For ERISA Disability Insurance Appeals, A Claimant Who is a Day Late May Not Be a Dollar Short

Posted in: Case Updates, Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts, Policy Interpretation June 10, 2015

Under most long-term disability insurance plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), a claimant must appeal the denial of any claim for benefits within 180 days of the denial letter. Unless the appeal is made within that strict 180-day period, the claimant may forfeit the right to any short-term disability benefits or long-term disability benefits available under the plan. At least, that was the law until a recent ruling by the United States Court of Appeals for the Ninth Circuit cracked open the window for a timely appeal.

In LeGras v. Aetna Life Insurance Company, __ F.3d __, 2015 WL 3406182, 2015 DJDAR 5798, (9th Cir. May 28, 2015), the Ninth Circuit ruled that when the 180-day deadline falls on a weekend or holiday, the claimant has until the next business day to appeal a denial decision.

After injuring himself while working for Federal Express Corporation, LeGras filed a claim for long-term disability insurance benefits under the employee welfare benefit plan administered by Aetna. After initially approving LeGras’ disability claim, on April 18, 2011, Aetna denied his claim for ongoing benefits, and informed him that he could “file a request to appeal this decision within 180 days of receipt of this notice.” That 180-day period ended on October 15, 2011, a Saturday. However, because LeGras mailed his appeal letter on the following Monday, Aetna denied the appeal as untimely.

LeGras sued Aetna for long-term disability benefits, but the district court judge granted Aetna’s motion for judgment on the pleadings, on the grounds that LeGras failed exhaust his administrative remedies because he mailed his appeal letter after the end of 180-day period. LeGras appealed the district court’s ruling.

In considering the appeal, the Ninth Circuit noted that:

LeGras faces the possibility of losing his long-term disability benefits because of a two-day difference in the computation of the time period to pursue an administrative appeal. Although the stricter time-computation method may be convenient for AETNA’s purposes, it would be contrary to the purposes of ERISA to adopt a method that is decidedly protective of plan administrators, not plan participants.

The Ninth Circuit noted that, in enacting ERISA, Congress empowered the courts to develop federal common law governing employee welfare benefits plans. The Court then noted that federal common law has developed to protect and further the interests of plan participants, such as LeGras.

Next, the Ninth Circuit explained that “[t]here is nothing novel about the principle” of extending a deadline to the next business day, when that deadline falls on a weekend or holiday. The Ninth Circuit also noted that not only have numerous courts, including the United States Supreme Court, enforced this concept, but this rule is codified in Rule 6 of the Federal Rule of Civil Procedure.

In light of this precedent, and to further the interests of claimants such as LeGras, the Ninth Circuit explained that:

Therefore, we hold that, where the deadline for an internal administrative appeal under an ERISA-governed insurance contract falls on a Saturday, Sunday, or legal holiday, the period continues to run until the next day that is not a Saturday, Sunday, or legal holiday.

With this ruling, ERISA claimants will no longer be denied the opportunity to appeal their claim for benefits when the deadline falls on a weekend or holiday, simply because they mailed their appeal on the next business day. This case highlights the importance of having competent and experienced ERISA counsel assisting claimants who are working on appeals. There are indeed many traps for the unwary.

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Insurers Do No Have Discretionary Authority, Absent Clear Language in Official Plan Documents

Posted in: Abuse of Discretion, Administrative Record, Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts, Policy Interpretation, Standard of Review April 30, 2015

In actions brought under the Employee Retirement Income Security Act of 1974 (“ERISA”), two roads diverge in federal court—and the court’s choice regarding the applicable standard of review can make all the difference in the scope of permissible evidence.  If the court applies the abuse of discretion standard of review, the court more typically (but not always) only considers evidence received by the insurer in time for its decision and limits its review to the “administrative record” to determine whether the insurer’s denial was an abuse of discretion.  Alternatively, the court may review a case “de novo,” and may consider documents not previously provided to the insurer to determine whether the insured is entitled to benefits. 

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Helpful Tips to Policyholders: Pay Close Attention to Plan's Limitations Provisions

Posted in: Case Updates, Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts, Policy Interpretation, Statute of Limitations March 06, 2014

Do you have a disability insurance policy, health insurance policy or life insurance policy through your work?  If you do, you should read this article as you may miss some important deadlines if you do not.

The Supreme Court’s recent  holding that the limitations periods in employer-sponsored plans are enforceable, even where such limitations periods began to run before a cause of action accrued, had a rippling effect through federal courts, the insurance bar and participants alike.  Under the Employee Retirement Income Security Act of 1974 (“ERISA”), participants must exhaust the plans’ administrative process before bringing suit.  Previously, the Ninth Circuit and majority of circuit court of appeals had held that the statute of limitations for filing suit under ERISA commenced after an insured exhausted all administrative remedies.  However, the high court explained that a plan may impose a particular limitations period, which begins from the date proof of claim is due, rather than after the conclusion of the administrative process.  Heimeshoff v. Hartford Life & Accident Insurance Co. et. al., 134 S. Ct. 604 (2013).  Below, we examine the implications Heimeshoff has for insureds and provide helpful tips.

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How to Read Your ERISA Disability Denial Letter: A Gritty Exploration of the Common Language in Actual Denial Letters and How to Respond to Them

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts November 25, 2013

If your ERISA short-term disability or long-term disability claim was denied, you likely received a dry, lengthy rejection letter explaining the basis for the denial.  This letter may appear persuasive, but insurers/claims administrators often offer improper justifications to support their denial decisions to increase their profits.  Calling an experienced ERISA attorney should be your next move.  However, if you decide to handle the matter yourself, then you must critically examine each basis relied upon to deny your claim.  You should never blindly accept what the insurance company is telling you.  Below is language we frequently see in our review of ERISA insurance denial letters, and tips on how to view and respond to them.

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FAQs: What do you need to know about long-term care insurance?

Posted in: Disability Insurance, Disability Insurance News, Insurance Blog, Insurance Questions and Concepts, Long Term Care Insurance August 29, 2013

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog 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.  This article in that series focuses on long-term care insurance.

What is long-term care insurance?

Long-term care insurance refers to coverage for health care and treatment in extended care facilities (for example, convalescent homes, nursing homes, etc.), at-home health care and/or adult day care for individuals (usually above the age of 65 or with a chronic or disabling condition that needs constant supervision) rather than in an acute care unit of a hospital.  See California Insurance Code § 10231.2 et seq.  Long-term care insurance is designed to pay for care that is generally not covered by health insurance, Medicare or Medicaid.

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FAQs: Should You Hire an Attorney to Help You With Your ERISA Appeal?

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts, Life Insurance July 22, 2013

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deal with frequently asked questions in the insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance and ERISA areas of the law.  This article in that series focuses on appealing a denial of your long term disability insurance claim for long term disability insurance benefits under ERISA.

The short answer is “Absolutely.”

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Ten Things to Know Before You File a Claim for Long-Term Disability Insurance Benefits

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts July 15, 2013

1.  Make Sure You Have a Complete Copy of Your Plan/Policy The first step when making a claim for long-term disability insurance benefits is to secure a copy of your policy.  If your employer provided your insurance coverage, request a full and complete copy of your policy from Human Resources.  Make sure you get a complete copy of the plan/policy, not just the Summary Plan Description.  If you purchased your policy directly from the insurance company, or through an insurance agent/broker, you probably already have a copy of your policy with the application attached.  If you cannot locate it, contact the agent/broker and/or the insurance company to request a copy of the policy.

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FAQs: Can an Insured Sue for Future Policy Benefits and Attorneys' Fees in a Lawsuit Against an Insurer for Disability Insurance Benefits?

Posted in: Disability Insurance, Disability Insurance News, ERISA, Insurance Blog, Insurance Questions and Concepts April 18, 2013

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deal with frequently asked questions in the insurance bad faith and ERISA area of the law.  This is another such article in that series.

If an insurance company has unfairly denied an insured’s disability benefits or has otherwise committed bad faith, an insured may be entitled to substantial compensation for harm that the insured has suffered.  In fact, not only may an insured seek payment of all the unpaid benefits, but the insured can also sue for future policy benefits, among other damages.

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FAQs: Who May Sue or Be Sued for Insurance Bad Faith?

Posted in: Insurance Bad Faith, Insurance Questions and Concepts May 15, 2012

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deals with frequently asked questions in the insurance bad faith and ERISA area of the law.  This is another such article in that series.

Generally, in order to sue for insurance bad faith there necessarily must be an insurance policy at issue that establishes a concept known as “privity of contract” between an insured and an insurer.  This means that an insured under an insurance policy typically may sue for bad faith if the insured is entitled to benefits under a policy and if those benefits are wrongfully withheld or payment was wrongfully delayed.  This includes the contracting parties (persons named as insureds) as well as others entitled to benefits as “additional insureds” or as express beneficiaries under the policy.  In insurance parlance, this means that the “named insured” and any “additional insureds” may sue.  For example, an auto liability insurance policy covering a vehicle may extend coverage to permissive users as additional insureds.

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