Disability Insurance Archives - Page 3 of 41

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.

Does ERISA Apply To Your Employee Benefits?

ERISA is a federal law designed to protect benefits due to employees administered by private employers through group benefit plans. Employees often are covered by long-term disability, short-term disability, life insurance, health insurance, retirement plans, and other employee benefits that have been issued through their employers. ERISA sets forth standards for administering employee benefits. Where benefits are not properly administered, ERISA provides plan participants and their beneficiaries a process through which to appeal an insurer’s or plan administrator’s claim denial or other improper action, and to sue in federal court when an appeal is unsuccessful. For persons whose insurance benefits are not governed by ERISA, the process governing claims handling and appeals by the insurer or plan administrator vary greatly from state to state. So do the potential damages available to insureds whose benefits are improperly denied. Therefore, the issue of whether your insurance coverage/employee benefits is governed by ERISA can be very significant.

If you are enrolled in a pension plan provided by your private employer, that plan is governed by ERISA. ERISA also applies to other types of employee benefit plans issued by private employers, including:

Disability insurance plans
Life insurance plans
Accidental Death & Dismemberment insurance plans
Health and dental insurance plans
Vision plans
Severance contracts

When Does ERISA Not Apply to Your Employee Benefits

There are four main exceptions to ERISA. ERISA does not apply to plans offered by government employers and entities, unfunded excess benefit plans, plans maintained outside the United States, and plans established by religious organizations that do not irrevocably opt into ERISA. Whether these exceptions to ERISA apply to your plan can depend on several factors and may require someone with ERISA expertise to determine. Reach out to the ERISA experts at McKennon Law Group PC for a free consultation with experienced attorney for disability coverage in San Diego if you have a question about ERISA’s applicability to a claim denial.

When ERISA Does Not Apply – Government Employers And Entities

ERISA was initially enacted to prevent the systematic abuse of private employees’ pensions and other employee benefits. However, it was decided that state and local governments should be the ones to decide the most effective ways of protecting their employees and their benefits. Thus, benefit plans created by state or local governments or plans under a collective bargaining agreement between a union and a governmental entity are not covered by ERISA.

When ERISA Does not Apply – Plans Maintained Outside Of The United States

Plans that are maintained outside of the United States for the main benefit of non-residents of the U.S. are not covered by ERISA. This is because ERISA was created to apply exclusively to American employees. Because ERISA is governed by the Department of Labor, it can only apply to things or people that the Department of Labor has power over, which does not include persons residing outside the U.S.

When ERISA Does not Apply – the Church Exception and Other Exceptions

If you have an employee benefit plan that was established by your church, temple, mosque, or other religious establishment, it is not governed by ERISA unless the organization irrevocably opts into ERISA. Additionally, plans maintained for the sole purpose of complying with state disability, unemployment, or workers’ compensation laws are not subject to ERISA. Aside from these primary exceptions, there are also voluntary group insurance plans that are not subject to ERISA if the employer does not contribute to the plan. As noted above, religious organizations also have a right to opt into ERISA and some do. If you do not know whether your plan is governed by ERISA, an experienced ERISA attorney can help you. Contact the knowledgeable ERISA attorneys at the McKennon Law Group PC for a free consultation.

How An Experienced ERISA Insurance Attorney Can Help You

If you have questions about whether ERISA applies to you, McKennon Law Group PC offers free consultations. McKennon Law Group PC has a dedicated team of local attorneys specializing in San Diego disability insurance who will fight for your benefits.

Is an ERISA Insurer or Other Fiduciary Liable When They Incorrectly Calculate and Misrepresent the Amount of Your Plan Benefits?

Most employee benefits are governed by a federal law called the Employee Retirement Income Security Act of 1974 (“ERISA”), including disability insurance, life insurance, accidental death insurance, health insurance, pensions, and other benefits offered by employers to their employees through their employee benefit plans. Sometimes the plan’s administrator or an insurance company (if the plan’s benefits are funded by an insurance policy), miscalculates the employee’s monthly benefit and misrepresents to him the amount due, which in turn can lead to dire financial results if the employee relies to his detriment on the insurer’s misrepresentation. Is an ERISA insurer liable to an employee for such wrong calculations and misrepresentations?

That is a complicated question under ERISA fiduciary duty law. Until the very recent decision from the Ninth Circuit Court of Appeals in Irina Morris v. Aetna Life Insurance Company, No. 21-56169, 2023 WL 3773656 (9th Cir. Jun. 2, 2023), the answer was unclear. The courts had found that when an administrator made a mistake in calculating plan benefits while following the procedures set by another entity, it engaged in a “ministerial” function, not a fiduciary one, because no discretion or judgment was required. So held the Ninth Circuit of Appeals in Bafford v. Northrup Grumman Corp., 994 F.3d 1020 (9th Cir. 2021). But, going forward, the answer is a resounding yes, insurers, plan administrators and their third-party administrators who make “calculation” errors are performing a fiduciary function when those calculation errors are accompanied by other actions, thanks to the Morris decision.

In that case, the McKennon Law Group PC obtained a favorable decision for one of its ERISA plan long-term disability clients. The Ninth Circuit clarified and drastically expanded the scope of an ERISA insurer’s fiduciary duty liability for miscalculating and misrepresenting plan benefits. That is a fair result because ERISA insurers and administrators are fiduciaries of plan participants and their beneficiaries. As fiduciaries, they have a duty to act solely in the interest of the plan’s participants and beneficiaries for the exclusive purpose of providing them their benefits, and with care, skill, prudence, and diligence. See 29 U.S.C. § 1104(a)(1). With these very high duties of loyalty and prudence, why would a court allow an insurer to cavalierly misinform a plan participant about his benefit amount to his financial detriment with no consequence.

Morris is significant because it changed the landscape of ERISA fiduciary duty law on these types of issues in a favorable way for ERISA plan participants. To that end, the Morris Ninth Circuit Court of Appeals limited its landmark Bafford decision. Let’s step back for a moment. In Bafford, the Court held that a third-party administrator that incorrectly calculated a pension plan benefit amount within the framework of a policy and procedure set by another entity did not have to exercise any discretion, and so its error did not constitute a fiduciary function but was just a ministerial calculation error that could not be a fiduciary duty breach. The TPA selected the wrong salary data which caused it to overstate the employee’s monthly pension. ERISA insurers and administrators had successfully relied on Bafford to avoid liability for breach of fiduciary duties (when they miscalculated a plan participant’s benefits), on the ground that they did not exercise any discretion or judgment, the prerequisite of a fiduciary function. That is still the law in that very specific factual circumstance, i.e., when the person that mistakenly miscalculated the benefits did not exercise any discretion and acted within the framework of procedures set by someone else. However, Morris drastically expanded the scope of fiduciary duty liability for ERISA plan insurers and administrators when they commit a wrong subsequent to such a ministerial benefit calculation error. And Morris even implied that some benefit miscalculations similar to the mistake in Bafford are not ministerial but fiduciary.

In the wake of Bafford, the Ninth Circuit’s Morris decision swung the pendulum back toward plan participants. The case expanded what constitutes a fiduciary function. The Morris case clarified that, in relation to even a ministerial benefit calculation error, an ERISA insurer still can perform fiduciary functions in many respects. A plan participant can recover damages when an insurer or administrator incorrectly calculates her plan benefits if the insurer exercises discretion in other misconduct related to such a non-fiduciary benefit calculation error that harms the plan participant.

In Morris, the group insurer, Aetna, of the employer’s long-term disability plan negligently miscalculated the employee plaintiff Morris’ monthly LTD benefit, overstating it by hundreds of dollars per month. In collecting data to calculate Morris’ benefit, Aetna made a mistake about the amount of Morris’ salary, that she was paid 26 times per year when she was really paid 24 times per year. Since her monthly LTD benefit was a percentage of her pre-disability salary, Aetna’s mistake caused it to overstate her benefit. Aetna paid Morris the wrong monthly benefit amount, and misrepresented the amount to her and her lenders, for nine years. Aetna did not verify that its initial calculation was correct for almost a decade, even in response to Morris’ several phone calls and letters to Aetna’s benefit counselors asking the amount of her benefit because she wanted to apply for a mortgage and later refinance based on her disability income.

In a key part of the opinion, the Morris Court rejected the insurer Aetna’s contention that Bafford controlled because Aetna performed a ministerial benefit calculation error and, therefore, could not have performed a fiduciary function. Morris found, “But this misreads Bafford’s holding.” It held that, “Even assuming Aetna’s initial mathematical calculation is not discretionary, its subsequent actions – which were central to Morris’ injury – were” discretionary. Thus, the appellate court reversed the district court, which had held that all of Aetna’s subsequent misconduct and misrepresentations were inextricably entwined with its initial ministerial benefit calculation error and, therefore, were not fiduciary functions under Bafford.

The Morris Ninth Circuit Court found that Aetna performed fiduciary functions in several respects after its calculation error (even if Aetna’s initial long-term disability plan benefit calculation error was not a fiduciary act under Bafford because it did not exercise discretion). Specifically, Morris found the following conduct by Aetna were fiduciary functions that involved discretion (and thus subjected Aetna to liability to its insured Morris for breach of fiduciary duty):

After Aetna miscalculated Morris’ monthly LTD plan benefit amount, Aetna provided Morris with “individualized consultations with benefit counselors” about the incorrect amount of her monthly plan benefit.
In contrast to Bafford’s use of an online mechanism to calculate benefits and mail auto-generated statements to the plan participants: (1) Aetna’s employee ability specialists, team leaders, and customer service representatives consulted with Morris by phone about her benefit amount numerous times; (2) Aetna’s Long Term Disability Benefit Manager sent letters Aetna knew Morris would share with lenders as proof of her benefits; and (3) Aetna communicated with Morris’ financial institutions to verify her benefit amount.
Morris cited Bafford and other cases that, “‘[C]onveying information about the likely future of plan benefits’ through benefit counselors amounts to a fiduciary act.”
Aetna communicated with Morris and her lenders, and represented to them, the incorrect monthly benefit amount, which was a fiduciary function, unlike Bafford, because of the extent of Aetna’s involvement in her financial life.
After Morris phoned Aetna and asked whether Aetna made a benefit calculation error, Aetna did not verify the accuracy of its benefit calculations. Instead, Aetna repeatedly affirmed the erroneous benefit amount directly to Morris and her lenders for almost a decade, which higher income misrepresentations allowed Morris to take out a mortgage, refinance, enter a divorce settlement, and pay taxes on the basis that she was entitled to a higher income, to her financial detriment.
Aetna exercised discretion when it decided to aggressively collect its $56,000 overpayment of disability benefits back from Morris, even suspending her monthly benefit to recoup the money, which put her in dire financial straits, despite its knowledge that Morris had relied on Aetna’s incorrect statements about her monthly benefit amount to make important financial decisions.

In addition, the Morris Court held that Aetna exercised discretion and thus performed a fiduciary function when it gathered Morris’ salary information and interpreted the Plan’s terms to determine which benefits and deductions or offsets applied in order to determine Morris’ monthly benefit amount, which was different than the ministerial calculations in Bafford where a third-party administrator calculated benefits within the framework of a preset online formula set by another entity and did not have to exercise discretion. Though the Court did not explicitly say so, this implies that Aetna’s benefit calculation error was fiduciary in nature, not ministerial. The Morris Court also reiterated established Ninth Circuit ERISA fiduciary duty law that: (1) The “alleged wrong must occur in connection with the performance of a fiduciary function to be cognizable as a breach of fiduciary duty;” and (2) “Thus, the ‘threshold question’ in cases involving fiduciary breach is whether the fiduciary ‘was performing a fiduciary function[] when taking the action subject to complaint.’ ”

Key Take Away
The Ninth Circuit Morris Court expanded ERISA plan participant’s rights, as well as insurer’s fiduciary duties, particularly in the context of benefit calculation errors, benefit amount misrepresentations, and other related conduct. ERISA fiduciary duty law is quite complex. Whether an insurer performed a fiduciary function in a specific case requires careful analysis by an expert.
You should hire an experienced ERISA lawyer to represent you if your claim for disability, life, accidental death, health, or pension benefits is denied, or if your insurer or plan administrator miscalculates and misrepresents to you the amount of your plan benefits to your financial detriment. You can call (949) 387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling both ERISA insurance claims and non-ERISA California insurance bad faith claims.

Many people today find themselves in a situation in which at any given time, one incident can cause financial catastrophe. A medical diagnosis, accident, injury, or some other event can quickly cause a person to be unable to work, even permanently. Between the age of 20 and retirement, one in four people will be out of work for at least a year due to a disability, according to the Council for Disability Awareness. In the next year alone, five percent of working Americans will become unable to work for up to six months due to illness, injury, or pregnancy, most of which are not work-related. The leading causes of disability are pregnancy, musculoskeletal disorders, mental health issues and injuries such as fractures, sprains, and strains. However, people become unexpectedly disabled from countless causes. You simply never know when your life will be impacted by disability.

Short-term disability and long-term disability coverage can provide valuable protection for both employees and employers. A disabled employee with short-term and/or long-term disability insurance can focus on recovering from an injury or illness, or adjusting to living with a new condition, whereas one without short-term or long-term disability coverage may very well face financial ruin, which can also be catastrophic for anyone who is financially dependent on the employee. Having short-term and long-term disability insurance can easily mean the difference between a period of inconvenience and one’s life being completely upended.

For employers, providing short-term and long-term disability insurance coverage can allow employees to perform their work without the unnecessary stress that comes along with not having a financial plan in case of a disability arising. Employers who provide disability coverage will naturally attract higher quality candidates, so it stands to reason that those employers will enjoy better production than those who do not provide such coverage.

May is Disability Insurance Awareness Month, so there is no better time for employees to assess their coverage, and if they are not protected by short-term or long-term disability insurance, to consider obtaining such insurance. For those who already have short-term and long-term disability insurance, it is a perfect time to become more knowledgeable about disability insurance, such as how it works, what it covers, what the claims process entails, and how they can be protect themselves into the future. If you have any questions about short-term or long-term disability insurance, reach out to our trusted counsel for disability insurance matters in San Diego for a free consultation.

Disability Insurance Awareness Month is also an optimal opportunity for employers to reflect on the coverage their plan provides to employees. There are many different group plans, addressing various needs and providing different benefits. Employers can consider whether their group plan is meeting their employees’ and the company’s needs, and can educate themselves on types of plans, which may allow them to better meet the employees’ and company’s needs. If you are an employer with questions about the various plans available, contact a group insurance provider now to be sure that you have the group insurance plan that is the best fit for your company and its employees.

Whether you are an employer or an employee, short-term and long-term disability coverage can be a significant factor for you. This May, take some time to further educate yourself about disability insurance. You do not need to face issues related to disability matters alone. The experienced disability insurance attorneys at McKennon Law Group PC are available to assist you, if you have a few basic questions about short-term or long-term disability insurance or you have made a claim that was denied by an insurer and you are ready to appeal the denial or bring a lawsuit to recover your disability benefits. The lawyers at McKennon Law Group PC have the expertise to assist you.

Compassionate Allowances Can Help Speed Up Social Security Disability Payments

Becoming disabled due to an injury or medical condition can be devastating. The thought of facing the future can be daunting, especially thinking about how you might manage financially. If you are unable to work, you likely have concerns about how you can cover your expenses.

If you are unable to work due to a disability, you will likely look to long-term disability insurance benefits or Social Security Disability Income (SSDI) benefits to help you survive financially. Disability benefits can be a vital lifeline for those who are unable to work.

However, getting SSDI or long-term disability benefits can be an extremely slow process. It can take several months or even years to get your claim for benefits approved. Many are simply not able to afford to wait so long to begin receiving benefits. .

You may be surprised to learn that once you submit a long-term disability claim with a private insurance company, such as through coverage you obtained as part of a group plan offered by your employer, it can take much longer for the claim to be approved and for you to begin receiving disability benefits than being approved for and receiving SSDI benefits. And, if you are able to get your SSDI benefits approved prior to your long-term disability benefits, a favorable decision can assist you in recovering long-term disability benefits. This is because under the law, insurance companies may be required to consider a favorable SSDI benefit award and may be required to give significant weight to such an award when making their own decisions.

The Social Security Administration understands how difficult it can be for people to wait so long for benefits and has therefore implemented Compassionate Allowances to help reduce the wait time for people who meet certain conditions. However, when it comes to private insurance companies, you may be at the mercy of the insurer’s timeline for reviewing your claim.

Find out more about Compassionate Allowances below and learn how the McKennon Law Group PC can help fight insurance companies for long-term disability benefits due to you.

Why Does it Take So Long to Get Approved for Disability Benefits?

Before the Social Security Administration will approve your claim for SSDI benefits, you must qualify for the program. During this process, the Social Security Administration looks at medical records and other documents to understand whether you are disabled from working and to what extent you maybe able to work.

To apply for SSDI benefits, you must complete lengthy paperwork related to your disabling condition and your daily life. You may also have to provide copies of medical records demonstrating that you have a disabling condition. The Social Security Administration may also request records from your medical providers, including hospitals, doctors’ offices, and physical therapy clinics.

This can be a slow process, especially given that the Social Security Administration is a large government agency. How quickly you provide the relevant information and documentation will impact how long it takes for the Social Security Administration to approve or deny your claim.

If the Social Security Administration denies your claim for SSDI benefits, you have options for appealing the decision. However, the appeals process itself can take several months or years, which will delay you receiving SSDI benefits by even longer.

Long-term disability claims with private insurance companies also may take a long time to be decided. The insurance company will need to obtain and review your medical records. If your claim is denied, the insurance company will likely have a process by which you can appeal the denial, which also can take a substantial amount of time. If your disability claim is governed by a federal law called ERISA, then the insurer is required to allow you to appeal any long-term disability claim denial.

The Relationship Between Social Security Disability Income Benefits and Disability Benefits From Private Insurers

There is a relationship between SSDI benefits and long-term disability benefits paid by private insurance companies. Your private disability policy obtained through your employer will almost certainly contain provisions allowing the insurer to “offset” income you receive from other sources of income against your disability benefits. The most common offset is one for SSDI benefits. The concept is that you may be entitled to receive a given monthly benefit amount, but you should not be able to earn more being disabled than you were when you were working.

Because of these provisions allowing insurers to offset other income against your disability benefits, disability policies commonly contain provisions requiring the covered person to seek SSDI benefits. These provisions often require that you apply for SSDI benefits, and sometimes require you to exhaust any available appeals. Many insurers will pay for legal counsel to handle your SSDI claim for you.

More importantly for you, a favorable determination on your SSDI claim will likely make it easier for you to qualify for long-term disability benefits with your employer or under your individual disability policy. Therefore, it may be in your interest to consider making claims for SSDI benefits and long-term disability simultaneously. At the very least, this can allow you to be more efficient with obtaining medical records and completing documents.

Why the Social Security Administration Has Compassionate Allowances

The Social Security Administration recognizes that some conditions lead to a disability 100% of the time. Therefore, persons who are diagnosed with such conditions do not need to prove their disability. They only have to demonstrate that they have the diagnosis.

Because of this, the Social Security Administration instituted Compassionate Allowances. This is a list of conditions that support the automatic approval of SSDI benefits. This saves time by avoidingr the lengthy claim process that involves a detailed review of your medical records.

Having a condition on the Compassionate Allowance list does not necessarily mean that you will not be required to go through a claim process with the Social Security Administration . You will still have to provide medical records or the Social Security Administration may still request them from your providers. Your claim and case will still go through a review process.

Some of the Conditions on the Compassionate Allowance List

The list of Compassionate Allowance conditions is quite long. It includes a variety of terminal illnesses, cancers, autoimmune disorders, mental health disorders, and musculoskeletal disorders.

Some of the Compassionate Allowance conditions are:

Acute leukemia
Breast cancer
Child lymphoma
Fatal familial insomnia
Lewy body dementia
Liver cancer
Perry syndrome
Seckel syndrome
Skin malignant melanoma with metastasis
Small cell cancer
Thyroid cancer

The best way to understand if your condition is on the list is to check for yourself. The Social Security Administration updates the list from time to time, so do not assume a condition is not on it simply because it was not on the list in the past.

It is also important to note that if your condition is not on the list, that does not mean that you will not be approved for disability benefits. It simply means that you will not get automatic and immediate distribution of benefits based on a Compassionate Allowance condition.

There is no such Compassionate Allowance program when you are dealing with a long-term disability claim involving a group disability policy from your employer or under an individual disability policy you obtained privately.

Get Help With Your Long-Term Disability Claim

Applying for long-term disability and SSDI benefits is a complex process. It is full of potential obstacles that can delay or hinder the process. A mistake on your application or a misunderstanding over your records can lead to an inappropriate denial of benefits. If you are struggling with these processes, feel you have been unfairly denied benefits, or you seem to be waiting forever for anything to happen, consider getting help.

Reach out to a reputable attorney for disability insurance in San Diego that is highly experienced with long-term disability claims. Call the McKennon Law Group PC at 800-682-4137 to make an appointment with our legal team. We will help you understand what your options are and how we can help you fight insurance companies hat are unfairly denying your disability insurance benefits.

It is well-established that disability insurance companies do not like to pay claims. One powerful
way for an insurer to issue a facially plausible denial where a disability claimant has otherwise
established a disability is to assert that the disability claimant can still perform sedentary work.
Abrams v. Unum Life Ins. Co. of Am., 2022 WL 17960616 (W.D. Wash. Dec. 27, 2022) is an
excellent example of a disability insurance company employing this stratagem to thwart a
legitimate disability claim.

In Abrams, the plan participant/insured, William Abrams, was a high-powered trial and appellate
lawyer earning a base salary of $525,000 per year and was an active marathon runner who
planned to run in three major international marathons during 2020. Unfortunately, Mr. Abrams’
life completely changed in April 2020 when he began to suffer from frequent, near-daily fevers,
along with severe fatigue and mental fogginess. Mr. Abrams attempted to treat his sudden
illness while continuing to work, but it was clear to him and his colleagues that he was not the
same highly-functioning individual they had dealt with previously – his communications were
confused and he did not seem to understand information conveyed in meetings well enough to
participate.

After his symptoms failed to improve over the next several months, Mr. Abrams filed for long-term disability (“LTD”) benefits with Unum in July 2020. The subject LTD policy covered
Abrams if he could not perform his “regular occupation” because of “disability.” In relevant
part, “disability” was defined as “you are limited from performing the material and substantial
duties of your regular occupation due to your sickness or injury.” Unum denied Abrams’ LTD
claim based on the opinions of four paper reviewers, concluding that impairment was not
supported for the 90-day elimination period and that Plaintiff’s treatment plan could be provided
“while performing the noted sedentary demand level of [his] occupation.”

Abrams appealed the denial, bolstering his claim with opinions from seven different doctors –
four of whom diagnosed him with Long COVID and three of whom diagnosed him with Chronic
Fatigue Syndrome. Unum denied the appeal in July 2021, stating that neuropsychological tests
“demonstrated essentially normal cognitive functioning,” and that “Mr. Abrams did not meet the
criteria” for Chronic Fatigue Syndrome (“CFS”) because “his medical records have not
supported significant cognitive impairment… as required for the diagnosis of CFS.” By this
time, Abrams had exhausted his savings account, sold his home, and was drawing on retirement
savings to afford daily life.

Abrams filed suit in federal district court to recover the LTD benefits owed to him. The
applicable legal standard is well-established: A disability claimant must demonstrate disability
under the terms of the plan by a preponderance of the evidence. Armani v. Nw. Mut. Life Ins.

Co., 840 F.3d 1159, 116263 (9th Cir. 2016) (citing Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d
1290, 1294 (9th Cir. 2010)). This requires a “meaningful dialogue between ERISA plan
administrators and their beneficiaries.” See Booton v. Lockheed Med. Ben. Plan, 110 F.3d 1461,
1463 (9th Cir. 1997). The court began its analysis by noting that a trial lawyer’s regular
occupation is determined by examining how it is performed in the national economy. The court
found that trial work requires a high level of cognitive work, making court appearances, working
15-hour days, and traveling extensively, which is mentally and physically grueling. Unum failed
to account for these non-physical demands of the job, focusing its analysis solely on the minimal
physical demands. The court also noted that while Abrams’ doctors did not agree on a unifying
diagnosis, all seven of them agreed he was sick, which was sufficient to grant Abrams’ claim,
awarding him past due LTD benefits, with continuing benefits through July 20, 2023. The court
was also persuaded by sheer common sense, especially given Abrams’ highly successful legal
career prior to his illness: “If Plaintiff were able to work, then he would have done so prior to
selling his home and exhausting his savings. Instead, Plaintiff remains housebound and
unemployed.”

Notably, the court credited Abrams’ near-obsessive daily video recordings taking his own
temperature, to show that he was, in fact, experiencing daily fevers. The court also rejected
Unum’s contention that because there was no correct definitive diagnosis, he did not qualify for
disability:

Unum may be correct that [the plaintiff] has not been correctly diagnosed. But that does
not mean he is not sick. If [the plaintiff’s] complaints, and [the doctor’s] assessments, are
to be believed, [the plaintiff] cannot focus for more than a few minutes at a time, making
it impossible for [the plaintiff] to perform the varied and complex tasks his job requires.

Lastly, the court denied Abrams’ bad faith claim, finding that while Plaintiff had met his burden,
“the evidence of disability is not overwhelming.”

This case presents some practice pointers, one of which is – if you have recurrent objective
symptoms that can be documented to support your claim, you should be doing so. It is important
for individuals confronted with improper denials of disability coverage to seek highly competent
and experienced disability insurance attorneys to review and assess the facts and policy terms
and, if appropriate, sue to receive the benefits to which they are entitled. This is especially true
with respect to insurer denials based on the groundless assertion that they can perform sedentary
work with virtually any medical condition

Court Weighs Financial Conflict of Interest and Procedural Irregularities in the ERISA Claim Review Process and Finds Sedgwick Abused Its Discretion In Denying Long-Term Disability Claim