In the September 8, 2016 edition of the Los Angeles Daily Journal, Robert McKennon of the McKennon Law Group published an article regarding the use of so-called “independent” physicians used by insurance companies as a pretense to deny valid claims. In the article entitled “9th: ‘Independent’ Physicians may Favor Insurers,” Mr. McKennon summarized the recent U.S. Court of Appeals for the Ninth Circuit case, Demer v. IBM Corporation LTD Pan, 2016 DJDAR 8929 (9th Cir. Aug. 29, 2016), in which the Court noted that insurance companies frequently pay doctors a substantial amount of money to review files, and therefore their opinions are likely biased in favor of the insurance company that pays them.
The article is posted below with the permission of the Los Angeles Daily Journal.
ERISA Penalties: When Can Plan Administrators Be Fined for Failing to Timely Produce the Administrative Record?August 16, 2016 McKennon Law Group PC
When insurance companies deny long-term or short-term disability, life or health insurance claims, it is vital that the plan participants and their beneficiaries be able to receive the claim file (also known as the Administrative Record) and ERISA Plan documents so that they can review them and challenge these claim denials. It is therefore not surprising that ERISA Plan administrators are required to comply with certain claims procedures and requests for information from plan participants, otherwise, under ERISA, they could be fined up to $100 per day for each day they fail to comply. Pursuant to 29 U.S.C. § 1332(c)(1), a plan administrator:
When is a Group Long-Term Disability Insurance Plan Not an ERISA Plan? When it’s Established and Maintained by a Church to Qualify as an ERISA-exempt Church Plan – That’s WhenAugust 15, 2016 McKennon Law Group PC
You know church can be very good for you, but you probably never contemplated that church could help you in ways other than spiritually. Let’s say you find yourself in this position: you become disabled, work for a church-related employer and now want to make a disability claim under your short-term disability and/or long-term disability insurance policy. You wonder: is my claim covered by ERISA or will I have those really good state law remedies because ERISA does not apply? Your question was recently answered by the Ninth Circuit Court of Appeals, albeit in a pension plan case.
How do disability benefits from Social Security, the State or from Workers’ Compensation affect your claim?August 02, 2016 McKennon Law Group PC
Most group long-term disability policies and employer-sponsored long-term disability plans include a provision called “Offsets,” “Other Income Benefits,” “Income Which Will Reduce Your Disability Benefit,” “Deductible Sources of Income” or a similar name. These provisions allow the insurer to reduce the monthly disability benefit that you would otherwise receive under the disability insurance policy by the amount of the “other income” paid to you during the same time period. Each policy is different, but the insurer is usually allowed to reduce your monthly disability benefit by the following types of “other income” you receive: (1) Social Security disability benefits; (2) California State disability benefits; (3) disability benefits paid under Workers’ Compensation laws; (4) retirement plan benefits funded by the employer that issued the group policy; (5) unemployment compensation; (6) amounts received in a personal injury lawsuit settlement or judgment for loss of earnings; and (7) amounts received as sick leave, salary continuation, vacation pay and personal time off.
Ninth Circuit Affirms Rule that Ambiguous Policy Terms Must Be Construed Against Insurer in ERISA Disability Insurance CasesJuly 06, 2016 McKennon Law Group PC
The “reasonable expectations of the insured” doctrine has been around for decades in California. The state Supreme Court started toying with rules that became its foundation after the turn of the century. See Pac. Heating & Ventilating Co. v. Williamsburgh City Fire Ins. Co., 158 Cal. 367, 370 (1910) (“any ambiguity … must be resolved in favor of the insured”).
When and under what circumstances an insurer paying long-term disability benefits may collect retroactive benefits paid to an ERISA plan participant under the Social Security Act has been the source of conflicting opinions over the years. The most recent pronouncement: a long-term disability plan administrators must “specifically identify a particular fund” from which it will be reimbursed in order to seek to recover of alleged overpayment of disability benefits. So held the Southern District of California in its recent plaintiff-friendly decision in Wong v. Aetna Life Insurance Company, 2014 U.S. Dist. LEXIS 135661 (S.D. Cal. 2014). Through its decision in Wong, the district court reaffirmed that simply because an ERISA governed long-term disability plan’s language provides for recovery of an award of back-dated SSDI benefits does not mean that an insurance company may seek reimbursement from an insured’s general assets. Instead, the onus is on the insurer to specifically identify specific funds, separate from a plan participant’s general assets, on which it may place an attachment.
Department of Labor Proposes New, Claimant-Friendly ERISA Regulations for Disability Insurance ClaimsDecember 10, 2015 Scott Calvert
From time to time, the U.S. Department of Labor promulgates new regulations governing disability insurance benefit claims and health insurance benefit claims that are governed by the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA. The regulations must be followed by plan administrators and claim administrators when reviewing disability insurance and health insurance benefit claims submitted by claimants. Recently, the Department of Labor proposed changes to the regulations governing long-term disability insurance benefit claims and short-term disability insurance benefit claims.
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.
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.
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.