Ninth Circuit Grants a Small Reprieve to the Abuse of Discretion Standard of Review, Ruling That Discretionary Language Provisions in Self-Funded ERISA Will Apply

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Insurance Litigation Blog, Standard of Review August 24, 2017

When litigating ERISA-governed short-term disability, long-term disability, life and medical insurance claims, a major consideration is which “standard of review” will apply to the Court’s review of the insurer’s decision – abuse of discretion or de novo.  The de novo standard of review is more claimant friendly.  When applying the abuse of discretion standard of review, the Court is required to give some deference to the insurer’s decision.  Under the de novo standard of review, the Court does not give any deference to the insurer’s decision, but simply makes a determination as to whether available evidence establishes that the insured was disabled under the terms of the Plan.

The abuse of discretion standard of review, which is friendlier to insurers, …

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9th Circuit puts final nail in coffin for discretionary clauses in insurer-funded ERISA plans

Posted in: Abuse of Discretion, Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance, Policy Interpretation, Preemption, Standard of Review May 24, 2017

Disability and life insurers frequently include clauses in their insurance policies affording them complete discretion to decide whether a claim has merit.  The clauses usually state the insurer has total discretion to decide whether the claimant is eligible for the policy’s benefits, to decide the amount, if any, of benefits to which they are entitled, to interpret the policy’s terms how they see fit, or something similar.  Employers regularly include these same types of “discretionary clauses” in their employee welfare benefit plan documents, and if a group insurance policy is the funding source of the plan’s benefits, they then delegate that discretion to decide the merits of claims to the insurer.

Employee benefit plans and the corresponding group insurance policies …

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With Discretionary Language Even Barred in Self-Funded ERISA Plans, is This the Death of The Abuse of Discretion Standard of Review In California?

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Standard of Review October 12, 2015

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 CaliforniaA 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.…

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ERISA Disability Insurance Claimants Take Note – Discovery Is Allowed In De Novo Review Cases

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance News, ERISA, Standard of Review September 14, 2015

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 …

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ERISA Insurers’ Conclusory Medical Opinions Regarding Disability Status Will Not Carry the Day

Posted in: Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog August 20, 2015

An individual suffering from a disabling condition undoubtedly has many concerns. In addition to dealing with physical pain and emotional distress, there is always the thought of how to pay for medical bills and living expenses if the disability prevents the person from continuing work.

It can be stressful and time consuming for a disabled claimant to fight for long-term disability benefits (“LTD”) provided under an ERISA-governed employee benefit plan. However, a recent District Court case, Carrier v. Aetna Life Insurance Company, 2015 WL 4511620 (C.D. Cal. July 24, 2015), may help insureds by making it more difficult for insurance companies/claim administrators to summarily deny an insured’s claim without proof of specific findings and details as to how and …

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Court Confirms that Medication Side Effects Can Support a Disability Insurance Claim

Posted in: De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog June 29, 2015

When a person suffers from a disability caused by an injury or sickness, the resulting restrictions and limitations, be they physical or mental, can have a devastating impact on that person’s ability to return to work. What is often overlooked, is that the side effects of the medication prescribed to treat a medical condition can themselves also impede a person’s ability to perform in the work place, thus resulting in a long-term disability. Recently, Central District of California Federal Court Judge Percy Anderson, in Hertan v. Unum Life Insurance Company of America, 2015 WL 363244 (C.D. Cal. June 9, 2015), ruled that a long-term disability insurer had to consider how the side effects of an insured’s medication impacted her cognitive …

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Insurers Do Not 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 Litigation 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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Employees Must Follow ERISA Plan Documents in Designating Retirement Plan Beneficiaries or Risk Losing Critical Rights

Posted in: Case Updates, De Novo Review, ERISA February 09, 2015

Have you properly designated your intended beneficiaries for your retirement plan at work?  What about for your savings plan, life insurance policy or other employee benefit plans you have through your employer?  If you have not, the impact could be dire and life-changing for your loved ones after you pass.  Make sure you follow the law so your family is properly taken care of when the inevitable happens.

The Ninth Circuit Court of Appeal recently addressed these issues in Becker v. Williams, 2015 U.S. App. LEXIS 1554 (9th Cir. Jan. 28, 2015). There, a 30 year employee of Xerox Corporation died in 2011, Asa Williams, Sr.  Because Asa, Sr. did not follow through in changing his intended beneficiary with …

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In ERISA Cases, The Standard of Review Really Does Matter

Posted in: Abuse of Discretion, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog, Standard of Review December 06, 2010

The Thursday December 1, 2010 edition of the Los Angeles Daily Journal featured the article co-written by Robert J. McKennon and M. Scott Koller, entitled “In ERISA Cases, The Standard of Review Really Does Matter,” in the Perspective column. It explains why it is important to identify and appropriately utilize the Standard of Review in ERISA cases.  The article is posted below with permission of Daily Journal Corp. (2010).

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ERISA Claimant Retains Burden of Proof For Establishing Disability Under a De Novo Standard of Review

Posted in: Abuse of Discretion, Case Updates, De Novo Review, Disability Insurance, Disability Insurance News, ERISA, Insurance Litigation Blog November 01, 2010

The question of who has the burden of proof can often decide the outcome of litigation.  Given its importance, it is common to see litigants attempt to shift that burden to the opposing side in order to secure a tactical advantage.  Recently, in Muniz v. Amec Construction Management Inc., __ F.3d __, 2010 WL 4227877 (Decided October 27, 2010), the Ninth Circuit Court of Appeals addressed the question of whether the burden of proof can be shifted in an ERISA disability case.  In Muniz, a claimant diagnosed with HIV applied for benefits through his employer’s long-term disability plan (the “Plan”).  Benefits were approved and paid for the first 24 months.  However, as is common with many benefit …

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