Blog - Page 10 of 111 - McKennon Law Group

Introduction

Long-Term Care (LTC) insurance is designed to cover services and expenses that are not covered by regular health insurance when the insured suffers from a chronic medical condition, disability or disorder, like dementia. These policies typically pay a set daily benefit for reimbursement for needs such as nursing home care, assisted living facilities, home healthcare, home modifications, adult day care services, and care coordination. In California, LTC Insurance is defined in Insurance Code Section 10231.2.Under the statute, LTC insurance includes:

A. Any insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital.
B. All products containing coverage for care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care.

Typical LTC policy terms provide for payment of a daily benefit amount and will pay an insured the amount incurred each day they are in a qualified care facility, up to this daily amount. There is often also a total maximum amount payable from which the benefits paid are deducted. A typical LTC policy will pay benefits if the insured is unable to perform a given number of Activities of Daily Living for a given period of time due to a loss of functional capacity, or if they demonstrate severe cognitive impairment.Many early LTC policies provide unlimited lifetime benefits. Most issued today contain a stated limit in lifetime benefits.

The Underpricing Dilemma

In the late 1990s and early 2000s, there was a trend in the insurance industry to issue LTC policies at attractive rates. Many who purchased these policies were middle-aged at the time and are now reaching the age at which they now need to receive the benefits they expect to be paid under the LTC policies. Insurers now realize that they may have issued policies with rich benefits at premiums that are too low to profitably underwrite them. In other words, insurers made erroneous pricing decisions and are now reaping the costs associated with these poor decisions.

The Denial of Legitimate Claims

As a result, insurance companies are denying legitimate claims, including using many of the same tactics that have led to substantial insurance bad faith and punitive damages awards in lawsuits over disability claim denials and LTC claim denials.

For example, LTC insurers deny claims based on illegal policy provisions. In California, insurance companies may not include policy definitions that conflict with statutory provisions as required pursuant to state law. A policy may require the insured to demonstrate “severe cognitive impairment” for a claim to be approved, and the insurer will insert its own definition of what constitutes “severe” impairment. But if “severe cognitive impairment” is defined by law, the insurer’s definition may not comply with the law. Under California law, “Severe cognitive impairment” means a loss or deterioration in intellectual capacity that is (1) comparable to (and includes) Alzheimer’s disease and similar forms of irreversible dementia; and (2) measured by clinical evidence and standardized tests that reliably measure impairment in the individual’s short-term or long-term memory; orientation as to people, places, or time; and deductive or abstract reasoning. See Ins. Code, § 10232.8(e); IRS Notice 97-31.

Insurers might also use deceptive language in their claim forms to wrongly deny claims. The covenant of good faith and fair dealing requires insurers to thoroughly inquire into all possible bases to pay a claim before denying it. See Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809 (1979). Also, the insurer has the burden of seeking out information relevant to a claim, so it must communicate with the insured and his physicians in a manner calculated to elicit an informed response. See Hughes v. Blue Cross of Northern California, 215 Cal.App.3d 832 (1989). However, insurers still will strategically word forms to allow for ambiguities to justify denials, such as using varying degrees of cognitive impairment – “mild,” “moderate,” “severe” – then denying any claims not marked “severe.” But the form will use a different definition for “severe” than the statutory definition. Such a denial may not comply with the law.

Insurers also use abusive tactics designed to take advantage of vulnerable insureds, such as insisting on multiple forms to be regularly submitted by each insured, her physicians, and her guardian, then denying the claim for any error found in any of the forms, however minor. Or the insurer will require specific information from the insured in a confusing manner that prompts the insured to call to inquire about what information to provide, then the insurer will pass the insured around from one person to another without ever providing an answer. When the insured does not provide the information on time, the insurer may deny the claim.

Clearly, LTC insurers issuing these policies did not expect to receive so many claims under their LTC policies. And the insurers have now determined that they can expect the number of LTC claims to increase substantially in the future. Because insurers are currently using these tactics to deny legitimate claims, it is likely that insurers will become even more aggressive in denying LTC claims as more claims are filed in the future.

Protecting Your Interests

If you have made a claim under an LTC policy, or plan to make a claim soon, you can expect that your claim will likely be denied. If your LTC claim is denied, you should contact a knowledgeable and experienced insurance claims LTC attorney. The attorneys at McKennon Law Group PC have the knowledge and expertise needed to determine whether a claim denial is proper and we can ensure you are placed in the best position possible to receive the LTC benefits you are entitled to under to the LTC coverage you purchased.

What is Professional Liability Insurance?

Businesses and other organizations are typically required to carry insurance, and many types of commercial insurance exist. Discussed here is one type of commercial insurance, professional liability insurance.

Like any type of insurance, professional liability insurance involves premiums paid to secure insurance coverage. When there is an event related to the policy, the insurance company or its representative is supposed to investigate the claim. If the event results in losses that are covered under the policy, the insurance company is supposed to pay out.

Professional liability insurance, which is also sometimes called professional indemnity insurance, is specifically designed to cover losses associated with errors and omissions made by certain professionals or negligence of those professionals.

Additionally, insurance bad faith claims are possible in professional liability cases, which occur when the insurer ignores its obligations under its own policies and fails to pay out claims as it should.

One of the first steps in seeking compensation from any insurance company is knowing what type of coverage your policy provides.

Who Needs Professional Liability Insurance?

Typically, businesses only need this type of insurance if they offer specific types of guidance, advice, and services. Some types of businesses that need professional liability insurance include:

Accountants
Engineers
IT and business consultants
Lawyers
Life coaches or trainers
Construction professionals

If the advice or services you provide could in any way seriously impact the business, lifestyle, or livelihood of your clients, you may need professional liability insurance. It is important to talk to an experienced professional liability insurance agent to understand what policy and insurers may be right for your company.

When Will Professional Liability Insurance Pay Out?

Professional liability cases can include a wide variety of scenarios. Some examples are:

An accountant makes a mistake on a tax return, resulting in a loss for a business. An error on the part of a professional in his or her line of expertise that causes damages for the client can result in a claim.
A construction company does not complete permit paperwork in a timely manner, resulting in long delays and more expenses for a project. This might be considered negligence because the construction company failed to act in the best interests of its client, which could result in a professional liability claim.
A business consultant misrepresents their knowledge in a specific niche area, resulting in a client relying on poor advice. If this advice leads to losses, the client might have a claim for damage.

Note that professional liability insurance does not cover criminal acts, nor does it cover breach-of-contract, negligence, or personal injury claims. Professional liability coverage may be denied where the claim arises out of activities not associated with the professional duties being insured Many businesses that are required to carry professional liability insurance also must carry public or general liability insurance to ensure they are covered in such scenarios. These policies are almost always known as claims made policies where claims must be made within a certain period of time after a known claim exists. It is critical that one a policyholder is aware of a potential claim, that a claim is made under the policy.

What Happens When You Have a Claim and the Insurance Company Will Not Pay?

Professional liability policies are almost always known as claims made policies. Claims must be made within a certain period of time after a known claim exists. It is critical that once a policyholder is aware of a potential claim, that a claim is made under the policy. The claim may be a lawsuit against your business or a letter accusing your company of professional negligence. It is critical that you immediately submit a claim to your insurance company.

If you have a claim against your business and believe that your professional liability insurance should cover the claim, you first need to submit a claim as soon as possible. In cases where the insurance company does not review the claim and agree to a settlement you feel is fair, you may need to seek further legal recourse, including filing a lawsuit for breach of contract and insurance bad faith.

Unfortunately, insurance companies often deny valid insurance claims. Most insurers have shareholders and others to whom they must answer financially, and the friction between profits and compensating business for their losses and defense costs can easily lead to bad faith practices. Insurance policies are typically long and complex, which allows insurance companies to take advantage of this to improperly deny claims and exclude coverage based on ambiguous policy language.

To reduce the chance that you deal with such insurance bad faith practices, consult an experiences insurance bad faith lawyer before you submit your claim or, if you have already submitted a claim and the insurance company has denied it, contact McKennon Law Group PC and schedule a free consultation to find out how we can help with your case.

You have experienced an accident or medical condition that has caused you to be unable to continue working. Thankfully, because you had disability coverage, you were able to submit a claim for disability benefits and were approved, and you have been collecting disability benefits. Although the benefits are not as much as your salary was, receiving the benefits alleviates much of the stress that accompanied your unfortunate situation. While things could be better, you still breathe a sigh of relief that you carried disability insurance. However, one day you receive a letter from your disability insurer saying that it has determined that you no longer meet the policy definition of total or partial disability, and you will therefore not receive any further disability benefits. You panic because you know that you will not be able to survive without the disability benefits. This type of scenario can be incredibly stressful. And it is common.

If you receive, or plan on receiving, disability benefits, it is crucial to be prepared for your disability insurance company to terminate your disability benefits after you begin receiving them. Because paying your disability benefits are a significant cost to your insurer, it has a vested interest in finding a way to discontinue paying them to you. Thus, it is reasonable to believe that your insurer is always looking for a justification for terminating your benefits, even if the reason is improper. They do this by conducting ongoing surveillance of you, reviewing your medical records to look for inconsistencies and or lack of support for your disability, conducting so called “independent” medical examinations with biased medical personnel or by waiting for a change in definition of disability under your policy to assert you no longer qualify for disability benefits.

If you have been notified that your benefits have been terminated or are going to be terminated, it is vital for you to take certain steps to protect your benefits.

What to Do if Your Disability Benefits Have Been or Are Going to Be Terminated

First, you should do carefully read the insurance company’s reason for terminating your benefits so you can understand exactly what that reason is. If you do not understand why your benefits have been or are being terminated, you will have an extremely difficult time presenting an effective appeal to your insurance company. If you have read the insurance company’s rationale and do not understand it, you should immediately consult with an experienced disability insurance attorney. The knowledgeable and experienced disability insurance attorneys at McKennon Law Group PC will provide a free consultation regarding the termination of your benefits.

Second, review the policy language to see whether it supports the insurance company’s basis for termination. It may be that your benefit period under the policy has expired and you are no longer entitled to benefits. On the other hand, it may be that the insurance company has concocted an illegitimate reason that is not supported by the policy. Without reviewing your policy, you may not understand whether the insurance company’s determination was proper.

Third, you should review the medical and other evidence supporting your disability claim. If you submitted sufficient evidence and the insurance company approved your claim, then it reversed itself without presenting new evidence or pointing out what in the existing evidence changed to prompt its determination, it is likely that the insurance company’s decision was improper. Once you have been determined to be disabled under either an “own occupation” standard (under which you are considered disabled if you are unable to perform the duties of your own occupation) or an “any occupation” standard (under which you are considered disabled if you are unable to perform any occupation for which you are suited by education, training or experience), the insurance company may not then determine that you are no longer disabled under that same standard without presenting evidence that your condition has improved. Therefore, it is important to understand the evidence supporting your claim and how the insurance company interprets that evidence.

It may be a matter of your insurer expecting to see ongoing evidence of your disability, in which case it will request additional information from you. This is entirely normal and expected unless you have an undisputed permanent disability condition. If you fail to provide that information or provide insufficient information, the insurance company may be able to properly terminate your benefits under the policy. However, if you have provided sufficient information and your insurer still terminates your benefits, there is a good chance that the insurance company acted improperly. In such a case, you should seek experienced disability insurance lawyers to assist you. The award-winning team of attorneys at McKennon Law Group PC can help you avoid having your benefits terminated, or help you recover your benefits if they have been terminated. Reach out to McKennon Law Group immediately for a free consultation.

If the insurance company has enlisted a physician to certify that you are not disabled, you may need to get your treating physician or physicians to provide additional certification supporting your position that you are disabled. Not only that, but it will also likely be necessary to present evidence that calls into question the opinions of the insurance company’s physicians or nurses.

If you are receiving ongoing disability benefits, it is important to understand the very real possibility that your insurance company will terminate them at some point. When this happens, the best thing you can do is immediately contact the expert disability insurance lawyers at McKennon Law Group PC who specialize in all types of disability insurance issues.

Has Your Disability Insurance Claim Been Denied?

If your claim for long-term disability benefits has been denied – or is denied in the future – you will need the advice and services of a California life and disability insurance claims lawyer. You should contact that lawyer as swiftly as possible after your claim is denied.

Long-term disability policies typically contain two different standards of disability: “own-occupation” and “any-occupation.” Some policies have a hybrid combination of the two.

It is important to understand the differences between the “own-occupation” and the “any-occupation” standards, as these distinctions can be confusing. Failing to understand the difference between the two standards can lead to a claim denial.

Know Your Disability Policy

It is critically important to know exactly what your long-term disability insurance policy provides. The most important provision of the policy is its definition of disability, which establishes the requirements you must meet to receive long-term disability benefits. The definition of disability varies by the policy, but it always focuses on your ability to work.

You should know that individual and group disability policies also substantially differ in their definitions of disability. Most individual disability policies do not contain “any-occupation” definitions of disability while group disability policies almost always do.

The “Own-Occupation” and “Any-Occupation” Standards.

Under an “own-occupation” standard, you are generally considered disabled if you are unable to perform the job that you were doing before becoming disabled. Most group disability policies provide that one’s “own-occupation” is based on how one’s occupation is generally performed in the “national economy” rather than how it was performed specifically for a specific employer. On the other hand, under an “any-occupation” standard, one is generally considered disabled if he or she is unable to perform any job that is realistically suited for a disability clamant based on age, education, and experience. If a disability claimant is able to work, potentially even at a lower-paying job, he or she may not be eligible for benefits under an “any-occupation” standard.

Regardless of the disability standard in your employer-provided group long-term disability insurance policy, it is important to note that you always have the option of independently purchasing supplemental coverage for added protection via individual disability insurance.

When are You Considered Disabled Under an “Own-Occupation Standard?

Under the “own-occupation” disability standard, you may be considered disabled if you are not able to perform the substantial and material tasks of the job you were working at the time you became disabled.

To prevail with a disability claim under an “own-occupation” standard, the physical requirements of your job, like walking, standing, or lifting, must be considered, and you must compile and present evidence that demonstrates why you can no longer meet those requirements.

The exact evidence you will need to prevail with a disability insurance claim will depend on the details of your job and disability, but that evidence will almost certainly include your medical records and the opinions of medical professionals who have examined or treated you. As explained above, most group disability policies have a definition of total disability that is based on how the job is performed in the national economy, not how it is performed for a specific employer.

When are You Considered Disabled Under an “Any-Occupation” Standard?

The “any-occupation” standard is more stringent than the “own-occupation” standard. Under the “any-occupation” standard, a disability claimant is considered disabled if he or she cannot perform the substantial and material tasks of any job for which he or she is reasonably qualified.

This can be a very complicated determination and insurers/employers must complete a vocational analysis that includes a transferability of skills analysis to determine what jobs may be available given the restrictions and limitations at issue.

Has Your Claim for Disability Benefits Been Denied?

If your long-term disability benefits claim is denied, or is denied in the future, [the skilled and knowledgeable attorneys at McKennon Law Group PC] a California life and disability insurance claims attorney can help you appeal the denial and help you obtain the benefits you have paid for and are entitled to.

How Will an Attorney Help You?

If you purchased disability insurance privately or through your employer, and if you believe that your claim has been wrongly denied, a California life and disability insurance claims attorney can submit an appeal to the insurance company on your behalf.

If it becomes necessary, your attorney can take your case to the federal or state courts. McKennon Law Group PC has a detailed Guide on its website available for download regarding filing long-term and short-term disability claims and getting them paid.

McKennon Law Group is Here for You

The award-winning team of disability insurance attorneys at McKennon Law Group PC is ready to help. With offices in San Francisco, Los Angeles, San Diego, and Newport Beach, California and more than seventy-five years of legal experience, we advise and represent disability and life insurance policyholders and beneficiaries throughout California and the United States. McKennon Law Group PC is committed to the highest standards of client service, professional ethics, and legal excellence. If your claim for disability benefits is denied, call McKennon Law Group PC today at (949) 504-5381 for a free consultation with one of our disability attorneys,

McKennon Law Group represents clients at every stage of the disability insurance claim process, and you pay no fee to McKennon Law Group PC until we recover your disability benefits.

Needless to say, our society is currently built upon a foundation where health insurance does not benefit everyone in all situations. In fact, health insurance companies are for profit at the end of the day, so they may prioritize their pocketbook and not fair coverage that a person needs. It is devastating to realize that in our culture health insurance is not just a given and fair for everyone. As someone who pays into health insurance, it can make the matter even more distressing if a health insurance claim denial also results in an exacerbation of a personal injury. Simply the stress of realizing that your insurance claim did not get covered can be enough to result in mental anguish and overwhelm about what happens next. Health insurance claim denials are incredibly frustrating, but there are steps that you can take to appeal or avoid them from happening.

Reasons For Denials

It may seem like there are limitless reasons why an insurer may deny payment for a certain healthcare service. Some reasons are simple and understandable, and others may be confusing and more difficult to believe. The most common reasons for denials include paperwork errors or mix-ups, questions about medical necessity, cost control, provider network issues, missing details, not following health plan rules, or the service just wasn’t covered by the plan. Unfortunately, this leaves a lot of room for potential bias or making a mistake when it comes to denying a fair claim. People are at the mercy of whoever decides whether coverage should be provided, or not. Because of all the ways that a person may have their claim wrongfully denied, it is not uncommon for people to speak with an injury lawyer for assistance. Having a lawyer’s representation to handle an insurance claim denial can make all the difference in the outcome of an appeal or litigation. An experience health insurance lawyer can walk you through the steps of appealing a denial and ensure your paperwork is strong for approval of your claim.

Byproducts of a Denial

Realizing that an expensive medical service will not be covered can affect a person’s mental health. A person may then have to wonder where they will get the money to afford this new bill. Will you have to work more hours? Will you have to find another job? What will be the consequences if you are unable to pay? These are all normal concerns that anyone facing a health service denial would probably feel. A claim denial does more than inconvenience someone, as they can become vulnerable to further injury simply because of the stress. Anyone who has ever been so distracted from a stressor can attest to how everything else may fall to the wayside. To make matters worse, someone may shortly thereafter be involved in an injury event, like a car crash or workplace accident (from overworking to afford the bill). As our friends at Cohen & Cohen can attest, dealing with more injury on top of an already difficult situation can become a byproduct of a health insurance claim denial.

If you have a denied health insurance claim and need an experienced California health insurance attorney to review your claim denial, please contact us for a free consultation.

Judge Dale Drozd of the Eastern District of California recently brought at least some clarity to authority that in the past has allowed for only a murky, muddled understanding of how courts may handle issues of financial conflicts of interest and procedural irregularities in the context of ERISA disability claims, in Chacko v. AT&T Umbrella Benefit Plan No. 3, __ F.Supp.3d. __, 2023 WL 5806455 (E.D. Cal. Sept. 7, 2023).

The Plaintiff, Ruby Chacko, had been a software engineer for twenty years when she began experiencing severe pain in her eyes, neck, shoulders, and arms, as well as blurred vision, prompting her to file claims for short-term disability (“STD”) and long-term disability (“LTD”) benefits, which claims were initially approved by AT&T’s third-party claims administrator Sedgwick Claims Management Services, Inc. (“Sedgwick”). However, Sedgwick then terminated her LTD benefits after only three months on the basis that the medical evidence did not support ongoing benefits. After Sedgwick also denied her appeal, Ms. Chacko filed suit to recover her LTD benefits. Using an “abuse of discretion” standard of review, the court found that Ms. Chacko is entitled to receive LTD benefits because Sedgwick and the defendant AT&T Umbrella Benefit Plan No. 3 (“Plan”) abused their discretion in denying the claim. The two main issues the court addressed were the reviewing physician’s conflict of interest and procedural irregularities during Sedgwick’s review of the claim.

As to financial conflict of interest, the court concluded that Sedgwick’s reviewing physician, Dr. Howard Grattan, had a financial conflict of interest, not based on the amount the doctor was paid to perform a review and provide an opinion, but rather, on how much he had billed Sedgwick over a period of two years prior to his review in this matter, during which he concluded over 80% of the time that the claimant was not disabled. Ms. Chacko argued that “when the statistics show that a doctor finds an overwhelming number of claimants alleging disability to be capable of work, the court can infer from this that the doctor harbors significant bias towards finding a claimant capable of working.” Id. at *18-19. Relying on Demer v. IBM Corp. LTD Plan, 835 F.3d 893, 902 (9th Cir. 2016) (finding a financial conflict of interest where the independent physician consultants earned $125,000–$175,000 annually based on performing 200–300 reviews/addendums each year), the court agreed and noted that a financial conflict of interest’s severity is determinative of how much weight the court should give when factoring such a conflict of interest into its analysis. The reviewing physician had billed Sedgwick a relatively low amount over those two years and during that time, the proportion of claimants the physician found to be disabled was extremely low, but not as low as in the examples Ms. Chacko provided to the court. Thus, having considered these factors, the court found that there was “a conflict of interest surrounding [the physician’s] review of [Ms. Chacko’s] medical records that warrants a low-to-moderate level of skepticism,” indicating that the concept of a financial conflict of interest should be viewed on a sliding scale as opposed to a binary analysis that would result in either the existence of a conflict, or no conflict. By doing this, the court could then identify where the conflict lies on this sliding scale and apply the appropriate amount of deference, and skepticism, to the plan administrator’s claim determination.

The court then addressed the procedural irregularities in Sedgwick’s review of Ms. Chacko’s claim. The court’s reasoning was based on the concept that the presence of procedural irregularities in the claim review process brings with it heightened skepticism of the claim review, which tempers the abuse of discretion standard. Again, this factor exists on a sliding scale, such that procedural irregularities may be present that are not egregious enough to warrant de novo review rather than abuse of discretion review, but they will still result in the court giving reduced deference to the plan administrator’s claim decision. The court specified four procedural irregularities that were present in Sedgwick’s claim review process.

First, the court discussed Sedgwick’s failure to consider the physical requirements of Ms. Chacko’s job. Sedgwick had acknowledged the importance of considering the job requirements when evaluating Ms. Chacko’s claim, but it then issued a denial letter indicating that it did not consider those physical requirements. Rather than discussing the requirements of keyboarding and mousing, Sedgwick instead focused on Ms. Chacko’s job being classified as “sedentary.” Additionally, Sedgwick did not consider the physical requirements of other potential alternative jobs that Ms. Chacko may be able to perform. The court found Sedgwick’s failure to assess whether Ms. Chacko was able to perform the physical requirements of her job, as well as those of potential alternative jobs, to be a significant procedural irregularity.

Second, the court discussed Sedgwick’s reliance on a transferable skills analysis (“TSA”) that failed to consider Ms. Chacko’s keyboarding and mousing limitations despite having already approved her STD and LTD claims based on those limitations. Sedgwick performed four TSAs for Ms. Chacko’s claim; the first two indicated that she was restricted from performing even sedentary work, as even sedentary jobs still have basic physical requirements like keyboarding and mousing. However, in determining that Ms. Chacko’s LTD benefits should be terminated, Sedgwick instructed its claims representative have a third TSA and to utilize only the limitations that had been set forth in a QME report, essentially instructing her to no longer consider the keyboarding and mousing restrictions that her treating physicians continued to include in their progress notes and work status reports. The court found that Sedgwick’s conduct resulted in a procedural irregularity that warranted skepticism of Sedgwick’s claim determination. The court noted that the restrictions and limitations provided in the first two TSAs, on which Ms. Chacko’s STD and initial LTD claims were approved, were consistent with those provided by her treating physician.

Third, the court addressed Sedgwick’s reliance on Dr. Grattan’s biased and flawed pure paper reviews. The court noted that there was no evidence that Sedgwick had cherry-picked which medical records to provide to Dr. Grattan and that performing only a paper review, without also performing an independent medical exam (“IME”), is not a procedural irregularity in itself, at least not if the reviewing physician was provided all the medical records for review. However, while Sedgwick’s reliance on a paper review without an IME was not a procedural irregularity in itself, the court considered the substantive adequacy of Dr. Grattan’s paper review in determining whether Sedgwick had abused its discretion. In this case, Dr. Grattan had a history of evidently rubber-stamping conclusions provided by Sedgwick and providing cursory conclusions which were not consistent with the related medical records.

Finally, the court discussed Sedgwick’s failure to properly consider the Social Security Administration’s (“SSA”) approval of Ms. Chacko’s claim for Social Security Disability Income (“SSDI”) benefits. The court noted that while ERISA plan administrators are not bound by the SSA’s determination (as the SSA has its own set of standards and ERISA plan administrators each have their own respective standards), Sedgwick’s conduct amounted to a procedural irregularity. Sedgwick had considered only the fact that the SSA had approved Ms. Chacko’s claim for SSDI benefits but did not make any effort to obtain her SSA file in order to evaluate why her SSDI claim was approved. The court noted that in this case, the Plan was in regular contact with the attorney representing Ms. Chacko in her SSDI claim and still made no effort to evaluate the SSA’s analysis of her claim. The court noted it has been recognized that a plan does not sufficiently “grapple” with an SSDI’s contrary conclusion where the plan “merely pays lip service to the existence of a contrary SSA disability determination” and includes “standardized language” explaining that the SSA and plan use different definitions of “disability” and that unlike the SSA, private plans are not required to give special deference to the opinions of the claimant’s treating physicians. See Hertz v. Hartford Life & Acc. Ins. Co., 991 F. Supp. 2d 1121, 1129, 1131, 1142 (D. Nev. 2014). This is exactly what the Plan did in Ms. Chacko’s case. Thus, the court found that the Plan’s failure to request Ms. Chacko’s SSA file, to engage in a meaningful review of the rationale underlying the SSA’s approval of her SSDI benefits claim, and to explain why the Plan was reaching a different conclusion constituted a procedural violation of ERISA’s regulations.

Ultimately, the court concluded that Sedgwick had abused its discretion in determining that Ms. Chacko was not entitled to ongoing LTD benefits. In providing this opinion, the court highlights some of the many gray areas of ERISA law and demonstrates that many elements of ERISA contain nuance and must be considered in the proper context of an individual matter. Chacko serves as a reminder that ERISA is a complicated, nuanced area of the law. If you are involved in an ERISA matter, the best thing you can do is enlist knowledgeable, experienced ERISA attorneys to utilize the expertise necessary to navigate such matters. The attorneys at McKennon Law Group PC are without rival when it comes to understanding and litigating ERISA law.

Long-Term Care Insurers: Underpricing Policies and Denying Legitimate Claims (Part 1)