Court Denies Insurer’s Motion to Dismiss, Finding Plan Language Did Not Clearly Require Administrative Exhaustion Prior to Filing Suit

Posted in: Appeals, ERISA, Insurance Litigation Blog, Policy Interpretation September 04, 2019

Ordinarily, a participant or beneficiary of a plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) must avail himself or herself of the plan’s internal review procedures before bringing a civil action in federal court for recovery of plan benefits.  This includes group ERISA plans offering long-term disability, life, health or accidental death benefits.  Although ERISA does not explicitly require exhaustion of administrative remedies, federal courts have held that an ERISA plan participant must exhaust the plan’s administrative appeal procedure before filing a federal lawsuit.  See Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620 (9th Cir. 2008).  However, according to the Ninth Circuit, this exhaustion requirement applies only if the plan itself requires exhaustion.  …

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Tenth Circuit Finds that Policy Terms in an ERISA Plan Did Not Unequivocally Grant an ERISA Administrator Discretion to Interpret Plan Terms, Applies De Novo Review

Posted in: Disability Insurance, ERISA, Insurance Litigation Blog, Policy Interpretation, Standard of Review May 17, 2019

Insurance companies acting as ERISA plan administrators often are guilty of abusing their discretion to interpret policy language related to the level of benefits payable to a claimant under a long-term disability (“LTD”) policy in a manner most beneficial to them, rather than the claimant.  In a recent decision by the Tenth Circuit Court of Appeals, Hodges v. Life Insurance Company of North America, 920 F.3d 669 (10th Cir. 2019), the court addressed the ability of insurance companies such as Life Insurance Company of North America (“LINA”) from interpreting policy language that may determine the level of benefits payable to a claimant.

In Hodges, the Tenth Circuit Court of Appeals affirmed the ruling of the district court that …

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If You Must Miss Work Two Days a Month Due to a Disabling Condition, Are You Precluded from Working in Any Occupation Under a LTD Policy?

Posted in: Disability Insurance, ERISA, Insurance Litigation Blog, Policy Interpretation December 19, 2018

Facing a long-term disability (“LTD”) claim, ERISA plan participants under LTD policies can count on the fact that insurance companies will search for ways to escape payment of the monthly LTD benefits they promised their insureds.  These insurers often point out that insureds continue to work in their occupation between their initial diagnosis and the claim date, or that an insured’s job is sedentary and thus he or she is not precluded from performing light physical activities, or that an insured’s disabling condition is episodic and the symptoms do not render the insureds continuously disabled.  Most disability claimants have days where symptoms are better than others and therefore they cannot work continuously in any given month, missing several days of …

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Court upholds Commissioner’s Contention: A Single Insurance Code Violation Can Constitute Bad Faith Without Evidence of a General Business Practice

Posted in: Bad Faith, Insurance Bad Faith, Insurance Commissioner, Insurance Litigation Blog, Policy Interpretation, Regulations, Unfair Business Practices/Unfair Competition October 02, 2018

Every insurance policy, including disability, life, health or accidental death policies, contains an implied covenant of good faith and fair dealing between the insurance company and the insured.  This covenant requires that insurance companies refrain from acting in a way that unreasonably jeopardizes, impairs or interferes with the rights of the insured to receive the benefit of the insurance contract.  The Unfair Insurance Practices Act (California Insurance Code Sections 790, et seq., “UIPA”) was enacted to regulate the business of insurance by defining and prohibiting practices which constitute unfair methods of competition or unfair or deceptive acts or practices.

California Insurance Code Section 790.03(h) (“Section 790.03(h)”) enumerates a list of sixteen specific unfair claims settlement practices that insurance companies are …

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“Sole Cause” Provisions in Accidental Death and Dismemberment Policies: Are ERISA Claimants Getting a Fair Shake?

Posted in: Accidental Death or Dismemberment, ERISA, Insurance Litigation Blog, Policy Interpretation August 22, 2018

According to the Centers for Disease Control, unintentional injury is the leading cause of death among people ages 1 to 44.  For this reason, Accidental Death and Dismemberment (“AD&D”) Insurance should be an essential component of insurance coverage for most families.  As preventative care expands and baby boomers remain active, accidental deaths will likely continue to rise as the leading cause of death among individuals.  While AD&D coverage is important to protect families from unforeseen injuries and death that can have severe financial repercussions, insurance companies do not like to pay these claims as they often attempt to limit the scenarios in which an insured can recover an AD&D benefit by placing “sole cause” provisions in AD&D policies.  These provisions …

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Sitting: If you are Unable to do it, are you Totally Disabled Under a Long-Term Disability Policy?

Posted in: Disability Insurance News, ERISA, Insurance Litigation Blog, Policy Interpretation August 03, 2018

While most people tend to have a common-sense view of what it means to be disabled, under long-term disability (“LTD”) policies, an insured must satisfy the terms of a disability policy and its specific definitions of “disability” to receive LTD benefits.  Within the first two years of a disability claim, “disability” in a policy is normally defined as the inability to perform the essential duties of one’s own job. Thereafter, “disability” is usually defined as being prevented from performing one or more essential duties of any occupation for which an insured is qualified by education, training and experience.  This “own occupation” versus “any occupation” analysis is the source of a substantial amount of judicial opinion.

Insurance companies typically argue that

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Exhaustion of Administrative Remedies in ERISA: The Potential Death Knell of a Disability, Life or Health Insurance Claim

Posted in: Disability Insurance News, ERISA, Insurance Litigation Blog, Insurance Questions and Concepts, Policy Interpretation January 06, 2018

The Employee Retirement Income Security Act of 1974, or ERISA, establishes protections for most employee benefits offered through employer-sponsored benefit plans. ERISA requires that the plan and claims administrators adhere to certain internal procedures, often referred to as “administrative remedies,” when determining a plan participant’s eligibility for benefits. Typically, these administrative remedies include internal appeals directly to the insurer or claims administrator. Although each individual plan is different, most plans require at least one level of internal appeal, which you would have to “exhaust” before you can file a lawsuit. However, some plans require that an employee exhaust two levels of internal appeals before he or she can file suit.

Whether it is one or two levels of appeal, exhausting …

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Cohorst v. Anthem: When Does Waiver Apply under ERISA?

Posted in: Disability Insurance News, ERISA, Insurance Litigation Blog, Insurance Questions and Concepts, Policy Interpretation December 26, 2017

The Employee Retirement Income Security Act of 1974, or ERISA, governs most employer-sponsored benefit plans.  ERISA establishes protections for employees in the administration of their employer-sponsored benefits, requiring that the administrator adhere to certain requirements when determining a plan participant’s eligibility for benefits.  In ERISA cases, typically the plan’s terms govern.  However, ERISA does recognize certain “equitable” doctrines for situations not necessarily covered by the terms of the employer-sponsored plan.  One of those equitable doctrines is “waiver,” which the courts have established as the intentional relinquishment of a right under the plan.  In this article, we address Cohorst v. Anthem, No. CV 16-7925-JFW (SKX), 2017 WL 6343592 (C.D. Cal. Dec. 12, 2017), a recent decision from the Central District …

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When the Clock is Ticking: The Interplay of the Contractual Limitations Period and the Statute of Limitations in a Disability Insurance Case

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog, Insurance Questions and Concepts, Policy Interpretation, Statute of Limitations December 26, 2017

The Employee Retirement Income Security Act of 1974, otherwise known as ERISA, governs most employer-sponsored benefit plans, including short and long-term disability benefits, life benefits, accidental death and dismemberment benefits and others.  ERISA was enacted to protect employer-sponsored benefits provided to employees.  As such, ERISA requires that the plan administrator, typically the insurer or employer, adhere to strict standards and deadlines.  However, while ERISA does set strict internal deadlines for the appeals process, it does not specify a time limit to bring a lawsuit for wrongfully denied benefits.  In this article, we discuss the statute of limitations and the contractual limitations periods in ERISA benefits cases and a relatively recent and plaintiff-friendly case decided by District Court judge Michael Fitzgerald …

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Top 5 Issues to Keep in Mind When Litigating ERISA Claims

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog, Insurance Questions and Concepts, Policy Interpretation, Statute of Limitations May 28, 2017

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog and Disability Insurance News that deal with frequently asked questions in the insurance bad faith, life insurance, long-term disability insurance, annuities, accidental death insurance, ERISA and other areas of the law.  To speak to 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 the free consultation form.

The Employee Retirement Income Security Act of 1974, otherwise known as ERISA, governs most employer-sponsored benefit plans, including plans that provide health insurance, disability insurance and life insurance to employees.  ERISA protects employees and requires that plan …

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