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McKennon Law Group PC Wins Significant Victory in Ninth Circuit Court of Appeals for Employee Disability Benefits

NEWPORT BEACH, Calif., Jan. 24, 2024 /PRNewswire/ — McKennon Law Group PC, a national law firm specializing in representing claimants and employees in bad faith insurance and ERISA benefits cases, is proud to announce a significant victory for disability benefits claimants.

The case, Kayle Flores v. Life Insurance Company of North America, No. 22-55779, 2024 WL 222265 (9th Cir. Jan. 22, 2024), involved a claimant who had short-term disability (“STD”) and long-term disability (“LTD”) coverage through her employer.  She was denied STD benefits and brought suit in federal court.  The claimant also sought LTD benefits, even though she had never submitted an LTD claim.  The district court agreed that the insurance company incorrectly denied STD benefits but also held that the claimant was not entitled to LTD benefits because she did not file an LTD claim.

The claimant then filed an LTD claim with the insurer which was also denied.  She brought a second lawsuit and the insurer moved to dismiss the case on the grounds that the question of eligibility for LTD benefits was already decided and could not be relitigated.  The district court agreed and dismissed the case because of the res judicata/claim preclusion doctrine.

The claimant appealed and the Ninth Circuit reversed the dismissal.  The Court concluded that the claimant’s cause of action for LTD benefits did not accrue until she submitted an LTD claim and received the denial from the insurance company.  Since the LTD denial came after her first lawsuit, the question of eligibility for LTD benefits could not have been litigated in the first case.

“We are very pleased with the Ninth Circuit’s decision in this case,” said Robert McKennon, founding shareholder of McKennon Law Group PC and attorney for the plaintiff.  “The decision was correct from both an equitable and legal perspective.  Our client will now be able to pursue the LTD benefits that she desperately needs, and we look forward to continuing our fight against the insurance company.”   

This decision is significant because the issue of res judicata/claim preclusion in this situation had never been addressed in the history of U.S. jurisprudence and substantially protects employee benefits to ensure technical legal doctrines do not deprive them of their much needed employee benefits.

Attorneys Robert McKennan and Joseph Hoff represent the plaintiff, Kayle Flores.

McKennon Law Group has over 70 years of experience specializing in long-term disability and short-term disability insurance, life insurance, health insurance, accidental death insurance, and long-term care claims, as well as all types of ERISA litigation claims involving employee benefits, including group insurance claims, pension claims and severance claims.

What is Professional Liability Insurance?

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

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

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

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

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

Who Needs Professional Liability Insurance?

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

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

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

When Will Professional Liability Insurance Pay Out?

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

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

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

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

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

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

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

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

Has Your Disability Insurance Claim Been Denied?

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

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

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

Know Your Disability Policy

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

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

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

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

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

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

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

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

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

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

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

 

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

Has Your Claim for Disability Benefits Been Denied?

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

How Will an Attorney Help You?

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

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

McKennon Law Group is Here for You

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

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

Are You Required to Have Health Insurance in California in 2023?

There is an individual mandate in California that requires people to be covered by health insurance. This means, technically, you have to have health insurance or you are financially penalized. Find out more about this mandate and get some answers to some other common health insurance questions in California below.

What Is the Individual Mandate in California?

The federal government instituted an individual mandate with penalties when it implemented the Affordable Care Act. This involved requiring people to be covered by health insurance or pay a penalty when they filed their federal income taxes. The federal mandate and penalty have since been revoked, but several states have their own mandate, California among them.

The states that have such a mandate with penalties as of 2023 include California, Massachusetts, New Jersey, and Rhode Island. The District of Columbia also enforces health insurance via a tax penalty.

In California, the tax penalty for not having insurance is $850 per adult. You also must pay $450 per dependent under the age of 18. So, imagine that a family of five — two spouses and three children — are uninsured for the entire year. At tax time, the penalty they would face is $3,050.

How to Get Health Coverage in California

You can get health insurance coverage in California via a variety of methods. First, you may be able to take advantage of an employer-sponsored healthcare plan. These plans are offered by employers to covered employees. The employer pitches in to help cover some of the cost of the health insurance, which may make the premiums less expensive for employees.

You may also be able to buy an individual plan through a healthcare marketplace. This is the primary option for many people who do not have access to insurance through an employer. In some cases, people who do have access to a plan through an employer may choose to go this route because the employer-sponsored plan is too expensive or prohibitive. If the premiums offered by an employer are more than 9.12% of the income of your household in 2023, you can access discounts and other benefits through Covered California.

Eligible individuals can also take advantage of government programs such as Medicaid or Medicare to get insurance. Medicaid may be an option for those with lower incomes that cannot afford individual health insurance.

Do Employers in California Have to Offer Health Insurance Coverage?

California does not have a state mandate about employer coverage. However, there are federal guidelines for which employers must offer some sort of employer-sponsored healthcare coverage. Employers that have 50 or more full-time equivalent employees have to offer insurance or face monetary penalties.

This means that employers who have 50 or more full-time employees or the equivalent to that many employees in full- and part-time employees must provide coverage options. A full-time employee for the purpose of this mandate is someone who works, on average, 30 hours a week or more. A full-time equivalent refers to multiple part-time employees that add up to the full-time hours. For example, if you have two part-time employees that each work 15 hours per week, they total up to one full-time employee for the purpose of calculating whether or not you meet the mandate requirements.

If you are not sure what your obligations are as an employer when it comes to benefits, it can be a good idea to consult an experienced benefits or human resources attorney. Knowing your legal obligations can help you avoid issues in the future.

Protecting Your Rights With Experienced Health Insurance Lawyers When Your Health Insurer Denies Your Health Insurance Claim

Whether you have insurance through an employer or buy an individual plan in California, it is important to know what your rights are so you can work to protect them. It is not uncommon to experience disputes with insurance companies or feel that your insurance company is acting in bad faith concerning your medical insurance claim. Here are a few common disputes that occur between healthcare insurance companies and policyholders about which you may want to contact an experienced health insurance attorney:

  • Whether or not services are medically necessary. Insurance providers create language in benefits documents that says certain treatments or procedures will be covered if they are medically necessary. However, this often creates some room for insurance companies to deny procedures because medical necessity has not been proven to their liking — even when doctors or other providers believe procedures are required and thus medically necessary.
  • Whether usual or customary expenses are adequate. Insurance companies set usual and customary limitations on an amount they are willing to pay for common services. However, in some cases, these amounts may not be sufficient to cover required services.
  • Whether a treatment is considered investigational or experimental. In many cases, insurance companies do not cover investigational or experimental treatments. That can mean that coverage is denied for relatively new procedures or medications even if those have been deemed to be a good solution to a medical problem or a doctor has ordered them. Insurers will even deny medical insurance claims when medical procedures have been around for many years and are well-proven to be effective.

Get Legal Help Through Health Insurance Attorneys With Your Health Insurance Battles

Dealing with medical insurance disputes can be daunting, especially because you typically do so when you are not feeling well or are dealing with a serious medical issue or recovery. This is just one reason it is a good idea to get legal help when your health insurer denies your health insurance claim. If you are dealing with bad faith or ERISA health insurance claims disputes, contact the McKennon Law Group PC at 949-504-5381 for a free consultation to find out how we can help.

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

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

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

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

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

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

What Is My Responsibility As The Policy Owner?

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

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

What Is The Insurance Companies Responsibilities?

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

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

How Can An Insurance Lawyer Help Me?

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

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

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

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

What Are Some Material Misrepresentation Examples?

There are four documents where material misrepresentation can potentially happen:

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

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

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

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

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

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

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

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

How Can An Insurance Lawyer Help Me?

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

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

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