ERISA Archives - Page 25 of 56 - McKennon Law Group

McKennon Law Group PC Achieves Complete Success at Trial Against Long-Term Disability Insurer Aetna in ERISA Lawsuit

Disabled claimants who suffer from conditions like myalgic encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) often face difficult hurdles in getting their disability benefits paid because of the subjective nature of these conditions. There is no objective test,such as an imaging study or blood test, to definitively prove that someone is feeling tired or weak. Yet, the medical community accepts ME/CFS as a complex and debilitating medical condition that often prevents people from doing their usual activities. Our client Nancy DeVries is afflicted with this condition and made a claim for short-term disability (“STD”) and long-term disability (“LTD”) benefits with her group disability insurer, Aetna Life Insurance Company (“Aetna”). After briefly paying her STD benefits, Aetna suddenly denied her claims, relying upon the reports of hired medical consultants who performed “paper reviews” of our client’s medical records and claimed that she had full-time work capacity. Our client hired McKennon Law Group PC to vigorously contest Aetna’s denial of her claims. We filed a detailed complaintunder the Employee Retirement Income Security Act of 1974 (“ERISA”) and took the matter to a bench trial.

In a 24-page opinion dated June 17, 2020, CentralDistrict of California federal court judge David O. Carter ruled in favor of McKennon Law Group PC’s client in her lawsuit against Aetna. DeVries v. Aetna Life Ins. Co., 2020 WL 3265108 (C.D. Cal. June 16, 2020). Judge Carterdiscussed several deficiencies in Aetna’s denial decision, focusing on the fact that Aetna did not consider Plaintiff’s “substantial and material acts necessary to pursue [her] own occupation,” and that the administrative record was “replete with evidence that Plaintiff suffers from a disability.” The court specifically noted numerous laboratory tests that produced abnormal results, the repeated notes and diagnoses offered by her attending physicians, including her diagnosis of Chronic Fatigue Syndrome. The court noted generally in Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011) that the Ninth Circuit held that a “lack of objective physical findings” does not necessarily justify a denial of benefits; that is, a disability insurer may not condition coverage on proof by objective indicators such as blood tests where the condition is recognized even though no such proof is possible. DeVries, 2020 WL 32651108, at *8. Judge Carter also noted that the group policy at issue did not require “proof” to meet a specified degree of “objectivity,” nor did it exclude the presentation and consideration of subjective evidence, such as reports of a claimant’s symptoms. Id.

The court then underwent a detailed analysis of ME/CFS:

According to the U.S. Centers for Disease Control and Prevention (“CDC”): ‘[ME/CFS] is a disabling and complex illness’ which often prevents people from doing ‘their usual activities.’ The CDC notes that ME/CFS ‘changes people’s ability to do daily tasks, like taking a shower or preparing a meal,’ and ‘often makes it hard to keep a job, go to school, and take part in family and social life . . . Researchers have not yet found what causes ME/CFS, and there are no specific laboratory tests to diagnose ME/CFS directly. Therefore, doctors need to consider the diagnosis of ME/CFS based on in-depth evaluation of a person’s symptoms and medical history. It is also important that doctors diagnose and treat any other conditions that can cause similar symptoms.’ DeVries, 2020 WL 32651108, at *9.

Based on its analysis of ME/CFS, the court found that Plaintiff had demonstrated by a preponderance of the evidence that she suffers from clinically evaluated, unexplained and persistent chronic fatigue of new onset as of approximately August 2016. Id. at *10. The court pointed to Aetna’s own paper reviewer who found that Plaintiff’s complaints of fatigue were consistently noted throughout the course of treatment and that she sufficiently provided evidence of tender lymph nodes, muscle pain, multi-joint pain, unrefreshing sleep and post-exertional malaise. Id. Because of this, the court found that “at the very least, then, the Administrative Record suffers from Chronic Fatigue Syndrome.” And, given the nature of her condition, the court found Plaintiff’s treating physicians to be more reliable witnesses than Aetna’s hired paper reviewers who failed to examine her in person. Id.

The court also considered the relevant standard of disability under Plaintiff’s policy with Aetna: that her disease or disability prevents her from performing the substantial and material acts necessary to her own occupation. The court found that Plaintiff consistently represented that she suffered from severe fatigue, sometimes to the degree that she was unable to get out of bed. Judge Carter wrote, “It is obvious that her fatigue would impair her ability to carry out the wide array of analytical, strategic, and material tasks that were expected of her in the regular course of her own occupation as a Senior Business Analyst.” Id. at *11. The court criticized Aetna’s application of this standard, as Aetna had only considered whether she could perform a sedentary occupation. Judge Carter noted that substantial and material acts may include a level of physical activity, but there is no basis for interpreting “substantial and material acts” as defined by or limited to the physical activity of an occupation. Id. at *9, citing Sabatino v. Liberty Life Assurance Co. of Bos., 286 F.Supp.2d 1222, 1232 (N.D. Cal. 2003) (“Inability to perform sedentary work is not the definition of disability set forth in the policy. The relevant definition of disability in the policy is ‘unable to perform all of the material and substantial duties of his occupation on an Active Employment basis because of an injury or sickness.’”).

Ultimately, Judge Carter found that our client was totally disabled from performing the material duties of her own sedentary occupation. The court awarded our client all of her benefits for the Policy’s “own occupation” period, plus prejudgment interest and our attorneys’ fees and costs. The order from the court will allow our client to collect all of her substantial attorneys’ fees and costs that she incurred while aggressively fighting Aetna for the last two years.

This decision provides substantial support to claimants who have subjective symptomology that is difficult to objectively measure. We often see insurers deny claims of our clients who suffer from chronic pain, Chronic Fatigue Syndrome, fibromyalgia, migraine headaches and other syndromes. Insurers may deny these claims based upon a “paper review” medical consultant who reviews medical records and forms an opinion on a claimant’s restrictions and limitations. This presents a difficult task for both the claimant to prove their own subjective conditions and for insurers to verify the legitimacy of claims. Thankfully, the Ninth Circuit protects claimants who suffer from these conditions. The DeVries opinion clarifies and substantiates the Ninth Circuit’s precedent and importantly considered that an “own occupation” policy definition does not simply mean a sedentary job. In fact, insurers must consider the analytical, strategic and managerial tasks that are expected of employees in the regular course of their occupations, not simply the physical requirements.

If your insurance company or plan administrator has mishandled or denied your claim, please contact our firm for a free consultation. We have extensive experience handling long-term disability claim denials under both ERISA and non-ERISA cases.

Court Rules Insurers Cannot Hide Behind Biased Expert Consultants to Dispose of Bad Faith Claims

Insurance companies owe a duty of good faith and fair dealing to the persons they insure. This duty is often referred to as the “implied covenant of good faith and fair dealing” which automatically exists by law in every insurance contract. They often defend “bad faith” litigation by invoking a what is known as the “genuine dispute” doctrine. In a recent California Court of Appeal decision, Fadeeff v. State Farm General Ins. Co., 50 Cal.App.5th 94 (2020), the Court ruled that an insurer relying on this doctrine should not automatically be considered to have acted in good faith just because the insurer relied on independent expert opinions when making claim determinations.

In Fadeeff, plaintiffs filed a property insurance claim with State Farm General Insurance Company (“State Farm”) for smoke and soot damage to their home due to a valley fire. After some initial payments, State Farm denied an additional claim for further smoke damage. After its denial, State Farm retained Forensic Analytical Consulting Services (“Forensic Analytical”) to perform an inspection and opine whether the additional repairs were necessary. Predictably, Forensic Analytical determined no further repairs were warranted. Plaintiffs filed a lawsuit against State Farm alleging breach of the implied covenant of good faith and fair dealing, or bad faith.

Subsequently, State Farm filed a motion for summary judgment asking the court to find that it did not deny plaintiffs’ claim in bad faith. State Farm argued that the genuine dispute doctrine automatically defeats a claim for bad faith where an insurer reasonably relies upon expert opinions when making its claim determinations. The trial court granted State Farm’s motion. Plaintiffs appealed.
State Farm argued that it could not have denied plaintiff’s claim in bad faith, since State Farm’s expert, Forensic Analytical, determined that no additional repairs were warranted. State Farm argued there could be no bad faith since its denial of the plaintiff’s claim was based on Forensic Analytical’s opinion and not its own opinion. The appellate court disagreed. The court held that an insurer’s reliance on an outside expert does not automatically insulate the insurer from a bad faith claim under the genuine dispute doctrine. Instead, when an insurer relies on the advice and opinions of independent experts, it is only a single factor in determining whether the insurer handled a claim in good faith. The court stated that there are several circumstances where a biased investigation claim should be decided by a jury.

In this case, the court held that all of State Farm’s conduct must be examined, not just the opinion of an independent expert when determining a claim for bad faith. For example, other factors to be considered include the following: (1) State Farm initially found that all claimed damage was caused by the fire, but the new adjuster for the additional claim concluded that some of the earlier claimed damage was caused by wear and tear; (2) Some of the additional damage was caused by the power washing that was recommended by State Farm; (3) It was apparent that Forensic Analytical did not perform a thorough investigation; and (4) State Farm’s coverage positions were inconsistent. Therefore, the court reversed the trial court dismissal of the plaintiff’s bad faith claim.
Importantly, the summary judgment motion was also reversed as to the issue of punitive damages. State Farm had previously argued that plaintiffs could not describe the factual basis for their punitive damages request and testified at deposition that they did not get the impression that anyone from State Farm was trying to harm them. However, with regard to punitive damages, the initial burden is on State Farm to show that plaintiffs could not prove that State Farm acted without malice, oppression or fraud. Only after State Farm had met its burden, did the burden shift to plaintiffs to establish evidence supporting punitive damages. The court held that State Farm had not met its burden, as plaintiffs’ “beliefs” do not conclusively answer the question of whether State Farm intentionally misrepresented or concealed a material fact because there can be other evidence to support these allegations.
Fadeeff is a very good opinion for California insureds who have all types of insurance claims, especially life and disability insurance claims as it significantly limits the genuine dispute doctrine, and thus the ability of insurers to utilize the doctrine as a complete defense to bad faith claims. This court did not allow insurers to hide behind its hired experts, no matter how biased they are, to avoid bad faith claims.

If your insurance company or plan administrator has mishandled or improperly denied your long-term disability, life insurance, health insurance, or accidental death claims, please contact our firm for a free consultation.

Second Circuit Finds Plaintiff Properly Plead Theories of Equitable Estoppel, Surcharge, Reformation and Breach of Fiduciary Duties to Hold Plan Administrator to Promise After Its Clerical Error Provided Over 50x Policy Value

Big, bureaucratic insurance companies and plan administrators can often mistakenly calculate benefits or provide incorrect accountings to insureds. These mistakes can become especially pronounced over time where insureds rely upon benefit accountings and representations of coverage to plan for their financial future and to decide whether to purchase insurance. With the Supreme Court’s decision in CIGNA Corp. v. Amara, 563 U.S. 421 (2011), the Court made clear that the equitable remedies of estoppel, surcharge, reformation and breach of fiduciary duty could be applied to hold insurance companies and plan administrators accountable in policies governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Despite that decision, it remains particularly difficult for an ERISA claimant to plead equitable estoppel. However, the recent Second Circuit opinion, Sullivan-Mestecky v. Verizon Communications, Inc., — F.3d —-, 2020 WL 2820334 (2d. Cir. 2020), provides clarity and support for this relief such that we may see more equitable estoppel claims that are successful under ERISA. The decision further supports theories of surcharge, reformation and breach of fiduciary duty in situations where a plan administrator mistakenly calculates benefits and produces values that are in excess of plan terms.

In Sullivan-Mestecky, the Second Circuit considered the doctrines of estoppel, surcharge, reformation and breach of fiduciary duties in relation to an ERISA employee life insurance policy under which the plan administrator had confirmed coverage of over $600,000 for years, only to realize upon claim that it had committed a clerical error and that the actual policy value should have been closer to $11,000. Ultimately, the court found that the beneficiary plaintiff, Kristine Sullivan-Mestecky, had properly plead her Section 502(a)(3) claims for equitable remedies under ERISA, and it reversed the district court’s decision that had found otherwise.

The plaintiff’s mother, Kathleen Sullivan, was employed by the New York Telephone Company, a predecessor entity to Verizon, from 1970 to 1978, during which period her annual income was $18,600. In June 2011, Sullivan contacted the Verizon Benefits Center, which at the time was administered on behalf of Verizon by Aon Hewitt Company. Verizon responded by sending her a “Retirement Enrollment Worksheet,” stating that she was eligible for a life insurance option from the Verizon plan that provided coverage in the amount of $679,000 through Prudential Insurance Company of America. Sullivan followed the instructions on the worksheet and enrolled in this coverage option. After enrolling and designating her daughter Kristine Sullivan-Mestecky as the beneficiary of the life insurance policy, Sullivan received various mailings from Verizon that confirmed the existence and coverage amount of the policy. Sullivan reached out to Verizon and “expressed her understanding, and even surprise, about the extent of her benefits. However, Center representatives repeatedly confirmed the existence and coverage amount of the policy.” Id. at *1-2.

Due to a calculation error, Aon Hewitt had coded Sullivan’s annual $18,600 income as her weekly income, but this mistake was not caught until after she died. Sullivan-Mestecky, understanding herself to be the beneficiary of a generous life insurance policy, allowed her aging mother to live rent-free at her home, covered her mother’s living expenses and paid off her debts, and also took an extended unpaid absence to care for her mother before her death. Of course, Sullivan did not feel that it was necessary to take out an additional life insurance policy due to the generous value of her employer policy.

Based on her mother’s age at the time of her death, Sullivan-Mestecky believed her life insurance policy was worth $582,600. After her mother’s death, Sullivan-Mestecky submitted a claim to Prudential, but Prudential paid only $11,400, which amount it stated was the true value of the policy.

Sullivan-Mestecky disputed the non-payment of her full benefits, and Verizon responded that it “had mistakenly calculated Sullivan’s large coverage amount and thus provided Ms. Sullivan with incorrect information about her life insurance policy.” Id. Sullivan-Mestecky therefore filed suit alleging claims under Sections 502(a)(1)(B) and 502(a)(3) of ERISA. On July 7, 2016, the district court granted Verizon’s and Prudential’s motion to dismiss the Section 502(a)(3) claim. On May 16, 2018, the district court granted summary judgment to both defendants on the Section 502(a)(1)(B) claim.

On appeal, the Second Circuit discussed equitable remedies under Section 502(a)(3). The court found that Sullivan-Mestecky could appropriately seek equitable relief under the Supreme Court’s decision in Amara and that her Section 502(a)(3) claim could proceed against Verizon. The court found that Sullivan-Mestecky could proceed against Verizon under the equitable remedies of estoppel, surcharge, reformation and breach of fiduciary duty.

In the Second Circuit, to make a claim for estoppel under Section 502(a)(3), a plaintiff must plausibly allege five elements: “(1) a promise, (2) reliance on that promise, (3) injury caused by the reliance, . . . (4) an injustice if the promise is not enforced, and (5) extraordinary circumstances.” Weinreb v. Hosp. for Joint Diseases Orthopaedic Inst., 404 F.3d 167, 172-73 (2d. Cir. 2005). The Sullivan-Mestecky court examined Verizon’s repeated oral assurances to Sullivan about the value of her life insurance policy in determining whether Sullivan-Mestecky had pled extraordinary circumstances, and it joined the Sixth Circuit in finding that estoppel could be plausibly pled as an appropriate equitable remedy by an ERISA plaintiff who is alleging gross negligence in the absence of intentional inducement. The court found that Sullivan-Mestecky had plausibly pled the five elements required to make an estoppel claim against Verizon, because Verizon had sent Sullivan an enrollment worksheet that indicated that she was eligible for a life insurance policy valued at $679,700, a retirement of confirmation worksheet, a confirmation of coverage on demand letter, a beneficiary confirmation notice and a Form W-2, all of which represented that Verizon was providing Sullivan with a generous life insurance policy. The court found that these written documents constituted and reflected the promise that Sullivan-Mestecky sought to enforce and that she had amply pled reliance on that promise. Sullivan-Mestecky, 2020 WL 2820334, at *5.

In considering the extraordinary-circumstances requirement of ERISA estoppel, the court found that this had been met, based on Verizon’s conduct that it found had amounted to gross negligence. Id. at *6. The court wrote:

Verizon’s agents sent numerous mailings informing and assuring Sullivan that she was entitled to a life insurance policy in the amount of $679,000. She relied on these representations only after diligently and repeatedly confirming their veracity and meaning with the Verizon Benefits Center. On calls with the Verizon Benefits Center, Sullivan expressed her surprise at the stated value of her life insurance policy, effectively alerting Verizon to the fact that it may have miscalculated the value. Not only did Sullivan draw attention to the high coverage figure, but an Aon Hewitt employee flagged the policy amount, writing in an email to a colleague that the amount seemed high and asking if the company’s software was somehow computing the wrong amount. Another Aon Hewitt employee then responded, erroneously, that the amount was correct. Instead of opening an investigation that likely would have uncovered the clerical error that led Sullivan and her daughter to believe that she had procured a generous life insurance policy, Verizon representatives reassured Sullivan that her beneficiary would receive, after the age discount, more than half a million dollars in death benefits. It was only after Sullivan’s death, when the purchase of alternative life insurance to support Sullivan-Mestecky was impossible, that Verizon attempted to correct its clerical error. In contravention of what it had repeatedly and unambiguously represented to Sullivan in writing and on calls, Verizon paid Sullivan-Mestecky a total of $11,400, less than two percent of what Verizon had promised. Verizon’s acts of gross negligence present circumstances far “beyond the ordinary.” The persistence and size of Verizon’s error, notwithstanding the ample inquiry notice provided by Sullivan’s calls to the Verizon Benefits Center, were “remarkable.” We find that Sullivan-Mestecky satisfactorily pled extraordinary circumstances. Id.

The Sullivan-Mestecky court also considered surcharge under Section 502(a)(3) and found that this was dependent upon the plaintiff’s allegation of fiduciary breach, specifically that Verizon failed to act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use as ERISA requires. 29 U.S.C. § 1104(a)(1)(B). The court found that she had plausibly pled that Verizon had breached its fiduciary duties through its gross negligence in its management of Sullivan’s life insurance policy by consistently failing to provide complete and accurate information about Sullivan’s status and options in response to her questions about plan terms and/or benefits. Sullivan-Mestecky, 2020 WL 2820334, at *6. The court found that this fiduciary breach was sufficient to support the equitable remedy of surcharge.

Further, the Sullivan-Mestecky court considered the equitable remedy of reformation under Amara, which is described as “[t]he power to reform contracts (as contrasted with the power to enforce contracts as written)” as “a traditional power of an equity court, not a court of law.” The Supreme Court wrote that “equity would reform [a] contract, and enforce it, as reformed, if . . . mistake or fraud were shown.” Amara, 563 U.S. at 440. The Sullivan-Mestecky court wrote that it need not discuss mutual mistake because the plaintiff had adequately pled that Verizon had committed equitable fraud by misrepresenting that Sullivan was entitled to a life insurance policy in the amount of $679,000. As a result of Verizon’s fraudulent representations, the court found that Sullivan had reasonably but mistakenly expected that her beneficiary would receive generous death benefits, and Sullivan-Mestecky thereby adequately pled circumstances that would permit the district court to equitably reform the terms of her plan with Verizon, sufficient to bind Verizon to its fraudulent representations.

Insurance companies and plan administrators typically try to excuse their mistakes that often have the effect of causing tremendous financial disruption for claimants who rely upon them for accurate accountings of their benefits and coverage. As the Sullivan-Mestecky matter shows, an insured could potentially receive a windfall from an insurance company or plan administrator’s mistake, as long as certain elements are met. This case will serve as a useful guidepost for equitable claims under ERISA.

If your insurance company or plan administrator has mishandled or denied your claim, please contact our firm for a free consultation. We have extensive experience handling equitable claims under ERISA.

The Basics of an ERISA Life, Health and Disability Insurance Claim – Part Ten: Vocational Experts

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 Ten of this series, we discuss vocational experts. The assistance of a vocational expert is generally only necessary when addressing a disability claim. Even then, for many claims, a vocational expert’s expertise is not required. However, under certain policies and circumstances, their assessment is critical.

Vocational experts typically analyze the duties of a particular job, a claimant’s ability to perform the duties of a job, what jobs are available that a particular disability claimant could perform and whether a job pays a certain level of income so as to determine if it is a “gainful” occupation. Some of these assessments are made in light of the individual’s education, training and work experience, the restrictions and limitations resulting from their medical conditions and the job’s required substantial and material duties. For example, a medical expert may submit to disability insurer a report stating that a disability claimant can only sit for six hours per day and cannot lift objects that weigh more than five pounds. The vocational expert would then take into consideration whether those restrictions/limitations prevent the person from performing a particular job that is or may be available for him or her to perform.

For most disability claims, especially those governed by ERISA, the policy’s language controls. But, there are occasions when applicable state or ERISA law will control certain aspects of a claim. A person’s claim may entail an assessment of their ability to perform their own occupation. Under those circumstances, the vocational expert will look at the job’s requirements and the restrictions and limitations provided to him by the insurer. The vocational expert may then determine whether the restrictions and limitations prevent the person from performing their job’s duties.

If a person’s claim is governed by an “any occupation” standard, then the vocational expert will have to perform a more in-depth analysis. The vocational expert will likely need to perform a transferable skills analysis (“TSA”). Conducting a TSA entails examining the Department of Labor’s Dictionary of Occupational Titles (“DOT”), which is a listing of the job requirements for a wide variety of different occupations. The vocational expert will compare the insured’s job experience, their restrictions and limitations and the DOT to determine whether the insured can potentially perform a particular job within the relevant market provided for by the policy. If the policy requires that the potential job be within a specific region or pay a specific salary, then the vocational expert will also examine whether those requirements are met. When addressing the reports of vocational experts, some courts have held that the vocational expert must define the duties of the identified “other occupations” in their report. See, e.g., Turner v. LINA, 2017 WL 6000099, at *3-4 (W.D. Wash. Dec. 4, 2017).

If an insurance company concludes that a person does not have restrictions or limitations, then it will not consult a vocational expert. Likewise, if the insurer’s medical experts conclude that a person has very substantial restrictions and limitations, then a vocational expert will likely not be consulted. Vocational experts become much more important when a person has some restrictions and limitations but is not completely disabled. Under those circumstances, a battle of vocational experts can become very important.

If an insurer obtains the opinion of a vocational expert, and the expert lists numerous positions that the insured can allegedly perform, then hiring a vocational expert as a rebuttal expert can be useful for the claimant. Most vocational reports relied upon by insurance companies are flawed because the vocational expert performing the analysis is not provided with detailed information about the insured’s work history. A cornerstone of a TSA is an assessment of the duties that the insured previously performed. This failure of the insurance company to provide detailed information about the insured’s employment history to the vocational expert often renders the report highly inaccurate.

A review of the vocational expert’s report may reveal other flaws that may persuade a court to disregard the opinion. For example, if the vocational expert fails to consider all of the insured’s restrictions and limitations, the court may conclude that the report lacks merit, and thus ignore it. See Bruce v. N.Y. Life Ins. Co., 2003 WL 21005313, *4-5 (N.D. Cal. April 28, 2003). The court will also likely discount the vocational expert’s report if the insurer failed to provide the expert with medical reports, or at least a synopsis of the contents therein. See Archuleta v. Reliance-Standard Life Ins. Co., 504 F.Supp.2d 876, 885-86 (C.D. Cal. 2007); Lambert v. CWC Castings Div., 2003 WL 1797916, *2–3 (W.D. Mich. March 14, 2003). Furthermore, courts have found that an insurer’s failure to confirm that the allegedly performable jobs are present in the local economy violates the terms of some disability policies. See, e.g., Kennard v. Means Industries, Inc., 555 F.App’x 555, 557-58 (6th Cir. 2014).

Finally, vocational experts who assess claimants for insurance companies are almost always only provided with the restrictions and limitations that were found to be applicable by the insurance company’s peer reviewers. These peer reviewers, who receive some or most of their income directly or indirectly from insurers, are almost invariably biased in favor of the insurance company and go to often absurd lengths to conclude that a person either is not disabled or, at most, only has minor restrictions and limitations. Given that the vocational experts are only given the limitations that were found to be present by these peer reviewers, another way to attack a vocational expert’s report is to convince the court that the underlying peer reviewer’s analysis is flawed. Garbage in, garbage out. If the court rejects the peer reviewer’s assessment, then anything relying on that assessment becomes useless.
For most disability claims, the real battle is over which medical expert has properly assessed a claimant’s level of disability. However, in some cases, finding a means of effectively attacking a vocational expert’s report can be the difference between convincing a court that an individual is disabled and losing the disability claim because the insurer found that a person could work in his own job or in any other job.

Department of Labor and Internal Revenue Service Provide Beneficiaries and Administrators Additional Time to Address Matters Related to ERISA and COBRA

COVID-19 has disrupted nearly every facet of life. The insurance industry is no exception. However, unlike some industries, the insurance industry is governed by a statutorily mandated and rigid system of deadlines imposed by various federal laws. Two of the most important laws are the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). The Department of Labor and the Internal Revenue Service both issue regulations and provide guidance on these laws. These laws affect a variety of employee benefits claims throughout the country. The laws contain numerous strict deadlines. Ordinarily, failing to perform a specific action by a given deadline can have serious ramifications for either the claimant or the provider. Given the current circumstances with COVID-19, it should come as no surprise that insurance companies, other benefits providers and claimants have all had difficulty meeting their deadlines during these trying times. On May 4, 2020, the Department of Labor and the Internal Revenue Service issued a “Joint Notice” providing for an “Outbreak Period” that began on March 1, 2020 and will end 60 days after the declared COVID-19 National Emergency has ended. The Joint Notice temporarily stops most of the claimant’s deadlines established under ERISA and COBRA for the duration of the current crisis.

The Joint Notice applies to many employee benefit programs. It applies to disability plans, pension plans and group health and life insurance plans that are subject to ERISA or COBRA. The Joint Notice affects a wide variety of deadlines, including those related to: filing a benefit claim, filing an appeal of an adverse benefits determination, requesting an external review of an adverse benefits determination, enrolling for benefits under the special enrollment provision of ERISA related to certain life events, electing to continue coverage under COBRA and paying COBRA premiums.

The extension of these deadlines is of critical importance for many employees affected by the current crisis. Whereas many firms have remained open under modified conditions, it is more difficult than usual for people to find legal assistance for their claim for benefits. They also may have greater difficulty obtaining necessary information from their doctor. The governmental stay of ERISA and COBRA deadlines helps to guarantee that employees have enough time to navigate the complicated systems instituted by ERISA and COBRA.

For claimants, one aspect of the Joint Notice is of great importance. The Joint Notice does not specifically provide for an extension to claims processing. The Joint Notice does explain that the Department of Labor acknowledges that timely claims processing may not always be possible. This is particularly true where there is a physical disruption to the plan’s or the service provider’s primary place of business. However, a benefits provider cannot simply ignore the requirement that it provide a prompt determination of a claim for benefits; someone who needs a determination as to whether they are entitled to medical coverage or other benefits cannot be forced to wait until the current situation ends.

McKennon Law Group’s Client Wins ERISA Pension Lawsuit

On April 1, 2020, Judge Janet Hall of the District of Connecticut ruled in favor of McKennon Law Group PC’s clients in their ERISA lawsuit against the administrator of their pension benefits, Henkel of America, Inc. Henkel had previously denied their claim for pension benefits, and our clients sued Henkel to obtain the benefits they are owed. One of our clients had previously worked for 12 years for a company whose pension plan liability was subsequently acquired by Henkel. Judge Hall pointed out many weaknesses in Henkel’s denial decision, including the fact that Henkel relied almost entirely on a single list of pension obligations that it had acquired, even though it had other evidence in its possession that called the validity of that list into question. For example, Henkel failed to investigate the records of the Third-Party Administrator hired by Henkel and the court pointed out other serious deficiencies in how Henkel handled our clients’ claim and requests for records. As she noted, “Henkel also had a duty ‘to investigate a claim for benefits and develop the reasonably available evidence.’” Hippe v. Life Ins. Co. of North America, No. 02-CV-86 (ILG), 2003 WL 22220749, at *9 (E.D.N.Y. July 31, 2003) (collecting cases). Henkel failed to fulfill this duty and created an administrative record that was inadequate for judicial review. The documents produced in the course of discovery filled some of the gaps, and raised doubts as to the basis upon which Henkel denied our clients’ claim for benefits.

We had several strategic victories along the way that contributed to winning this case for our clients. We prevailed on a motion for discovery. Discovery is rarely permitted in matters governed by ERISA, yet we convinced Judge Hall that it should be permitted in this matter. This discovery helped us to convince the court to apply a de novo standard of review to the claim under Halo v. Yale Health Plan, Dir. of Benefits & Records Yale Univ., 819 F.3d 42, 45 (2d Cir. 2016). We also successfully defeated an attempt to dismiss the entire case based upon statute of limitations and laches arguments. This was a hard-fought case in which Henkel was represented by one of the top pension defense firms in the country.

The Court entered judgment that remanded the matter to Henkel and required that Henkel properly investigate our clients’ pension claim. This decision led Henkel to pay our clients pension benefits and attorneys’ fees per a confidential settlement agreement.

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