes to life insurance, and especially life insurance lapses, and an experienced life insurance claim lawyer can help you successfully navigate your rights and can adequately respond to the insurer.. Your lawyer should help you identify and organize the evidence you need and act as a go-between with the insurance company and yourself.
Gather all relevant documentation/evidence. By this point, you should know exactly why the initial claim was denied and so should have a sense of what evidence you may need. For example, evidence of payments made, premium and lapse notices, grace period notices, and other relevant letters between you and your insurer. Your lawyer will help determine what you should look for on this step.
Decide if you want to or are required to appeal the decision. Once all your evidence and argumentation is in place, you will need to submit your official appeal. This step can be done on your behalf by your lawyer as well.
Keep in communication. Once your appeal has been submitted, you or your lawyer should keep checking in with the insurance company and getting updates on the status of your case.
If your appeal is denied, consider whether you should file litigation against your insurer.

If you have any questions about life insurance, do not hesitate to schedule your free consultation with McKennon Law Group PC to determine your rights.

New Hope If Your Disability Insurance Claim is Denied

If you file a claim for long-term disability insurance benefits, and that claim is denied, arrange at once to meet with a California life and disability insurance claims attorney. That attorney will take the appropriate steps to fight for the disability insurance benefits you deserve and need.

If you have purchased long-term disability insurance through your employer, your policy is likely governed by ERISA, the Employee Retirement Income Security Act of 1974. ERISA sets minimum standards for the group insurance plans provided through private employers.

If your ERISA disability insurance claim is rejected, you will not be alone. Claims for disability benefits under ERISA are frequently rejected. If your own claim for disability benefits is denied, arrange at once to speak with a California life and disability insurance claims lawyer.

What Determines Your Eligibility for Disability Insurance Benefits?

Proving to an insurance company that you are disabled is a challenge. A doctor’s statement is usually not sufficient. Even disability claims that are approved by the Social Security Administration may be rejected by an insurance company if you are covered under a group disability policy through an employer.

It is the insurance company’s definition of a disability – and not the Social Security Administration’s definition – that will determine if you qualify for long-term disability insurance benefits.

However, in a recent California case, the Social Security Administration’s award of disability benefits played a key role in a judge’s decision in favor of the plaintiff. It is a precedent-setting decision that may help many more disability insurance applicants obtain their benefits.

What is an Administrative Record?

What is notable about Logan v. Prudential Insurance Company of America is the way the judge considered Mrs. Logan’s Social Security Disability Insurance (SSDI) award letter.

Her attorneys at McKennon Law Group PC filed a motion to include the SSDI award letter with the administrative record of the case because it was evidence that Mrs. Logan was in fact disabled and because the award letter was not available until after the case’s administrative record had already been prepared.

Generally speaking, new evidence may not be introduced in these cases. When a federal judge hears an ERISA case, the administrative record is typically the only evidence considered. It includes every document provided by the plaintiff or the plan administrator that is pertinent to the case.

Why Was Logan v. Prudential Insurance Company of America Important?

The motion to include the SSDI award letter with the administrative record of Mrs. Logan’s case was denied. However, the judge wrote that the “Social Security Administration’s decision . . . corroborates [Mrs.] Logan’s own and her doctors’ accounts of her disabling pain.”

While the SSDI award letter did not become part of the administrative record, the simple fact that the SSDI award letter was issued was considered supporting evidence for Mrs. Logan’s claim.

As a result of Logan, a court can now use the issuance of an SSDI award letter to support a disability insurance claim even if the award letter is not included in the administrative record of the case.

What if Your Own Disability Insurance Claim is Denied?

If your own ERISA-based disability insurance claim is denied, consult a California life and disability insurance claims attorney and appeal that denial. Your lawyer will help you prepare an appeal and ensure that you are compliant with ERISA guidelines.

U.S. District Courts have jurisdiction over ERISA-related cases. If you file an administrative appeal with the insurance company to no avail, your California life and disability insurance claims lawyer may then bring a lawsuit against the insurance company in federal court.

After Logan v. Prudential Insurance Company of America, if you have been awarded disability benefits by the Social Security Administration, your lawsuit against an insurance company that has denied your disability claim is now more likely to prevail.

If you need ERISA disability or life insurance benefits and your claim has been rejected, act now, and promptly schedule a consultation with a California life and disability insurance attorney such as the highly successful and experienced team for ERISA Claims at McKennon Law Group PC.