ERISA - Administrative Record Archives

The Basics of an ERISA Life, Health and Disability Insurance Claim – Part Twelve: The Standard of Review

In this several-part blog series titled The Basics of an ERISA Life, Health and Disability Insurance Claim, we discuss the basics of an ERISA life, health, accidental death and dismemberment and disability claim, from navigating a claim to handling a claim denial and through preparing a case for litigation. In Part Twelve of this series, we discuss the standard of review. The standard of review can greatly affect the outcome of any litigation for insurance benefits.

As we previously noted in this series, before suing an insurer over denial of benefits under a policy governed by ERISA, an insured must usually file an administrative appeal. In theory, this gives the insurer and insured a chance to “have a meaningful dialogue” regarding the disability, life, health, or accidental death and dismemberment claim over the benefits and gives the insurer another opportunity to make the correct decision. In reality, more often than not, insurers just use this time to create as compelling a case as possible to deny the claim for benefits and to set themselves up to win in litigation. If the claim is denied and the insured has pursued all mandatory appeals, the insured can sue the insurer. In the resulting ERISA litigation, the federal court will examine the insurer’s decision, records and reasoning to determine whether to affirm the denial.

The standard of review is a measure of how much discretion the insurer has to deny a claim. This applies during any litigation arising from the denial of an ERISA claim. If the claim for benefits is approved, then the standard of review is irrelevant.

Generally speaking, there are two standards of review: “abuse of discretion/arbitrary and capricious” and “de novo.” The terms “abuse of discretion” and “arbitrary and capricious” tend to be used interchangeably. Under the abuse-of-discretion standard, the court should overturn a ruling when it is “without reason, unsupported by substantial evidence or erroneous as a matter of law.” Miller v. Am. Airlines, Inc., 632 F.3d 837, 845 (3d Cir. 2011). Under the de novo standard of review, “the burden of proof is placed on the claimant” to establish entitlement to plan benefits. Muniz v. Amec Const. Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010). “When conducting a de novo review of the record, the court does not give deference to the claim administrator’s decision, but rather determines in the first instance if the claimant has adequately established that he or she [qualified for benefits] under the terms of the plan.” Id. at 1295-96. The trial court performs an “independent and thorough inspection” of the plan administrator’s decision in order to determine if the plan administrator correctly or incorrectly denied benefits. Silver v. Executive Car Leasing Long–Term Disability Plan, 466 F.3d 727, 733 (9th Cir. 2006). De novo review permits the trial court to “evaluate the persuasiveness of conflicting testimony and decide which is more likely true.” Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir.1999).

The easiest way to think of the standard of review is to think of a meter measuring how much an insured has convinced the court that he or she is entitled to benefits. Under de novo review, the insured need only establish 50.01% on the meter. Under the abuse-of-discretion standard, that number is much higher. With that standard, it helps to think of that number perhaps being 60% or even higher. An ERISA claimant/insured wants the de novo review standard to apply. Under the abuse-of-discretion standard, an insurer may be able to deny claims that, to a layman, are clearly meritorious. For example, a court may uphold an insurer’s decision where the insured’s treating physician stated that the claimant is disabled, but the insurer hired a doctor to conduct a “paper review” of the insured’s file without examining the insured and then denying the claim based on the resulting report. Because the hired paper reviewing doctor concluded that the person did not have a serious medical condition or did not have sufficiently disabling restrictions and limitations, the insurer’s resulting decision was not “without reason, unsupported by substantial evidence or erroneous as a matter of law.” Miller, 632 F.3d at 845. In short, the standard of review is critically important in most cases and may be outcome determinative.

The standard of review exists because insurance policies/ERISA plans have language that gives discretion to the claims administrator or employer in determining coverage and benefits issues. The standard of review is based on such a grant of discretion clause. If there is no such clause, then the default standard of review is de novo. Most ERISA plans in the United States include a discretionary clause if the applicable law permits the clause’s inclusion. Insurers and employers like these clauses because it makes their determinations more likely to be affirmed by the courts.

We all know that insurance companies generally seek profit over making claims decisions that result in paying claims and thus readily deny many valid claims merely to avoid paying benefits under the plan. Because of this, many states have banned clauses that grant discretion to insurance companies. These states want the courts to review the evidence and decide whether a person is entitled to the benefits without a presumption in favor of the insurer’s or employer’s claim decision. For example, such clauses are banned in California. California Insurance Code Section 10110.6 invalidates discretionary clauses for all life insurance and disability insurance plans. As a result, for a disability plan that insures an individual residing in California, an insurer’s decision will almost always be subjected to de novo review. Furthermore, some courts in California have interpreted Section 10110.6’s language as applying to medical insurance plans as well. See Ticconi v. Blue Shield of California Life & Health Ins. Co., 160 Cal.App.4th 528, 540, n.7 (2008); Mahlon D. v. Cigna Health and Life Ins. Co., 291 F.Supp.3d 1029, 1031-32 (N.D. Cal. 2018).

Even though ERISA is federal law, many of these state laws still apply to contracts governed by ERISA. In many circumstances, ERISA preempts state law. However, laws such as California’s Section 10110.6 are not preempted by ERISA because of ERISA’s “saving clause that saves from preemption ‘any law of any State which regulates insurance, banking, or securities.’” See, e.g., Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, Plan Number 625, 856 F.3d 686, 692-695 (9th Cir. 2017). Furthermore, this applies to all ERISA plans and insurance policies. See id. at 695. As such, in California, there is little dispute that, for a disability, life insurance or accidental death claim, the standard of review will be de novo. In many other states, there are similar laws that alter the standard of review for many types of policies.

Another temperance on the abuse-of-discretion standard lies in the fact that courts have ruled that discretionary clauses are disfavored as a matter of public policy. This means that an insurer must be careful about how the clause is worded. If the court concludes that the clause is less than clear or has any a defect that the court can locate, the clause will be deemed invalid, and the standard of review will be de novo.

Ultimately, the standard of review is a critical aspect of any ERISA lawsuit for pension or insurance benefits. Even when filing a mandatory administrative appeal, a claimant, or his or her attorneys, must always keep in mind how the standard of review will influence the court’s decision on a claimant’s entitlement to benefits. Such considerations are paramount in pursuing a claim.

Discovery in De Novo Review ERISA Cases: Court Grants Plaintiff’s Request for Bias Discovery Concerning Paper Reviewing Consultants

In ruling on an action to recover ERISA benefits, a court generally considers only the evidence contained in the administrative record. However, in certain circumstances, a plaintiff in an ERISA case may be able to introduce evidence outside of the administrative record either by way of discovery or a motion to augment the administrative record.The Ninth Circuit has established guidelines for when the admission of new evidence is appropriate. “[T]he district court should exercise its discretion to consider evidence outside of the administrative record ‘only when the circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.’” Opeta v. Nw. Airlines Pension Plan for Contract Emp., 484 F.3d 1211, 1217 (9th Cir. 2007) (emphasis in original).

Recently, in the matter of Kip Jones v. Life Insurance Company of North America, et al., 2020 WL 2126498 (D. Ariz.May 5, 2020), an Arizona District Judge granted the plaintiff’s request to conduct discovery related to the potential bias of the plan administrator’s medical experts that were utilized during the underlying claims review process. In Jones, the plaintiff filed a lawsuit against Life Insurance Company of North America (“LINA”) after it determined that he no longer met the policy’s definition of “disabled” and, as a result, terminated his life insurance waiver of premium benefit. LINA’s decision relied entirely on paper reviews from its reviewing experts. The plaintiff sought discovery into LINA’s relationships with the vendors that provided the reviewing experts and its history with the experts themselves.

In permitting the requested discovery, the Court recognized that the outcome of the case turned on the credibility of the experts and that “where an expert or the third-party vendor who supplies that expert has a long-standing relationship with or receives substantial compensation from a carrier or industry, and overwhelmingly renders opinions in their favor, such evidence might be important in accessing that expert’s bias and credibility.”

The Court also found that the plaintiff’s unchallenged representations about LINA’s relationship with its vendors and their experts raise a concern regarding the fairness of LINA’s claims handling and that this concern warranted discovery into LINA’s relationships with those vendors and the experts who rendered opinions upon which the decision to terminate plaintiff’s claim was based. In addition, the Court rejected LINA’s argument that the requested discovery was not proportional to the needs of the case because the plaintiff would neither win a large amount of money, nor vindicate vitally important personal or public values. The Court found that the life insurance waiver of premium benefit was a valuable benefit and that the plaintiff’s qualification for the benefit was an important issue at stake in the action.

Ultimately, the Court found that discovery into the potential bias of experts rendering opinions was relevant and met the high burden for discovery in an ERISA case. The Court explained:

LINA will be required to respond to discovery that delves into the number of times it retained and the amount of money it paid to third-party vendors in disability and LWOP claims and medical reviewers utilized here, LINA-generated performance evaluations of these vendors and medical reviewers, the number of times they concluded that a claimant could perform work, LINA-generated performance evaluations for LINA employee Mary Faltaous, and any guidelines and manuals used by LINA in evaluating this claim . . .. The Court finds that LINA has the resources to respond to the discovery requests and is the only party with access to the requested discovery. The Court further finds that the discovery ordered herein is relevant and proportional to the needs of the case and that the burden or expense of the discovery does not outweigh its likely benefit.
Id. at *5.

The plaintiff in Jones also sought to supplement the administrative record with a letter from his treating physician responding to LINA’s doctors’ record reviews. The plaintiff asserted that LINA had not provided him the opportunity to respond to the record reviews during the appeal process. LINA argued, among other things, that ERISA regulations do not contemplate the disclosure of reviewing doctors’ opinions prior to the appeal being decided. The Court rejected this argument and granted the plaintiff’s motion to supplement the administrative record. In granting the motion, the Court relied on Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666 (9th Cir. 2011), which found that failing to furnish medical reports violated ERISA by denying the claimant’s physicians the opportunity to submit written comments and perform additional examinations.

Although discovery in ERISA cases is generally limited, the Jones case establishes an important trend that, in certain circumstances, courts will permit discovery in de novo review cases to uncover insurance company bias. ERISA claimants seeking to conduct discovery into this issue can look to the Jones case as excellent support for allowing such discovery.

When Can a Disability Claimant Obtain Discovery in an ERISA Suit When the De Novo Review Standard Applies?

When it Goes to the Bias of an Insurer’s Consultants, that’s When a claimant who challenges a denial of disability or life insurance benefits by filing a court action under ERISA is generally not able to present evidence to the court that is not in the administrative record. The administrative record consists of all the medical records, documents and other information obtained by and submitted to the plan administrator during the initial stages of the claim and through the appeal process. Because courts are generally unwilling to consider any evidence which is not in the administrative record, plaintiffs are normally not entitled to legal discovery from the insurance company.

However, courts in the Ninth Circuit have carved out exceptions to the above discovery rule in de novo review cases. “[T]he district court should exercise its discretion to consider evidence outside of the administrative record ‘only when the circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.’” Opeta v. Nw. Airlines Pension Plan for Contract Emp., 484 F.3d 1211, 1217 (9^th Cir 2007) (emphasis added.).

In a recent decision by the U.S. District Court of Arizona, Coffou v. Life Insurance Company of North America, 2020 WL 1502104 (D. Arizona 2020), the court allowed discovery in an ERISA case relating to the plan administrator’s alleged use of biased experts when it denied a claim for waiver of premium benefits under a life insurance policy. In Coffou, the Plaintiff, Mary Coffou, filed a lawsuit against Life Insurance Company of North America (“LINA”) after it determined Ms. Coffou did not meet its definition of “disabled” and as a result, denied her a waiver of life insurance policy premiums. Ms. Coffou alleged that LINA intentionally denied her claim by hiring third-party vendors to supply a biased vocational expert and biased medical experts who had a history of providing findings to support LINA’s denial of claims.

While the court stated that compensating experts for work done is not in itself proof of bias, evidence such as a long-standing relationship or substantial compensation may be important to access an expert’s bias and credibility. In Coffou, the Court held as follows:

For several reasons, this case meets the exceptional circumstances test set out by Opeta. This is a case in which the carrier has an admitted structural conflict and a history of self-dealing, resulting in its claims practices being subject to an extensive national “market conduct study,” a 2013 Regulatory Settlement Agreement (“RSA”), and continued monitoring. In addition, Plaintiff’s claims would have been insurance contract claims prior to ERISA. Further, Plaintiff has pointed out that some of LINA’s experts, Drs. Grattan and Mobo, rendered opinions outside their area of expertise. And, Plaintiff has indicated that LINA provided its vocational consultant, Glenna Taylor, with the reports and limitations by its own experts, Drs. Mobo and Grattan, but did not provide all the medical records and report that Plaintiff used to support her claim. Also, LINA did not provide the SSA ALJ’s decision, the SSA claims file, or Plaintiff’s medical, vocational, and lay witness evidence.

LINA’s conduct puts this case outside the garden-variety “structural conflict of interest” scenario. Rather, LINA’s history and the unchallenged representations of Plaintiff that LINA provided its experts with its other experts’ reports, but not the entire record, raises concerns whether LINA’s structural incentive to minimize benefit payments distorts its obligation to fairly handle benefits claims. This warrants discovery into LINA’s relationships with its vendors and experts and into whether it was employing vendors and experts who would reliably do LINA’s bidding.

The Court concluded that discovery beyond the administrative record would be helpful to determine the credibility of LINA’s experts. LINA was ordered to respond to interrogatories relating to its relationship history with the subject third-party vendors and experts used to determine Ms. Coffou’s claim. Specially, LINA was required to respond to discovery that delved into the number of times it retained the subject third-party vendors and experts and what amount of money was paid to them, as well as the number of times its internal vocational expert has conducted assessments and concluded the claimant could perform work.

As Coffou demonstrates, while discovery in ERISA de novo review cases is limited, under the right circumstances the courts will allow discovery that will expose insurance company bias in the denial of ERISA life and disability insurance claims to protect insureds from having their claims improperly denied.

Exhaustion of Remedies and the Failure to Raise an Argument on an ERISA Appeal: What Happens if an ERISA Claimant Misses a Key Factual or Legal Argument on Appeal?

Under insurance policies governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), when an insurer denies a person’s claim for life insurance benefits, short-term-disability benefits or long-term-disability benefits, the beneficiary must request that the insurance company review the denial or termination if they intend to sue the insurer to obtain their benefits. Courts refer to this review as an “administrative appeal” and the obligation to pursue that appeal as the duty to exhaust administrative remedies. Courts have universally concluded that they “have the authority to enforce the exhaustion requirement in suits under ERISA, and that as a matter of sound policy they should usually do so.” Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980). The administrative appeals process is very important. Not only must a beneficiary pursue their administrative remedies in order to obtain the right to sue in court, but a beneficiary’s actions during the administrative appeals process can have serious ramifications for any resulting litigation.

When a beneficiary appeals an insurer’s initial decision, the documents submitted to the insurer become the “administrative record.” If an insured fails to submit a piece of evidence to the insurer, a Court may refuse to consider the evidence in any subsequent litigation. During litigation, a court usually only examines the administrative record. See, e.g., Blaj v. Unum Life Ins. Co. of Am., 2014 WL 2735182, at *2 (N.D. Cal. June 16, 2014) (citing Opeta v. Northwest Airlines Pension Plan, 484 F.3d 1211, 1217 (9th Cir. 2007), and stating that “a district court should determine whether the plaintiff is entitled to benefits based on the evidence in the administrative record, and evidence outside the administrative record may only be considered in ‘certain limited circumstances’”). Given the importance of building a strong administrative record, beneficiaries potentially imperil their claim by performing their own appeal. However, assuming an insured sends the insurer all relevant records, then a skilled attorney will likely possess most of the tools required to build their argument and win a case in court.

Given that a court rarely examines evidence outside the administrative record, a second question naturally arises: Can a beneficiary present arguments to a judge that they did not raise when pursuing their administrative appeal? The idea that a beneficiary cannot present an argument for the first-time during litigation is referred to as “issue exhaustion.” Thankfully, courts nearly universally reject insurance companies’ attempts to invoke this doctrine.

In Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 630 (9th Cir. 2008), the Ninth Circuit rejected an insurer’s attempt to dismiss a claim because of an alleged failure to satisfy this doctrine. The Ninth Circuit explained that the Supreme Court has instructed lower courts that “issue exhaustion is typically a creature of statute or agency regulation.” Id. The Ninth Circuit subsequently reasoned that because, “No ERISA statute precludes courts from hearing objections not previously raised to the Plan, nor does any ERISA statute or regulation require claimants to identify all issues they wish to have considered on appeal,” ERISA does not require issue exhaustion. Id.

In Wolf v. National Shopmen Pension Fund, 728 F.2d 182, 186 (3d Cir. 1984), the Third Circuit reached the same conclusion. ERISA does not compel courts to enforce the doctrine of issue exhaustion. The Third Circuit explained that it had found no caselaw supporting the doctrine:

Section 502(a) of ERISA does not require either issue or theory exhaustion; it requires only claim exhaustion. 29 U.S.C. § 1132(a). The Pension Fund cites no case, nor are we aware of any case which holds that a district court cannot decide a claim relying on a theory different from that presented to the Trustees of a Pension Fund. All of the cases with which we are familiar concern themselves only with whether the internal union remedies have been exhausted before finding federal jurisdiction appropriate.

Id. (emphasis in original).

These rulings declining to impose an issue exhaustion requirement protect ERISA plan participants and their beneficiaries. McKennon Law Group PC receives many calls from people who conducted their own appeals after an insured denied their benefits. If, in fact, issue exhaustion applied, then we likely could not help these people. A lay person does not know what the law requires of an insurer or what to argue on appeal. Many appeal letters drafted by attorneys, such as those at this firm, contain pages of legal argument and citations to cases supporting the claim. If issue exhaustion applied, a beneficiary would be required to seek legal counsel during the appeals process. One honest misstep would result in the claim being unsalvageable.

Of note, the Ninth Circuit did state that an insurer could, in theory, include an issue exhaustion requirement in a policy. See Vaught, 546 F.3d at 629-33. An insurance policy is just a specialized form of contract. The plain language of the contract dictates the relationship between the parties. However, the Ninth Circuit concluded that language stating that a beneficiary must “clearly explain . . . the reason why you think the Claims Administrator should reconsider your claim” lacked sufficient specificity so as to impose a contractual issue exhaustion requirement. Id. at 629, 632. The Vaught court’s opinion also implies that any such contractual requirement would need to be very explicit. See id.

That courts do protect ERISA plan participants and their beneficiaries in this instance does not mean that it is wise to handle appeals on their own. There are many pitfalls and landmines to avoid and hiring experienced ERISA appeals attorneys like McKennon Law Group PC may make the difference between getting your long-term disability claim paid or not.

Ten Things to Consider and Look For in Your ERISA Life and/or Accidental Death and Dismemberment (AD&D) Insurance Plans When You Select Benefits or File a Claim

1. Obtain a full copy of your plan. The full plan will not typically be a benefit summary or a print-out from a website. It will be fairly long and many definitions and it will recite your ERISA plan terms, policies and procedures for filing a life insurance or AD&D claim and handling the claim, claim denials, appeals of claim denials, etc. The claims administrator will likely not have a copy of the full plan. You can request a copy of the full plan from your Employer’s Human Resources department or often from the claims administrator (the insurer or third-party administrator).

2. Read the plan. Your plan document controls the rights and obligations of the parties, including all plan participants and beneficiaries. Thus, if you have an ERISA claim for life insurance benefits or AD&D benefits, you should read the plan carefully. A human resources representative, a customer service representative for the insurance company that administers your life and/or AD&D benefits, or your claims administrator may tell you what your benefits are over the telephone or in an e-mail. You cannot necessarily rely on what a representative tells you over the phone. The plan document controls the benefits available, not what someone tells you over the telephone or via e-mail. If there is any confusion, ask the representative to tell you what specific plan provision they are referencing and ask them to send you a letter documenting what they are telling you.

3. Read the definitions, provisions, and exclusions. Be aware that life and AD&D insurance policies may exclude certain types of losses, such as suicide within the first two years of life insurance coverage. Pre-existing conditions or sicknesses may exclude an insured’s death or dismemberment from coverage under an AD&D policy as well. “Dismemberment” is often defined by an AD&D policy provision. Terms like “pre-existing condition,” “sickness,” “intoxication,” and other words may have special definitions under your policy. Under an AD&D policy, you will have to prove that the claimed loss resulted from an accident or accidental bodily injury. This can be complicated, especially where the accidental bodily injury may have been caused in part by a preexisting medical condition. If this is the case, you will need to consult an attorney immediately as there are complex and technical rules that are only found in applicable case law. McKennon Law Group PC is highly experienced in this area. Make sure you know what is required under your plan’s specific definitions in order to successfully claim life and/or AD&D benefits.

4. Select the appropriate coverage amount. Some employers will provide you with a base amount of life or accidental death and dismemberment (AD&D) insurance coverage, and some may not. Be sure to select the level of coverage that you want, and make sure you fill out any forms, like a Statement of Health, to ensure that you receive the coverage you select. You may also be able to select a level of life or AD&D insurance coverage for your spouse as well. Read the plan and policy documents carefully; your policy may state that, if selected, your spouse coverage will only be a percentage of your coverage, but your policy may also provide for spouse coverage in an amount independent of your coverage.

5. Confirm your coverage. Get a confirmation of coverage in writing, either a print-out of the premiums that you are paying for each insurance coverage you have chosen through your employer or a certificate that states the exact coverage you receive. Make sure you always have a current document showing your benefits coverage, which will usually be once a year after coverage selection or two to four months after you begin new employment. Review your premiums statements to ensure that you are paying the correct amounts for the coverages that you selected. Put all communications with your employer or insurer in writing and insist on the same in return.

6. Understand the conversion period to individual coverage. Many insurance companies permit you to continue your life and AD&D insurance coverage with them if you leave your employer. Usually, you need to contact the insurance company for your life and AD&D benefits within 30 days of your last day of work to convert your policy. Read through your plan documents and policy to understand the time period you must convert your group policy to an individual one and to know who you need to call or write to in order to continue your insurance coverage through an individual policy. If you decide to convert your policy, keep detailed records on when you called or wrote to the insurance company, what number you called, and who you spoke to regarding conversion of your policy or policies. You may be limited to a 30- or 31-day period, so make sure you follow up every couple of days until you receive confirmation that your policy has been converted. However, by law, if the insurance company does not convert your policy in a timely manner despite your requests to do so, you may be able to extend the time period in which you may convert your policy. You should contact an attorney for advice if you encounter this problem.

7. Time to appeal a claims decision. Read the appeals or grievance section to determine your appeal rights and deadlines. The first appeal must be submitted within 60 days of the date you receive the initial denial, pursuant to ERISA’s regulations. However, there may be a second appeal, which may be mandatory or voluntary. Whether there is a second appeal and whether it is mandatory or voluntary is critical to pursuing your life and/or AD&D benefits claim in court if it is denied. Additionally, although ERISA requires that you have 60 days to file your first appeal, the insurance company may dictate that a second appeal be filed in shorter amount of time. Be aware that you can and should contact an attorney as soon as you receive any notice, oral or written, from your insurance company that your claim will be or has been denied. An attorney can help you with your first and second appeals of the denial of your life and/or AD&D benefits, which will also help if you need to go to court to force the insurance company to pay you your benefits because the attorney will ensure that your life and/or AD&D claim record during the administrative appeals is complete and will help a judge understand that the insured’s death or dismemberment qualifies for payment of benefits.

8. Obtain a full copy of the claim file or administrative record. If your claim for benefits has been denied once, make sure you obtain a full copy of the claim file and/or Administrative Record so you can see what the insurance company considered in denying your claim. You can request a copy of the administrative record from the claims administrator, which is often an insurance company such as MetLife, Unum, and Liberty Mutual. If your claim for benefits has been denied after one (or two) appeals, make sure you obtain another copy of the claim file, which is also called the “administrative record” in insurance litigation, because it will contain updated records of what the insurance company considered in denying your appeal(s).

9. Find the statute of limitations and contractual limitations period as stated in your plan. The statute of limitations and contractual limitations period will be the period of time by which you must file a lawsuit to obtain disputed benefits. To file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two). The contractual limitations period may appear in a section titled, “Legal Action.”

10. Find out who the plan administrator is and seek necessary information from it. Look for a name and address of the plan administrator in the plan. If your claim has been denied, send a written request to the plan administrator for all plan documents. The plan administrator is required to provide the plan documents to you within 30 days. 29 U.S.C. § 1024. Federal regulations allow you to file a lawsuit to seek penalties from the plan administrator in the amount of $110 per day for each day the plan documents are not provided beyond the 30-day period. 20 U.S.C. § 1132(c)(3); 29 C.F.R. § 2575.502c-1.

If your ERISA claim has been denied, knowing when to sue may be integral to the success of your claim. It is important to have experienced and highly qualified disability, health, life and accidental death or dismemberment insurance attorneys, like those at the McKennon Law Group PC. Fill out our free consultation form today to set a time to discuss your claim with one of our attorneys, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA insurance claims.

Ten Things to Consider and Look For in Your ERISA Short-Term and Long-Term Disability Plans When Selecting Benefits or You Want to File a Claim

1. Obtain a full copy of your plan and administrative record. The full plan will not typically be a benefit summary or a print-out from a website. It will be fairly long and many definitions and it will recite your ERISA plan terms, policies and procedures for filing a claim and handling the claim, claim denials, appeals of claim denials, etc. The claims administrator will likely not have a copy of the full plan. You can request a copy of the full plan from your Employer’s Human Resources department or often from the claims administrator (the insurer or third-party administrator). You can request a copy of the administrative record from the claims administrator, which is often an insurance company such as MetLife, Unum, and Liberty Mutual.

2. Read the Plan. Your Plan document controls the rights and obligations of the parties, including all plan participants and beneficiaries. Thus, if you have an ERISA claim for Short-Term and Long-Term Disability benefits, you should read the plan carefully. A human resources representative, a customer service representative for the insurance company that administers your disability benefits, or your claims administrator may tell you what your benefits are over the telephone or in an e-mail. You cannot rely on what a representative tells you over the phone. The Plan document controls the benefits available, not what someone tells you over the telephone or via e-mail. If there is any confusion, ask the representative to tell you what specific Plan provision they are referencing and ask them to send you a letter documenting what they are telling you.

3. Understand the difference and transition between Short-Term Disability (STD) and Long-Term Disability (LTD). Be aware that getting STD insurance does not automatically mean that you have LTD insurance. If you want to ensure financial stability if you suffer a long-term disability in the future, you will want to ensure that you select the appropriate amount of LTD coverage because STD benefits will only last you about three to six months. LTD coverage will often last until your 65th birthday. Additionally, some plans provide for an automatic transition between STD and LTD benefits, but others have a gap of time between STD and LTD benefits or require two, separate applications for the STD and then the LTD benefits.

4. Select the appropriate coverage amount. Employers often provide an automatic base STD amount and allow you to opt into higher coverage for STD. LTD insurance coverage is often optional and offers several coverage levels for the amount of benefits you would like to receive if you become disabled. Be sure to select the coverage that you want, and make sure you fill out any forms, like a Statement of Health, to ensure that you receive the coverage you select.

6. Time to appeal a claims decision. Read the appeals or grievance section to determine your appeal rights and deadlines. The first appeal must be submitted within 180 days of the date you receive the initial denial, pursuant to ERISA. However, there may be a second appeal, which is sometimes mandatory and sometimes voluntary. Whether there is a second appeal and whether it is mandatory or voluntary is critical to pursuing your disability claim in court if it is denied. Additionally, although ERISA requires that you have 180 days to file your first appeal, you may have only 30 or 60 days to file your second appeal. Be aware that you can and should contact an attorney as soon as you receive any notice, oral or written, from your insurance company that your claim will be or has been denied. An attorney can help you with your first and second appeals of the denial of your STD and/or LTD benefits, which will also help if you need to go to court to force the insurance company to pay you your benefits because the attorney will ensure that your disability claim record during the administrative appeals is complete and will help a judge understand that you are disabled.

7. Read the definitions. Terms like “disability,” “your occupation,” “physician’s care,” and other words may have special definitions under your policy. Make sure you know what is required under your plan’s specific definitions in order to successfully claim disability benefits. You should also look for the “Elimination Period” in your STD and LTD plans. The Elimination Period is the time period you are unable to receive benefits under that plan, a type of “waiting period.” For STD benefits, it is often no more than a week. For LTD benefits, it is often the duration for which STD benefits are paid, so the LTD Elimination Period generally lasts approximately three to six months from the date of your disability.

8. Statute of Limitations and Contractual Limitations Period. These will be the period of time by which you must file a lawsuit to obtain disputed benefits. To file a lawsuit for benefits pursuant to an ERISA plan, you must first submit appeals (at least one, but no more than two). The contractual limitations period may appear in a section titled, “Legal Action.”

9. Who is the Plan Administrator? Look for a name and address of the Plan Administrator in the Plan. If your claim has been denied, send a written request to the Plan Administrator for all plan documents. The Plan Administrator is required to provide the plan documents to you within 30 days. 29 U.S.C. § 1024. Federal regulations allow you to file a lawsuit to seek penalties from the Plan Administrator in the amount of $110 per day for each day the plan documents are not provided beyond the 30-day period. 20 U.S.C. § 1132(c)(3); 29 C.F.R. § 2575.502c-1.

10. Calculate your STD and LTD weekly or monthly benefits. STD and LTD benefits may be paid as a percentage (e.g., 50%, 60%, 70%) or multiplier amount (e.g., 1x, 2x, 3x) of your regular earnings. Your STD and LTD benefits amount may be different depending on what level of coverage you chose in your most recent benefits selection. For example, you may receive only 50% of your base earnings in STD benefits but 65% of your base earnings as LTD benefits. Additionally, almost all STD and LTD policies will “offset” your benefits with any other disability-related income you may receive, including SSDI, SSI, and state disability insurance income. If you apply for LTD benefits, many policies will require that you apply for SSDI, which is disability insurance offered by the federal government. If and when you are approved for SSDI, that amount will be subtracted from your future benefits payments of your LTD benefits.

If your ERISA claim has been denied, knowing when to sue may be integral to the success of your claim. It is important to have experienced and highly qualified disability, health and life insurance attorneys, like those at the McKennon Law Group PC. Fill out our free consultation form today to set a time to discuss your claim with one of our attorneys, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA insurance claims.

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