Mistreated by Your Insurer? Insurers May Not Be Able to Hide Behind ERISA Preemption to Defeat Claims for Intentional Infliction of Emotional DistressNovember 30, 2015 Robert McKennon
Insureds obligingly pay premiums on their life, health and disability insurance policies and dutifully provide updated information upon request by their insurers, but often do not enjoy the same courtesy when they file an insurance claim. In extreme cases, antagonistic insurers engage in a host of tactics, including appointing claims examiners who refuse to return phone calls, conducting intrusive surveillance, accusing insureds of filing false claims or inundating the insured’s employer and treating doctors with document demands—only to deny the insured’s claim. Astonished by this treatment, many insureds wonder if they can sue them for emotional distress damages. The short answer is yes—but there are hurdles.
The November 6, 2015 edition of the Los Angeles Daily Journal features an article written by Robert McKennon and Joseph McMillen of the McKennon Law Group entitled: “Supreme Court Ramps UpInterest in ERISA.” In the article, Mr. McKennon and Mr. McMillen discuss five important United States Supreme Court cases involving litigation over employee life, health and disability benefit claims governed by the Employee Retirement Income Security Act of 1974. It discusses these cases and explains that the High Court has: (1) relaxed the standard for an employee to recover his attorney fees; (2) allowed discovery previously not permitted; (3) significantly expanded employee remedies; (4) determined plan language controls benefit reimbursement claims; and (5) confirmed an employer’s right to choose plan terms limiting the time to file a lawsuit.
AB 387 Grants California Department of Insurance New Powers to Protect Disability Insurance ConsumersOctober 14, 2015 Scott Calvert
Short-term disability insurance and long-term disability insurance policies provide insurance benefits to consumers who are unable to continue working due to injury or sickness. Such coverage can be offered as a benefit of employment by an employer (in which case, the policy is usually governed by a federal law called the Employee Retirement Income Security Act of 1974 or ERISA) or can be purchased by the individual insured.
With Discretionary Language Even Barred in Self-Funded ERISA Plans, is This the Death of The Abuse of Discretion Standard of Review In California?October 12, 2015 Scott Calvert
Recently, we explained that District Courts within the state of California, applying California Insurance Code section 10110.6, ruled that, even if an insurance Plan contains language giving discretion to a claim administrator, that language is unenforceable, and de novo is the proper standard of review. See The Death of the Abuse of Discretion Standard of Review in ERISA Disability Insurance Cases in California. A recent ruling expanded the application of California’s anti-discretionary language statute to self-funded plans, further signaling the end of the abuse of discretion standard of review in California Federal Courts.
Long-term care insurance covers long-term personal and custodial care services, including in a variety of settings such as your home, a community organization or other facility. Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with their activities of daily living when they are unable to perform these activities.
Individuals who have these policies do not currently receive periodic notification from their insurer that these benefits are available. Without notification, these individuals and their families can easily lose track of the existence of the benefits, especially if the insured suffers from cognitive impairment. These individuals and families likely end up paying for care despite having this insurance or doing without when, in fact, benefits are available.
Robert McKennon and Joe McMillen Publish Article: “Examine the ‘Reasonable Expectations of the Insured'"September 25, 2015 Robert McKennon
The September 22, 2015 edition of the Los Angeles Daily Journal features an article written by Robert McKennon and Joseph McMillen of the McKennon Law Group entitled: “Examine the “Reasonable Expectations of the Insured.” In the article, Mr. McKennon and Mr. McMillen discuss the California Court of Appeal’s decision in Sequeira v. Lincoln National Life Ins. Co., 2015 DJDAR 10163 (Cal. App. 1st Dist. Aug. 31, 2015), in which the Court applied the “Reasonable Expectations of the Insured” doctrine to allow an employee of a group life policy to collect life insurance benefits. Mr. McKennon and Mr. McMillen explain this doctrine that has been so vital to allowing insureds to gain their insurance policy benefits.
Well-intentioned policymakers enacted the Employee Retirement Income Security Act of 1974 (“ERISA”) over forty years ago to provide for the protection of participants’ employee benefits in part by establishing a uniform set of rules to ensure efficient proceedings. One of these notable rules limits the scope of permissible evidence for actions commenced under ERISA section 502(a)(1)(B). This scope of evidence further depends on whether the reviewing federal court employs an abuse of discretion, or de novo, standard of review. Because discovery can be an expensive and time consuming process, insurers and claims administrators often take the position that discovery is irrelevant and not permitted under ERISA. As the cases below show, although limited, discovery is not forbidden in de novo review cases and ERISA claimants should actively seek discovery, taking care to clearly explain why the discovery sought is necessary to a de novo review.
Group Life Insurer’s Literal Policy Interpretation Penalizing Insured for not working on Paid Holiday RejectedSeptember 08, 2015 Joe McMillen
Group life insurance policies often have confusing language about when they become effective. A trial court recently interpreted one to mean that the policy had not become effective to a full-time employee, though he was already eligible for the coverage, because he was not physically present at work when the policy was issued to his employer. Instead he was at home for a paid holiday and then in the hospital on sick-leave because of a sudden and fatal illness. The insurer and trial court penalized the employee for taking his paid holiday and sick-leave. They docked him the life insurance proceeds for which he had paid. The dispute centered around the policy’s “effective date of coverage” provision: whether being a full-time employee was enough to make the policy commence even if out for a sick-day. Or whether the employee had to be actively working in the employer’s building.
In an important victory for claimants, a United States District Court recently determined that a plaintiff who obtained an individual disability insurance policy through a conversion provision in an ERISA plan can pursue remedies in a state court under the newly issued individual policy. This ruling is important because the range of damages available through a lawsuit containing state law claims is much broader than the range of damages available through ERISA, and includes emotional distress damages and punitive damages.
We all know the maxim that “bad facts make bad law.” Two years after J.R. Marketing, LLC prevailed in the Court of Appeal concerning its dispute with its commercial general liability insurer, Hartford, it ran out of luck before the California Supreme Court in its fight over important Cumis counsel issues. Hartford Cas. Ins. Co. v. J.R. Marketing, LLC, 190 Cal. Rptr. 3d 599, 2015 DJDAR 9111 (Cal. Aug. 10, 2015). This is a must read for every lawyer in California that acts as Cumis counsel.