Insurance Company Bias in ERISA Cases: Hartford’s History of Bias and Discovery of an Insurer’s Biased Claims Administration Process

Posted in: Abuse of Discretion, Conflict of Interest, Disability Insurance, Discovery, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance September 26, 2018

The Employee Retirement Income Security Act (“ERISA”), a 1974 federal law, sets minimum standards for many employee benefit plans and serves to provide protection for individuals in these plans.  Discovery in ERISA cases is often limited because the statute’s primary goal is to provide inexpensive and expeditious resolution to employee benefit claims.  District courts are generally limited to the administrative record unless a so-called structural conflict of interest exists.  Considering that insurers make benefit determinations on life, health and disability insurance claims and profit when an adverse decision is made, this scenario creates an inherent conflict of interest whenever an insurer administers a claim.

Courts find that a conflict of interest exists where the “entity that administers the plan, such …

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The Latest Frontier for Forum Selection Clauses: ERISA Policies

Posted in: Accidental Death or Dismemberment, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance July 26, 2018

Letters denying an insured’s claim often end by listing what steps an insured can take to challenge an unfavorable determination.  Assuming all administrative appeals have been exhausted, this generally involves filing a lawsuit. Depending on the language in the underlying insurance policy, the denial letter may state that if an insured wishes to bring suit, they must bring suit in a specific court in a particular state that could be on the other side of the country.  Clauses in contracts, such as insurance policies, that require filing suit in a particular jurisdiction are called “forum selection clauses.”

Courts often enforce forum selection clauses.  When determining whether to enforce a forum selection clause, a court will ask if the forum selection

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When Guarding the Henhouse, Some Foxes Go Rogue: When an Insurer’s Conflict of Interest Factors into Administrating Group Long-Term Disability ERISA Plans

Posted in: Abuse of Discretion, Accidental Death or Dismemberment, Conflict of Interest, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Litigation Blog, Life Insurance, News July 25, 2018

Few Americans can retire on their savings alone.  Many workers participate in an employee benefits plans, which serve to provide financial security in case of disability or retirement.  In the case of insurers that decide who qualifies for life, health and disability insurance benefits, there exists a major concern about the significant conflict of interest that exists when these insurers make these decisions and also pay for these benefits.  Will these insurers exalt their own interests of bottom line profitability over the interests of ERISA plan participants and beneficiaries who file claims for life, health and disability benefits? It is not a leap of logic that this conflict of interest results in insurance companies wrongfully denying ERISA benefit claims.

In

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Orange County Lawyer Publishes Article in July 2018 edition by Robert J. McKennon Entitled “Insurers’ Intermediaries: The Implications of Actions Taken by Agents, Employers, and Third-Party Administrators”

Posted in: Accidental Death or Dismemberment, Agent/Broker, Bad Faith, Disability Insurance, ERISA, Health Insurance, Legal Articles, Life Insurance July 13, 2018

In July 2018, The Orange County Bar Association published an article written by Robert J. McKennon and Stephanie L. Talavera of the McKennon Law Group PC in the Orange County Lawyer.  The article addresses the liability implications of the relationship between insurers and various types of intermediaries.  As the article explains, depending on the nature of the relationship between the insurer and others involved in the process, the insurer may be held liable for the actions of those who act as its intermediaries.  The article gives tips on how to make an insurer vicariously liable for the acts of those functioning as intermediaries in the insurance process.

Insurers’ Intermediaries: The Implications of Actions Taken by Agents, Employers and Third-Party Administrators

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Opportunistic Rescission: When Do Insurers Waive their Right to Rescind an Insurance Policy?

Posted in: Accidental Death or Dismemberment, Agent/Broker, Disability Insurance, Disability Insurance News, Health Insurance, Insurance Litigation Blog, Life Insurance, News, Waiver & Estoppel July 12, 2018

All too often, we see insurance companies deny insurance claims by attempting to opportunistically rescind insurance policies. This practice has become more prevalent in recent years as insurers look for ways to deny insurance claims.

Anyone who has purchased a disability, life or health insurance policy is likely familiar with the significant paperwork involved in the insurance application process. The paperwork includes policy notices, policy applications, supplemental policy applications, personal history questionnaires, policy warnings, medical examination documents, etc. These will include numerous and detailed questions relevant (and often not so relevant) to the risk being insured. An insurance agent or broker will ask questions on the policy application and often additional questions not on the application. Only after the applicant …

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Ninth Circuit Interprets the Health Parity Act in Favor of Insureds Seeking Health Insurance Benefits

Posted in: ERISA, Health Insurance, Insurance Litigation Blog, Legal Articles, News June 14, 2018

Insurance companies often attempt to provide different levels of benefits for the treatment of physical injuries and mental health issues in the same policy.  Mental health parity describes the equal treatment of mental health conditions and non-mental health conditions in insurance plans. When a plan or policy has parity, it means that if a covered person is provided unlimited doctor visits for a chronic condition like diabetes then that person must offer unlimited visits for a mental health condition, such as depression or schizophrenia.  Under federal law, health insurance plans must have parity in benefits.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 29 U.S.C. § 1185a, requires that if a plan provides …

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Los Angeles Daily Journal Publishes Small Firm Profile on the McKennon Law Group PC Entitled “Shifting Allegiance: No Longer Insurers’ Advocates, McKennon Law Group Attorneys Stand Up for Policyholders”

Posted in: Bad Faith, Breach of Contract, Disability Insurance, ERISA, Health Insurance, Insurance Bad Faith, Insurance Litigation Blog, Legal Articles, Life Insurance, Long Term Care Insurance, News, Retirement Plans May 10, 2018

In the May 7, 2018 issue of the Los Angeles Daily Journal, Daily Journal Staff Writer Melanie Brisbon authored a “small firm profile” article on the McKennon Law Group PC.  The article covers the firm’s path to success, starting with its unconventional background: several of the firm’s attorneys left established careers defending insurance companies before “shifting allegiance” to represent insureds, policyholders and claimants.  The firm started with three lawyers, including founding partner Robert J. McKennon and senior associate Scott E. Calvert.  Now, the firm consists of five attorneys and has a thriving practice in insurance litigation representing policyholders, especially involving life, health and disability insurance cases governed by insurance bad faith or ERISA.  The text portion of the profile is …

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Bad Faith Claims Handling: California Department of Insurance Investigates Aetna’s Health Claim Denials

Posted in: Bad Faith, Breach of Contract, Disability Insurance, Disability Insurance News, ERISA, Health Insurance, Insurance Bad Faith, Legal Articles February 21, 2018

On our blog, we frequently discuss the improper tactics insurers use to deny legitimate claims for life, health, disability and other forms of insurance. For our latest article on the pervasive problem in health insurance claims denials, see https://www.mslawllp.com/la-times-report-pervasive-problem-of-improper-health-insurance-denials/. Mckennon Law Group PC has had much experience litigating against health insurers who deny legitimate medical claims. We know this is a rampant problem. So, it was not shocking to us that at least one very large health insurer, Aetna, took highly improper actions to deny medical insurance claims.

On February 12, 2018, the California Department of Insurance (“CDI”) issued a press release confirming its investigation of Aetna, one of the largest health insurance providers in the U.S. California Insurance …

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LA Times Report: Pervasive Problem of Improper Health Insurance Denials

Posted in: Disability Insurance News, Health Insurance, Legal Articles February 03, 2018

After using a diabetes insulin pump for nine years, David Lazarus suddenly received a denial letter from his insurer, Blue Cross Blue Shield of Illinois. The denial letter notified Lazarus that his employer’s health plan would no longer cover the cost of his diabetes insulin pump. He was now responsible for the cost of the pump: $8,703. The reason cited for his insurer’s sudden change of heart? Lack of medical necessity. His medical insurance claim was denied.

An insurer may deny a medical insurance claim before or after the medical service sought to be covered, either through the denial of preauthorization requests or denial of claims for payment after the medical service is provided. Some insurers require preauthorization requests before …

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Plan Administrators Cannot Violate their Fiduciary Duties by Failing to Provide Proper Notice of Policy Amendments; ERISA Plan Exclusions/Limits May Not be Enforceable

Posted in: Disability Insurance, Disability Insurance News, ERISA, Group Plans, Health Insurance, Insurance Litigation Blog, News Blog September 28, 2017

Summary Plan Descriptions (“SPD”) under ERISA are required to be given to plan participants, and they provide plan participants with the most important summary of plan terms they need to know regarding their ERISA governed plans.  ERISA requires SPDs to “be written in a manner calculated to be understood by the average plan participant.”  However, plans will sometime issue numerous plan modifications which can add up quickly and require plan participants to read a series of plan modifications in addition to the original SPD in order to determine their available benefits, rights, and obligations.  To further complicate matters, benefit determinations may often be made by two separate entities.  A Plan Administrator may make an initial appeal decision, and a Plan …

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