Resist the Urge to Submit a Quick Long Term Disability (LTD) Appeal – ERISA or Insurance Bad Faith

One of the most common mistakes we see with long term disability (“LTD”)  denials (ERISA and non-ERISA/bad faith) is claimants rushing to submit their appeal. The desire to move quickly is understandable:

  • You have no money coming in;
  • You are angry at the insurance company and want to give them a piece of your mind;

Make Sure Your Lawyer Knows the Law Controlling the “Standard of Review!”

Many of the “rules” governing ERISA claims are not contained in the statute itself, but rather are the result of judicial decisions interpreting ERISA. In the landmark case of Firestone v. Bruch, 489 U.S. 101 (1989), the U.S. Supreme Court upheld the right of an ERISA fiduciary (including insurance companies!) to reserve “discretion” to decide eligibility for benefits under an ERISA plan. When “discretion” is granted to an insurance company or a claims administrator, a reviewing court does not decide whether or not the claimant is entitled to benefits under an insurance policy. Instead, a court is limited to deciding whether the insurance company abused its discretion or acted “unreasonably” when deciding the claim.   Under this standard of review, some courts have concluded they are compelled to uphold the insurer’s decision merely because there was some medical support for the decision. See, Carlo B v. Blue Cross Blue Shield, 2010 WL 1257755 (D. Utah, 2010 (It does not matter whether the Court agrees with the insurer or its physicians. The decision need not be the only logical decision or even the best one.)

After years of unfair decisions under this standard of review, some states, including California, have taken action. Effective January 1, 2012, the California legislature outlawed discretion in policies. California Insurance Code, Section 10110.6. The statute applies to any policy which “issued or renewed” after January 1, 2012 and which covered residents of California.  What this means is that courts can now actually look at the evidence and decide for themselves whether they think an insured person is entiteld to benefits.  This is called a “de novo” proceeding, meaning the court will look at the evidence “anew” instead of deferring to what the insurance company decided. (See one of our earlier blogs for more info: http://www.californiainsurancelawyerblog.com/2015/03/california_insurance_code_sect_1.html )

Insurance companies such as MetLife, Liberty Life, Prudential and others have tried making all kinds of arguments to avoid the impact of section 10110.6. Application of the statute can depend on the facts of the case, but, since January 1, 2012, Kantor & Kantor has been successful in persuading many Federal Judges, and even insurance company lawyers, to invalidate or ignore grants of discretion written into insurance plans. A number of other experienced ERISA practitioners have also been successful in this argument. To date, the statute has been applied in at least 15 court decisions in California.

What’s Going to Happen to Obamacare?

Donald Trump has just been sworn into office as this country’s 45th president, and Barack Obama is a private citizen once again. Now that Obama is gone, will his signature legislative achievement follow close behind him?

If conservatives have their way, the Affordable Care Act (ACA), commonly known as Obamacare, will be a blip in our nation’s history. Under Obama, the Republican-controlled House of Representatives voted more than 60 times to repeal the ACA, and during his presidential campaign Trump repeatedly vowed to get rid of it.

Of course, this is all easier said than done. Many parts of the ACA are very popular, including the provisions that prevent insurers from denying coverage based on pre-existing conditions, and those that allow parents to keep their children on their coverage until age 26.

The pitfalls of doing your own appeal without talking to an attorney first.

Why pass on free personalized advice?

One of the people who contacted us this week was a woman who had her Long Term Disability benefits terminated by Standard Insurance Company after Standard had paid her those benefits for many years. Despite multiple surgeries, her symptoms had not improved. Each morning she takes powerful pain medications. Sometimes those medications offer enough relief to enable her to attend to daily functions, but often, they do not.

Either way, she was certainly not able to perform the duties of her job when Standard cut off her benefits. Nonetheless, Standard Insurance Company all of the sudden determined she had not provided sufficient proof of disability and terminated her Long Term Disability benefits. Thinking this was simply a misunderstanding, she appealed the denial on her own without speaking to an attorney first. After all she reasoned, Standard Insurance Company had told her all she needed to do was explain to them why she was still disabled.

Your Insurance Claim Will Probably Be Denied!

On January 13, 2017, the Los Angeles Times published a column entitled Healthcare insurance hell: If at first your claim is denied, try, try again

The article describes on insured’s extreme difficulty in obtaining approval for treatments of her multiple autoimmune disorders that cause chronic pain, migraines, extreme dizziness and debilitating chronic fatigue. As the title shows, the main thrust of the argument is to never give up if your health insurance claim is denied – however, this advice is not only applicable to health insurance claims – the same holds true, believe it or not, for Long Term Disability, Long Term Care, and even Life Insurance claims!  

Some interesting additional information is also included in the column:

Aetna Defends Claim of Arbitrary and Capricious Disability Benefits Termination

In Jacowski v. Kraft Foods, et al., the Federal District Court for the Western District of Wisconsin denied plaintiff Kathy Jacowski‘s claim that Aetna arbitrarily and capriciously terminated her long-term disability benefits in violation of ERISA.
Jacowski began working for Kraft Foods in 1981. In 2008, Jacowksi quit her job, citing her poor mental health. Her treating physician diagnosed her with depression, anxiety, and post-traumatic-stress disorder. In 2011, she was notified by Aetna, the insurer that Kraft contracted with to administer its disability benefits, that she qualified for total disability benefits. She received these benefits until February, 2014, when they were terminated.

Jacowski’s Claim

Jacowski claimed that the termination of her benefits violated ERISA because it was arbitrary and capricious. Her claim cited five reasons:
1. The defendant relied on biased medical evidence, and did not give deference to the opinion of her treating physician;
2. The defendant didn’t consider the fact that the Social Security Administration had determined that she is disabled;
3. There was no occupational analysis done which identified a job she could do;
4. The defendant didn’t consider her voluntary appeal; and
5. There was a conflict of interest between the defendant’s role of considering voluntary appeals and its interest in denying benefits.

The Legal Standard

The court noted that the “arbitrary and capricious standard is the least demanding form of judicial review,” but that “it is not a rubber stamp” for insurer decisions.

The Opinion

First, the court held that insurers have the right to consider all relevant medical evidence, and that ERISA does not require that deference be given to treating physicians.

Next, the court found that, “Although plaintiff is correct that failing to consider the Social Security Administration’s finding of disability may be evidence of arbitrary decision-making, a plan administrator is not forever bound by that determination.” In this case, because the SSA determination was more than five years old, the court determined that it was within the defendant’s discretion to ignore it.

The court then held that, under ERISA, “no categorical rule requires a plan administrator to provide the type of vocational analysis claim that plaintiff describes.” The court found that ERISA merely requires a “reasonable inquiry” into a claimant’s vocational potential.

Finally, the court determined that hearing a voluntary appeal is discretionary, and a decision not to do so is not subject to “arbitrary and capricious” review. As such, the court found that the conflict of interest was also not reviewable.

This case was not handled by Dell & Schaefer, but we feel it can be instructive for others who have had long-term disability benefits terminated. If you have a question about this case, or any other issue concerning disability benefits, contact one of our attorneys today for a free consultation.

MetLife Properly Limited Plaintiff’s Disability Benefits Under the Mental/Nervous Limitations Clause

In Stupar v. Metropolitan Life Insurance Company (MetLife), plaintiff, an icer with the Kroger Company, received 24 months of long term disability benefits due to her diagnoses of post-traumatic stress disorder (PTSD), major depression, panic and anxiety disorder. At the end of the two-year period, MetLife terminated her benefits on the grounds that she was limited to 24 months of benefits under the Mental or Nervous Disorders clause of the policy. She objected, exhausted her administrative remedies, then filed this ERISA lawsuit.

Plaintiff Failed to Present Any Evidence of a Physical Cause of Her Mental Conditions

After donating a kidney to her husband in 2006, plaintiff Hasnija Stupar suffered from numerous medical problems. Finally, in 2011, she was diagnosed with the above stated mental disorders and awarded 24 months of long term disability benefits. According to the terms of the policy, at the end of the 24 months, the only way she could qualify for long term disability is if she could provide medical documentation of a physical cause of her ailments.

The District Court analyzed hundreds of pages of Stupar’s medical reports. The Court noted that, even though she was evaluated and treated by numerous physicians, her condition remained the same from the time she was first diagnosed through the completion of the legal proceedings. Peer reviews by MetLife’s physicians found no independent medical reason for Stupar’s numerous psychological problems. Some physician reports noted she had a right-hand tremor, but treating physicians and an independent physician consultant (IPC) concluded that Stupar’s “tremors were caused by Plaintiff’s anxiety.”

The Court noted that MetLife “expressly requested additional information pertaining to Plaintiff’s tremors, but no such information was available given Plaintiffs lack of treatment and testing therefor.” Accordingly, the Court concluded that, “Based on the available evidence, it was not wrong for [MetLife] to infer that the tremors were likely mental in nature.”

MetLife Properly Denied Plaintiff’s Claim for Benefits for Her Alleged Bipolar Disorder

Stupar asserted her mental problems were due to a bipolar disorder which, under the mental limitations clause, might allow her to continue receiving benefits. The Court noted that no evidence of a bipolar disorder had ever been presented to MetLife except for one phrase in one of her numerous medical reports that stated, “Ms. Stupar ‘has a history of… bipolar.’” Since there was no evidence in the record to support Stupar’s assertion that she had a bipolar disorder, “she did not qualify for an exception to the 24-month limitation.”

This case was not handled by our office, but it may help those who suffer from a physical condition as well as a limiting mental disorder to understand the kind of evidence the insurer or Court looks for in evaluating a disability claim. If you have questions about this, or any other aspect of your claim for disability benefits, feel free to contact one of our attorneys at Dell & Schaefer for a free consultation.

MetLife Properly Limited Plaintiff’s Disability Benefits Under the Mental/Nervous Limitations Clause

In Stupar v. Metropolitan Life Insurance Company (MetLife), plaintiff, an icer with the Kroger Company, received 24 months of long term disability benefits due to her diagnoses of post-traumatic stress disorder (PTSD), major depression, panic and anxiety disorder. At the end of the two-year period, MetLife terminated her benefits on the grounds that she was limited to 24 months of benefits under the Mental or Nervous Disorders clause of the policy. She objected, exhausted her administrative remedies, then filed this ERISA lawsuit.

Plaintiff Failed to Present Any Evidence of a Physical Cause of Her Mental Conditions

After donating a kidney to her husband in 2006, plaintiff Hasnija Stupar suffered from numerous medical problems. Finally, in 2011, she was diagnosed with the above stated mental disorders and awarded 24 months of long term disability benefits. According to the terms of the policy, at the end of the 24 months, the only way she could qualify for long term disability is if she could provide medical documentation of a physical cause of her ailments.

The District Court analyzed hundreds of pages of Stupar’s medical reports. The Court noted that, even though she was evaluated and treated by numerous physicians, her condition remained the same from the time she was first diagnosed through the completion of the legal proceedings. Peer reviews by MetLife’s physicians found no independent medical reason for Stupar’s numerous psychological problems. Some physician reports noted she had a right-hand tremor, but treating physicians and an independent physician consultant (IPC) concluded that Stupar’s “tremors were caused by Plaintiff’s anxiety.”

The Court noted that MetLife “expressly requested additional information pertaining to Plaintiff’s tremors, but no such information was available given Plaintiffs lack of treatment and testing therefor.” Accordingly, the Court concluded that, “Based on the available evidence, it was not wrong for [MetLife] to infer that the tremors were likely mental in nature.”

MetLife Properly Denied Plaintiff’s Claim for Benefits for Her Alleged Bipolar Disorder

Stupar asserted her mental problems were due to a bipolar disorder which, under the mental limitations clause, might allow her to continue receiving benefits. The Court noted that no evidence of a bipolar disorder had ever been presented to MetLife except for one phrase in one of her numerous medical reports that stated, “Ms. Stupar ‘has a history of… bipolar.’” Since there was no evidence in the record to support Stupar’s assertion that she had a bipolar disorder, “she did not qualify for an exception to the 24-month limitation.”

This case was not handled by our office, but it may help those who suffer from a physical condition as well as a limiting mental disorder to understand the kind of evidence the insurer or Court looks for in evaluating a disability claim. If you have questions about this, or any other aspect of your claim for disability benefits, feel free to contact one of our attorneys at Dell & Schaefer for a free consultation.

MetLife Properly Limited Plaintiff’s Disability Benefits Under the Mental/Nervous Limitations Clause

In Stupar v. Metropolitan Life Insurance Company (MetLife), plaintiff, an icer with the Kroger Company, received 24 months of long term disability benefits due to her diagnoses of post-traumatic stress disorder (PTSD), major depression, panic and anxiety disorder. At the end of the two-year period, MetLife terminated her benefits on the grounds that she was limited to 24 months of benefits under the Mental or Nervous Disorders clause of the policy. She objected, exhausted her administrative remedies, then filed this ERISA lawsuit.

Plaintiff Failed to Present Any Evidence of a Physical Cause of Her Mental Conditions

After donating a kidney to her husband in 2006, plaintiff Hasnija Stupar suffered from numerous medical problems. Finally, in 2011, she was diagnosed with the above stated mental disorders and awarded 24 months of long term disability benefits. According to the terms of the policy, at the end of the 24 months, the only way she could qualify for long term disability is if she could provide medical documentation of a physical cause of her ailments.

The District Court analyzed hundreds of pages of Stupar’s medical reports. The Court noted that, even though she was evaluated and treated by numerous physicians, her condition remained the same from the time she was first diagnosed through the completion of the legal proceedings. Peer reviews by MetLife’s physicians found no independent medical reason for Stupar’s numerous psychological problems. Some physician reports noted she had a right-hand tremor, but treating physicians and an independent physician consultant (IPC) concluded that Stupar’s “tremors were caused by Plaintiff’s anxiety.”

The Court noted that MetLife “expressly requested additional information pertaining to Plaintiff’s tremors, but no such information was available given Plaintiffs lack of treatment and testing therefor.” Accordingly, the Court concluded that, “Based on the available evidence, it was not wrong for [MetLife] to infer that the tremors were likely mental in nature.”

MetLife Properly Denied Plaintiff’s Claim for Benefits for Her Alleged Bipolar Disorder

Stupar asserted her mental problems were due to a bipolar disorder which, under the mental limitations clause, might allow her to continue receiving benefits. The Court noted that no evidence of a bipolar disorder had ever been presented to MetLife except for one phrase in one of her numerous medical reports that stated, “Ms. Stupar ‘has a history of… bipolar.’” Since there was no evidence in the record to support Stupar’s assertion that she had a bipolar disorder, “she did not qualify for an exception to the 24-month limitation.”

This case was not handled by our office, but it may help those who suffer from a physical condition as well as a limiting mental disorder to understand the kind of evidence the insurer or Court looks for in evaluating a disability claim. If you have questions about this, or any other aspect of your claim for disability benefits, feel free to contact one of our attorneys at Dell & Schaefer for a free consultation.

Due to Lack of Objective Evidence, Ohio Court Upholds Sedgwick’s Denial of Short Term Disability Benefits

In Corey v. Sedgwick Claims Management Services, Inc., plaintiff Bruce Corey began working as a machine operator for Eaton Corporation in 1987. Beginning in February 2014, he was periodically granted short term disability benefits when he took a few days off of work due to cluster headaches. On May 8, 2014, Corey quit working completely and again applied for short term benefits.

A specific term of the disability policy required applicants to provide objective evidence of their disabling conditions. Since Corey was unable to comply with this contract provision, his application was denied. After Corey exhausted his administrative remedies, he filed this ERISA lawsuit. The Ohio federal district court upheld Sedgwick’s denial, finding that it “was supported by a deliberate, principled reasoning process and substantial evidence.”

The Ohio District Court Found the Denial of Short Term Disability Benefits Was Supported by Medical Evidence

The contract provision that required objective evidence of a disability itemized the types of evidence that could be presented in order to comply with the term:

· Physical examination findings (functional impairments/capacity).

· Diagnostic test results/imaging studies.

· Diagnoses.

· X-ray results.

· Observation of anatomical, physiological or psychological abnormalities and

· Medications and/or treatment plan.

In this case, neither plaintiff’s treating physicians nor reviewing physicians found any objective evidence to support plaintiff’s claims. The medical records of two treating physicians included plaintiff’s own reports about his pain. Both physicians said that his workday would occasionally be interrupted for a few hours, based on Corey’s own subjective reports of his symptoms. Neither physician claimed that Corey could not perform his job.

Corey argued that the prescription for Imitrex should meet the criteria of being disabled due to medications and a treatment plan. There was nothing in the record to indicate that any side effects of the medication interfered with plaintiff’s ability to do his job. In fact, the opposite was true. The evidence showed that the Imitrex helped control his headaches.

Two physicians reviewed the medical record and found nothing to substantiate plaintiff’s claims of inability to do his job. They credited plaintiff’s statements of headaches, but could not find objective evidence of how those headaches prevented him from doing his job.

The court concluded that, “Here, the quality and quantity of the evidence show that defendants’ denial of plaintiff’s short term disability benefits claim was not arbitrary and capricious.”

Sedgwick Was Not Required to Order a Vocational Evaluation

Corey asserted that Sedgwick did not fairly evaluate his claim since it failed to order a vocational evaluation to see if he was able to perform his job duties. The court disagreed and found no precedent requiring a plan administrator to order a vocational evaluation and concluded that the plaintiff could have himself undergone a vocational evaluation and presented it as evidence. In light of the substantial evidence supporting Sedgwick’s denial of short term benefits, its failure to order a vocational evaluation was not arbitrary and capricious.

This case was not handled by our law office, but we believe it can be instructive to those who have a contract provision requiring them to provide objective evidence of a disability in order for their application for short term benefits to be granted. If you have any questions about this issue, or are having any other problems relevant to your disability claim, consult one of our disability attorneys at Dell & Schaefer. We offer a free consultation.