Firm News Archives - Page 23 of 76

Life Insurer on the Hook for Breaching Terminated Contract

Life, health and disability insurers, whether governed by ERISA or state insurance bad faith laws, often do not have your best interests in mind, despite what the law requires of them. Insurers, like other businesses, are motivated by profits. Sometimes that drive leads to crossing legal, ethical or moral lines to improve the bottom-line. That is what occurred in a recent pro-policyholder Ninth Circuit Court of Appeal case, Burnett v. Conseco Life Insurance Company, 2017 WL 1828145 (9th Cir. May 4, 2017) (reversing the district court decision found at 87 F. Supp. 3d 1238 (N.D. Cal. Apr. 9, 2015)). In that case, applying California state insurance bad faith laws, the Ninth Circuit held a life insurer cannot completely absolve itself from further liability under a whole life insurance policy by terminating it. If it breaches the policy before termination, the life insurer is liable for damages caused by that breach, even if the policy is later surrendered. While that is the legal principle gleaned from the case, and it is an important one, what is far more interesting is the look into the life insurer’s boardroom and corporate decision-making the case facts provide.

Jeffrey Burnett, Joe Camp and many other class action plaintiffs had purchased whole life insurance policies from a life insurer in the 1980s and 1990s, which policies were later assumed by the defendant, Conseco Life Insurance Company. The policies provided a death benefit, investment income to the insured during his lifetime (including a guaranteed rate of interest on the policy’s account value), and a cash value payable upon the policy’s surrender. The policies had explicit provisions governing the amount of premiums that could be charged, and even included a “vanishing premium” after five years if certain policy formulas were met.

By the early 2000s, Conseco was losing money on the policies. In 2008, it substantially raised the premiums on the product to all policyholders in breach of the policy’s premium provisions and formulas. Conseco expected and intended thousands of policyholders would respond to the shock of massive premium increases by surrendering their policies or letting them lapse because they were no longer economically worth keeping, thus saving Conseco tens of millions of dollars on a money-losing product line. The strategy worked. Mr. Burnett, Mr. Camp and several other class members surrendered their policies in 2009 and 2010 because they were too expensive. In short, Conseco forced its policyholders to surrender their whole life insurance policies by improperly raising the premiums in violation of the terms of the contract. The company was driven by greed and profit, not its policyholders’ interests, contractual rights and benefits as the law requires.

The policyholders entered surrender agreements with Conseco whereby their policies were terminated in exchange for it paying the cash surrender value of the policies. That was far less than the death benefit. For example, one of the class action members, Mr. Camp, received a little over $89,000 when he surrendered his policy, but the death benefit, which was no longer available because the policy terminated upon surrender, would have been $500,000.

Burnett, Camp and other class members, now former policyholders of their terminated policies, sued Conseco for breach of contract, alleging it had forced them to surrender their policies by raising premiums in breach of the policy’s terms. The former insureds sought consequential damages caused by Conseco’s breach, such as the difference between the premiums they had been paying to Conseco and the premiums they would have to pay to another insurer in the marketplace for a like amount of whole life insurance, i.e. the replacement cost of the life insurance policies they had surrendered.

Conseco filed a motion to dismiss the Complaint for failure to state a claim, arguing that a former policyholder cannot sue on a terminated life insurance contract. The plaintiffs argued that they were entitled to consequential damages for Conseco’s breaches of contract because the breaches occurred while their policies were still in effect (even though the policies were later surrendered). The district court agreed with the insurer and dismissed the case, reasoning that because the plaintiffs received cash value upon the termination of their life insurance policies which were now surrendered, their claims were no longer “legally cognizable.”

The Ninth Circuit reversed the district court, siding with the former policyholders. The Ninth Circuit cited California law that “generally permits pre-termination breach of contract claims, including claims involving insurance contracts.” And, where “a contract is terminable at will, liability attaches for breaches occurring prior to the termination of the contract.” In other words, because Conseco breached the terms of the policies before the policies terminated (by illegally raising premiums), the now former policyholders could sue for those pre-termination breaches even post-termination of the contracts. They were entitled to recover the consequential damages caused by the pre-termination breaches – the replacement cost of the surrendered policies – but not the death benefit. The Ninth Circuit also pointed out that in the surrender agreements between the plaintiffs and Conseco, the plaintiffs did not expressly waive their right to sue for breach of contract.

Our take: The life insurer did not fare too badly. It lost the legal battle but won the profitability war. While it was found liable for breach of contract, it is economically better off for breaching. It forced numerous insureds to surrender their policies by drastically raising premiums (when it did not have that right under the contract), which allowed it to get out from under having to pay the death benefit and ongoing investment income on thousands of policies. It was able to dump an unprofitable product for a fraction of what it would have cost had the policies remained in force. It only had to pay for the plaintiffs’ cost to replace their terminated policies in the marketplace instead of much higher policy benefits.

The Burnett case is just one example of how some life insurers use deceitful business practices to avoid paying policy benefits. The insurer was willing to breach the contract to get the profit it wanted. We have seen far worse in the way of insurers denying legitimate claims, especially when the insured has not hired an experienced ERISA or bad faith lawyer. Life, health and disability insurers love to take your premiums but they resist paying claims. Do not let your insurer do that. If you have a legitimate life, health or long-term disability insurance claim, you need an experienced attorney to fight hard for you. At McKennon Law Group PC, our lawyers have decades of experience litigating these types of claims, both under ERISA and state insurance bad faith laws. Let us try to win your case for you.

The California Insurance and Life, Health, Disability Blog at mslawllp.com/news-blog/ and at mslawllp.com.
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When the Price is Right: Types of Attorneys’ Fee Arrangements For Handling Long-Term Disability ERISA Claims

The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949)387-9595 for a free consultation or go to our website at www.mckennonlawgroup.com and complete our free consultation form today.

Long-term disability insurance may be the most important type of insurance policy one can buy. In the unfortunate event that an unexpected disability prevents you from working, long-term disability insurance provides a substitute income in your time of need. However, insurers deny claims for long-term disability benefits more often than not. In fact, the U.S. Department of Labor estimates that insurers deny a whopping 75% of long-term disability claims. See our previous blog on the topic at https://mslawllp.com/prevalence-of-benefit-claim-denials-is-astounding/. Of course, insurance companies are playing the odds, counting on people not having the stamina, or the resources, to challenge every claim that is denied. At McKennon Law Group PC, we know insurance companies hate to see us representing their insureds because our years of experience, formidable reputation and dedicated and passionate legal advocacy help even those odds.

In this blog, we cover the important subject of attorneys’ fees, so you can better determine the best option to suit your individual needs. We briefly explain the benefits and drawbacks of the two basic fee structures for long-term disability claims: “contingency” and “hourly.” Of course, keeping in mind that less expensive is not always better and having a skilled and experienced disability benefits attorney handle your matter can make difference between getting hundreds of thousands of dollars in benefits and fees or nothing.

When Does the Insurer Cover My Attorneys’ Fees in an ERISA matter?

As a preliminary matter, there are instances where you may not have to pay for attorneys’ fees at all. If your long-term disability plan is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), then your insurer may be responsible for your attorneys’ fees. ERISA law, as interpreted by the courts, allows for recovery of attorneys’ fees, although whether the attorneys’ fees are covered is at the discretion of the judge. McKennon Law Group PC has never lost a motion to for attorneys’ fees after it has won an ERISA case. Although you do not necessarily need to win your case to recover your attorneys’ fees (you only need to show a degree of success on the merits), most courts consider several factors when deciding whether to award attorneys’ fees. Those factors include the unreasonable nature of the denial, the resources of the defendant, the deterrent effect of the award, whether the award will result in benefits for other employees under the same plan and the merits of each party’s position.

However, even if your attorneys’ fees are covered under ERISA, there are a few important considerations to keep in mind. ERISA cases require that you go through an appeal process directly to the ERISA plan administrator or to the insurance company. As a general matter, this requires gathering additional evidence to support your claim and drafting an appeal responding to the insurer’s reasons for denial. Before an ERISA claimant can pursue litigation, he must complete the appeal process so as to “exhaust administrative remedies.” Having an attorney early in the ERISA process can drastically improve the chances of your claim’s success by getting a strong appeal letter and evidence in to the administrative record. However, when it comes to attorneys’ fees, ERISA does not allow recovery for attorneys’ fees spent working on the appeal. This could affect an attorneys’ desire to handle an ERISA appeal.

How Do ERISA Insurance Lawyers Earn Their Fees? Contingency, Hourly and Other Fees Arrangements

In general, ERISA lawyers who represent claimants/plaintiffs typically take your case on either a “contingency” or “hourly” basis and there are benefits and drawbacks to both. It is possible to even pay a fixed fee or a hybrid of both an hourly and contingency fee. Whichever option you decide, it is important that you fully understand the fee arrangement you have with your attorney, and you should freely discuss any concerns you have at the outset.

When it comes to long-term disability cases, most lawyers work on a “contingency” fee basis. This means that, when you hire an attorney on contingency fee basis, the attorney is only compensated if you obtain a recovery, typically through a settlement or trial win. If you lose your case and there is no recovery, you typically would owe no fees or costs that the lawyer covers for you, which is what makes such contingency fee arrangements most attractive to clients. Typically, such a contingency fee is 35% to 45% of your total recovery. The percentage is usually tied to the stage you are at when the recovery is achieved. For example, a 35% fee if the recovery is made during the appeal process; a 40% fee if the recovery is made during the first part of litigation and a 45% fee if the recovery is made during the latter part of litigation. As an example, say you are successful in pursuing your wrongful denial of long-term disability benefits and the total award for past-due benefits is $80,000, then your attorneys’ will recover $28,000, $32,000 or $36,000, respectively. In some cases, your long-term disability insurer will reinstate your claim for benefits, and you will receive future monthly benefits. Depending on the type of fee agreement, your lawyer may also receive a percentage of those future benefits. Most good and highly experienced ERISA disability insurance lawyers will take a fee out of future disability benefits. The reason: appeals and especially litigation can take a law firm hundreds of hours in achieving a recovery for a disability insurance claimant and it is not economically viable to take these cases without taking a fee on future benefits.

Alternatively, you may decide to hire an attorney on an hourly basis, although most clients with a denied claim for long-term disability prefer contingency, simply because they cannot afford to pay a lawyer hourly. Under this option, your attorneys’ fees are paid directly to the lawyer, charged on an hourly basis. You are required to cover the costs and fees at the outset, but if you are successful on your claim, you receive the total recovery without sharing it with your attorney. Many times, ERISA disability claimants wish to have experienced ERISA disability insurance lawyers provide consulting services to guide them in the claims process, before a disability claim is denied by an insurer. In these situations, some ERISA lawyers will handle these matters on an hourly basis only. Some experienced ERISA disability lawyers like McKennon Law Group PC will provide such consulting services on an hourly basis or on a contingency fee basis, in the latter situation, taking a reduced fee from disability benefits paid in the future.

Is it Possible to Hire an ERISA Disability Insurance Lawyer and Keep All or Most of Your Long-Term Disability Benefits?

Yes, believe it or not. McKennon Law Group PC has a unique provision in its fee agreements with its clients: The firm can choose to keep 100% of an award of attorney’s fees as its total fees earned, which, if the fees are sufficiently high, may allow our clients to keep all of most of past-due and future disability benefits.

At McKennon Law Group PC, we work with our clients to find an arrangement best suits their needs and have represented claimants under all of the above fee structures. We have been told by the insurance industry and by objective mediators that we have a very strong reputation for effectively prosecuting policyholder claims and that we are the most aggressive California law firm they see fighting insurance company claim denials. We fight for our clients effectively and efficiently. If your ERISA or non-ERISA claim for health, life, short-term disability or long-term disability insurance has been denied, 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 ERISA and Non-ERISA insurance claims.

Beware! An Employment Lawsuit Can Keep You From Receiving Your Long-Term Disability Insurance Benefits

Have you ever considered filing a disability insurance claim and an employment action against your employer at the same time? If you are considering it, you will want to read this article. There could be big trouble ahead if you are not careful.

When a physical or mental illness strikes, preventing an employee from fully performing the duties of his or her occupation, employers typically respond in one of two ways. Some employers are helpful and understanding, and provide support while the employee and his or her doctors try to assess whether the employee will be able to continue to work. Unfortunately, some employers react in the completely opposite manner, harassing the employee until he or she quits or stops working due to the disability, or even firing the employee outright. Sometimes it is the employer’s behavior that actually causes the disability. In those situations, employees who have coverage under a short-term disability and/or long-term disability insurance policy can file a claim for disability benefits with the insurer. If the insurer properly evaluates and pays the claim, the employee can use the benefits to pay for life expenses.

Understandably, after being mistreated by their employers, especially in their time of need, many employees want to pursue an employment lawsuit against their former employer. While the desire to “punish” the employer may be strong, pursuing an employment lawsuit may not always be in the best interest of the employee and disability claimant. The reason: the filing of an employment lawsuit can prevent a disability claimant from receiving disability benefits. This is because one of the elements required in many employment law claims is that the person must be capable of adequately performing his or her job at the time he or she left employment. This includes claims for discrimination, wrongful termination, retaliation and harassment.

To adequately plead and prove these causes of action, the employee must assert that he or she was capable of performing the duties of the job. However, in order to assert a claim for disability income insurance benefits, claimants must prove the opposite: that their physical or mental condition prevents them from performing the material and substantial duties of their occupation. These two positions are in conflict, and applying the legal concept of judicial estoppel, courts have ruled that asserting the ability to perform one’s job duties in an employment law action as a matter of law prevents the employee from also claiming to be disabled.

For example, in Rissetto v. Plumbers & Steamfitters Local 343, 94 F.3d 597 (9th Cir. Cal. 1996), the plaintiff filed a Workers’ Compensation claim in which she asserted she was disabled from performing her work. After settling that claim with the insurer, she brought an employment action against her employer alleging that her termination constituted age discrimination. The dispute ended up before the Ninth Circuit, which reviewed whether a claimant was judicially estopped from asserting both a disability claim and a discrimination claim covering the same period of time.

After noting than a disability claim rests on an “inability to work,” the Court observed that the employment law claim rests on the position that Rissetto was capable of adequately performing her job at the time she was terminated. The Ninth Circuit then explained that because these two claims are in direct conflict, the later-asserted employment law claims were precluded under the concept of judicial estoppel, which “precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position.” See also Kovaco v. Rockbestos‐Surprenant Cable Corp., 834 F.3d 128 (2d Cir. 2016).

The California Court of Appeal similarly ruled that a plaintiff was judicially estopped from asserting a claim for racial discrimination after being out on disability leave for six months prior to termination, as the Court noted that he could not be able to perform his job and disabled from it at the same time. Where the plaintiff claimed “total inability to perform any of his job functions or any other occupation” due to disability, plaintiff could not tell another court that he had been qualified to perform his job and had been wrongfully terminated. See Drain v. Betz Laboratories, Inc., 69 Cal. App. 4th 950, 960 (1999); see also King v. Herbert J. Thomas Memorial. Hospital, 159 F.3d 192, 194 (4th Cir. 1998); McClaren v. Morrison Management Specialists, Inc., 420 F.3d 457, 458 (5th Cir. 2005)

Thus, a person who intends to file a claim for long-term disability benefits under a disability insurance policy must be very careful about asserting employment law claims against his or her employer. Often, employees do not understand and are not told that asserting employment claims can preclude disability insurance claims, so they do file such claims. Such claims are often in direct conflict with filing a disability insurance claim, and could cost the insured years of disability insurance benefits to which he or she would be otherwise entitled. Indeed, a disability insurance claim could be worth hundreds of thousands of dollars, perhaps even millions of dollars, and an unsuspecting disability insurance claimant could end up losing this valuable disability insurance claim. This is especially true if a disability insurance claimant has state law available to him or her and could otherwise pursue a broad range of damages by proving insurance bad faith, including punitive damages. This is why it is very important to make sure you consult with highly experienced disability insurance claims attorneys when considering which legal courses of action to follow.

Robert McKennon and Stephanie Talavera Publish Article On ERISA Ruling

In theApril 13, 2017edition of the Los Angeles Daily Journal, Robert McKennon and Stephanie Talavera of the McKennon Law Group PC published an article entitled “Ruling Limits Who Can Bring Suit Under ERISA,” summarizing a new Ninth Circuit case which limits the circumstances in which health care providers can bring suit under ERISA. In the article, Mr. McKennon and Ms. Talavera explain that the new ruling limits the ability of healthcare providers to bring suit under ERISA by narrowing the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations.DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017).

Robert McKennon and Stephanie Talavera Publish Article in the Los Angeles Daily Journal: “Ruling Limits Who Can Bring Suit Under ERISA”

In the April 13, 2017 edition of the Los Angeles Daily Journal, Robert McKennon and Stephanie Talavera of the McKennon Law Group PC published an article entitled “Ruling Limits Who Can Bring Suit Under ERISA,” summarizing a new Ninth Circuit case which limits the circumstances in which health care providers can bring suit under ERISA. In the article, Mr. McKennon and Ms. Talavera explain that the new ruling limits the ability of healthcare providers to bring suit under ERISA by narrowing the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations. DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017). However, the article also explains that even if health care providers are not able to avail themselves of ERISA remedies, they may well find solace in non-ERISA state law remedies.

The article is posted below with the permission of the Los Angeles Daily Journal.

Ruling limits who can bring suit under ERISA

By Robert J. McKennon and Stephanie L. Talavera

Courts continue to grapple with who can sue under the Employment Retirement Income Security Act of 1974. ERISA provides procedural and fiduciary protections that govern employer-sponsored insurance plans, but persons who want to sue under ERISA first must qualify as a plan “participant” or “beneficiary.” See ERISA Section 502(a), 29 U.S.C. Section 1132. Last month, the 9th U.S. Circuit Court of Appeals narrowed the term “beneficiaries” under ERISA to exclude health care providers, eliminating their right to sue under ERISA in most, but not all, situations. DB Healthcare, LLC v. Blue Cross Blue Shield of Ariz., Inc., 2017 DJDAR 2813 (Mar. 22, 2017).

The Case

In DB Healthcare, the 9th Circuit decided two similar cases together, as both addressed the same central issue: whether a health care provider (the doctor or hospital that provides health care to a covered patient) designated to receive direct payment from a health plan administrator for medical services is authorized to sue under ERISA. The 9th Circuit answered “no,” because the health care providers did not have direct authority as “beneficiaries” under ERISA and did not have derivative authority to sue as assignees.

The parties in DB Healthcare were engaged in a standard health care reimbursement dispute. The plaintiffs included 12 medical facilities in Arizona, 10 nurse practitioner employees and a medical facility in Bakersfield (the providers). The defendants, the administrators for the relevant ERISA-governed employee benefit plans, included Blue Cross Blue Shield of Arizona Inc. and Anthem Blue Cross Life and Health Insurance Company (the ERISA plan administrators).

The providers performed blood tests and other services for the individual patients enrolled in an employer-sponsored health insurance plan. Initially, the ERISA plan administrators reimbursed the providers for $237,000 and $295,912.87, but later changed course and requested repayment. After running post-payment reviews, the ERISA plan administrators decided the providers were not entitled to the reimbursements. Blue Cross found the tests were investigational, and therefore were not covered by the plan, while Anthem determined the women’s health center had used faulty practices to bill for the tests and therefore was not entitled to payment. The providers refused to return the money and a legal battle ensued.

The providers filed lawsuits against the ERISA plan administrators, asserting numerous claims under ERISA, but generally alleging that the ERISA plan administrators violated ERISA’s protections when they unilaterally determined that the blood tests and other services performed were not reimbursable.

As to Blue Cross, the providers sought injunctive relief regarding Blue Cross’ refusal to credential nurse-practitioners and its threat to cancel provider agreements if they did not repay them, alleging that Blue Cross violated ERISA’s prohibition against retaliation for the exercise of rights guaranteed by employee benefit plans. See 29 U.S.C. Section 1140. The providers also sought a declaratory judgment that Blue Cross’ recoupment efforts violated the ERISA claims procedure, 29 U.S.C. Section 1133, and the ERISA claims procedure regulation, 29 C.F.R. Section 2560.503-1, which provide procedural protections for ERISA claimants.

As to Anthem, the providers asserted four claims for relief, three under ERISA. Under ERISA, the providers sought declaratory judgment and an injunction that prohibited Anthem’s attempts to recoup payments as violating ERISA’s claims procedure, 29 U.S.C. Section 1133, and the ERISA claims procedure regulation, 29 C.F.R. Section 2560.503-1. The providers also sought monetary damages for past recoupments, and requested declaratory and injunctive relief regarding Anthem’s alleged violation of fiduciary duty to plan beneficiaries and participants. The district courts in each case found the providers were not authorized to sue under ERISA’s civil enforcement provisions.

The 9th Circuit affirmed the district court judgments dismissing the actions. As the court noted, ERISA outlines who can sue to vindicate a claim as a “beneficiary” under Section 502(a). ERISA defines “beneficiary” as “a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. Section 1002(8) (emphasis added). However, as the 9th Circuit noted in DB Healthcare, ERISA does little to directly define “benefit.” But, within the larger context of ERISA, the courts have determined that “benefit” refers to the specific advantage provided to a covered employee because of his or her employment, for a purpose connected to alleviating various life contingencies. See DB Healthcare at 2815-16 (citing Spinedex Physical Therapy USA Inc. v. United Healthcare of Arizona, Inc., 770 F.3d 1282, 1289 (9th Cir. 2014); Rojas v. Cigna Health & Life Ins. Co., 793 F.3d 253, 257 (2d Cir. 2015)). The 9th Circuit reasoned that reimbursement for health care services is not a “benefit” within the meaning of the ERISA. Thus, consistent with several other circuits, the 9th Circuit found that the providers were not “beneficiaries” within the meaning of ERISA’s enforcement provisions and could not bring claims directly under ERISA.

The 9th Circuit further held that the providers could not bring their ERISA claims under derivative authority, through assignments by individual employee beneficiaries. In determining that the providers were not entitled to reimbursement, the 9th Circuit reviewed several contracts that governed the relationships between the parties, as well as the underlying assignments.

As to Blue Cross, the governing plan document had a non-assignment clause that read as follows: “The benefits contained in this plan, and any right to reimbursement or payment arising out of such benefits, are not assignable or transferable, in whole or in part, in any manner or to any extent, to any person or entity.” The court found that this non-assignment clause prevailed over any purported assignments.

With respect to Anthem, the 9th Circuit found a lack of derivative authority for a slightly different reason. Although the plan had no prohibition on the assignment of the right to benefits, the dispute was as to recoupment of payment and therefore did not fall within the scope of the assignment. Thus, although the patients signed forms to the health care provider that stated “I Hereby Authorize My Insurance Benefits to Be Paid Directly to the Physician,” those forms did not actually give the health care provider the right to relief.

Moving Forward

While DB Healthcare limits the possibilities for reimbursement for some health care providers, it does not entirely foreclose the possibility of recovery. As the 9th Circuit noted, there is no reason that the providers in DB Healthcare could not have brought their claims in state court, as ERISA would not have preempted the claims. See Blue Cross of Cal. v. Anesthesia Care Ass’n, 187 F.3d 1045, 1050-52 (9th Cir. 1999).

Moreover, if medical providers cannot sue under ERISA because of an anti-assignment clause in the ERISA plan document, it is possible that they may still bring an action against a claims or plan administrator for breach of oral contract, equitable or promissory estoppel and other theories for recovery under state law if the claims or plan administrator pre-authorized coverage of the claim directly with the medical provider. See Morris B. Silver M.D., Inc., v. Int’l Longshore & Warehouse Union Pac. Maritime Ass’n Welfare Plan, 2 Cal. App. 5th 793 (2016) (holding that ERISA did not preempt provider’s claims for breach of oral contract, quantum meruit and promissory estoppel). Therefore, even if health care providers are not able to avail themselves of ERISA remedies, they may well find solace in non-ERISA state law remedies.

Robert J. McKennon is a shareholder of McKennon Law Group PC in its Newport Beach office. His practice specializes in representing policyholders in life, health and disability insurance, insurance bad faith, ERISA and unfair business practices litigation. He can be reached at (949) 387-9595 or rm@mckennonlawgroup.com. His firm’s California Insurance Litigation Blog can be found at mslawllp.com/news-blog.

Stephanie L. Talavera is an associate at McKennon Law Group PC.

Putting Your Best Claim Forward: Is Your Long-Term Disability Application Going to Be Denied?

The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949)387-9595 for a free consultation or go to our website at mslawllp.com and complete our free consultation form today.

Disability insurance may be the most important type of insurance you can buy. Why? Because it protects your income earning ability if you become disabled. It can provide you with a substitute income when, due to injury or illness, you become disabled and can no longer earn a living. Under most policies and under California law, you are considered “disabled” when you can no longer perform the substantial and material duties of your “own occupation” in the usual and customary manner and with reasonable continuity. If the long-term disability insurance plan is employer-sponsored, it is likely governed by the Employment Retirement Income Security Act of 1974 (“ERISA”). Under ERISA governed plans, you can ensure that you put your best claim forward by providing strong support to your insurance claims administrator. This blog article briefly outlines the support you can provide, which may prevent your long-term disability claim from being denied. That support includes strong medical evidence in support of your disability, sufficient evidence of your occupational responsibilities and consistent behavior reflected in your daily activities and on social media.

Obtain the Necessary Disability Forms and Complete Them Accurately

Your first step after deciding to file a long-term disability insurance claim is to obtain the necessary forms from your insurer and/or your employer. Make sure you carefully complete these forms making sure they are honest, accurate and not overstated.

Strong Medical Evidence for Your Disability

While the specific type of medical evidence you need depends on the circumstances of your physical or psychiatric disability, your claims administrator will need to see that you are under the care of a doctor or mental health provider for your condition who has the requisite expertise in your disabling medical condition(s). Additionally, to the extent you can, you should support your claim with “objective” medical evidence, in the form of X-rays, MRIs, CTs and blood work where possible. While you do need to support your claim with sufficient medical evidence, this can also come in the form of medication and medical records, physician completed forms provided by the insurer, diagnostic records and letters from your physicians. Frequently overlooked, medication records can work to provide additional medical support for your claim in two ways. First, medications, such as those for pain management, can provide additional direct evidence in support of your disability (such as ongoing pain). Second, such medications often have side effects, such as impaired concentration, that can also inhibit your ability to perform your occupation.

In addition to direct evidence of your ongoing, regular treatment, you should request statements from your regular treating physicians in support of your disability. Your physicians should provide detailed statements as to your physical limitations, which will support your claim by explaining how your medical condition(s) cause your restrictions and limitations that prevent you from performing your occupation. Additionally, your doctors should continue to support your disability throughout the claim investigation process. For example, some administrators request a “peer review” of your records by a doctor or nurse hired to review your claim. In this peer review, another medical professional reviews your medical records and other supporting evidence in your claim file, usually on paper although sometimes they can request an in-person medical examination. As part of the peer reviewer’s assessment of your claim, he or she may contact your primary treating physician and ask him or her additional questions about your disability. If this happens, you want to be sure that you have a treating doctor that strongly supports your claim.

Sufficient Evidence of Your Occupational Responsibilities

Although you need to check your specific plan’s definition of disability, it often relies on your inability to perform your “own occupation” or, after a certain period of time, “any occupation” for which you are qualified by education, training, or experience. Often, the claims administrator fails to take into account the specific requirements of your particular occupation, given your level of education, training and experience. Although often overlooked, you can easily request and provide your job description from your employer. Then, there can be no mistaking the requirements of your position. You should buttress your employer’s job description as necessary to assist you in asserting your disability.

Line Up Your Evidence in Support

Determine what other evidence you have to support your disability claim. Do you have witnesses who can support it? If so, get letters or statements from them. Do you have a disability placard from the Department of Motor Vehicles? If so, that may be relevant and you should submit it. Do you have photographs of your home or apartment that show devices you have installed to assist you with your disability? If so, you should submit them. You should think about what evidence exists that will support your disability claim and if it will support your claim, submit it to the insurer.

Surveillance and Social Media Consistent with Your Restrictions?

When you file a “proof of claim,” your insurer begins gathering information, typically referred to as an “investigation” pursuant to its duty to fully investigate all insurance claims. The information your insurer collects will include some of the information discussed above, such as medical records, pharmacy records and even a job description. However, to further investigate the sufficiency of your claim, some insurers may request surveillance or may review your social media. Surveillance may include more traditional “Sherlockian” investigations, such as undercover video surveillance (i.e., an undercover video recording of the insured’s daily activities for a certain period of time). Also, given the rise in the use of social media, it may also include a review of your social media activities. You should, if possible, discontinue or greatly reduce your use of social media.

Given the likelihood of surveillance, it is important that you conduct yourself in a way that is consistent with your restrictions. While some disabilities allow for intermittent periods of activity that may otherwise seem inconsistent, it is important for you to at least be mindful of the potential for such surveillance. As to social media surveillance, the same general principle applies, but please see our detailed article providing best practices in social media for those currently in evaluation for a long-term disability claim.

In addition to the detailed support you can provide, it is also important that you be mindful of the strict deadlines that apply to employer-sponsored ERISA long-term disability claims. Overall, providing the insurance claims administrator with sufficient and timely evidence to support your disability is integral to the success of your claim and having an experienced disability, health and life insurance attorney can make all the difference.

Consult an Experienced Attorney

If your claim is complicated, you may wish to consult an experienced lawyer how handles disability insurance claims and litigation, like the attorneys of the McKennon Law Group PC. We provide consultation services before and during your claim submission to make sure you are putting your best claim forward.

If you wish to consult us regarding the filing of your claim for health, life, short-term disability or long-term disability insurance or if your claim has been denied, 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 ERISA and Non-ERISA insurance claims.

Ruling limits who can bring suit under ERISA

Get the Answers and Assistance You Need