The post Federal District Court Grants Partial Summary Judgment Under the Voluntary Payment Doctrine to Our Client, Allowing Her to Keep Over $1 Million Mistakenly Paid to Her appeared first on McKennon Law Group.
]]>AIG paid Ms. Le the proceeds from another person’s $1 million life insurance policy and then filed an aggressive complaint against her to recover the money, even though Ms. Le had accurately submitted all requested information from AIG, and had quit her job and spent a substantial portion of the money by the time she was served.
As we discovered in the ensuing litigation, the correct beneficiary shared the same first and last name and date of birth as Ms. Le’s late husband. However, nothing else matched – the Social Security numbers for the correct policyholder and beneficiary were different from Ms. Le and her late husband; Ms. Le had different first and middle names from the correct beneficiary; the correct policy holder had a different middle name from Ms. Le’s late husband; the contact information on file was in a state where Ms. Le and her husband had never lived; and Ms. Le’s date of birth was different from the correct beneficiary’s date of birth. During the claim review process, Ms. Le even asked for a copy of the policy – which would have informed her that she was not, in fact, the correct beneficiary – but AIG refused to provide it to her.
After filing counterclaims for Ms. Le’s 18-plus months of lost wages and significant emotional damages, we ultimately moved for partial summary judgment seeking a ruling that Ms. Le was entitled to retain the $1 million she was paid under the voluntary payment doctrine defense.
The voluntary payment doctrine is an affirmative defense that bars a plaintiff from bringing an action to recover funds mistakenly paid if the payment was “voluntarily made with knowledge of the facts.” Here, AIG had knowledge of all of the relevant facts, as Ms. Le readily and accurately supplied all requested information. Moreover, the AIG claims representative who was primarily responsible for the egregious error honestly admitted (to her credit) that she did, in fact, review a number of claims documents whereby she should have been able to discover that Ms. Le was not the true beneficiary, but she failed to notice a number of significant discrepancies that should have made it clear to her that she was not the correct beneficiary.
The judge granted partial summary judgment in Ms. Le’s favor, affirming that AIG’s payment to Ms. Le was made with no “mistake of fact,” thereby absolving her of any liability to return the funds.
This is a case of first impression in California, as most insurance companies unsurprisingly have safeguards in place to prevent reckless conduct like that which occurred here. Significantly, the court cited the voluntary payment doctrine cases from the Seventh Circuit Court of Appeals that we cited in our pleadings with approval, making it easier for future litigants in California to prevail under similar circumstances.
Ms. Le is now able to keep the money she was recklessly paid by AIG, for which she is extremely grateful to McKennon Law Group PC.
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]]>The post Western Kentucky District Court Reviews Long-Term Disability Denial Under De Novo Standard of Review Despite Discretionary Policy Language Where the Denial Decision Was Made by a Third Party appeared first on McKennon Law Group.
]]>When a disability insurance policy contains language permitting the plan administrator to use discretion in interpreting the plan’s terms and deciding whether to approve or deny a claim for benefits, typically a court will determine the outcome of the case by deciding whether the administrator abused its discretion in denying a claim. Alternatively, where a policy does not grant discretion to the administrator, the court will review the decision de novo, which means the court reviews the evidence and decides whether the plaintiff is disabled under the policy without giving any deference to the plan administrator’s denial. In Smith, a third party reviewed and denied the plaintiff’s claim. The court found that despite the policy language granting the plan administrator discretion, the plan administrator had not actually exercised any discretion, but instead had contracted out to the third party, Matrix Absence Management, Inc., to interpret the plan and deny the plaintiff’s LTD claim and the third party “exercised ultimate decision-making responsibility for the policy determination.” The court cannot determine whether the plan administrator abused its discretion if the plan administrator did not exercise discretion. Therefore, the court held that it could review the LTD claims determination de novo. The court explained that:
Reliance Standard responds to [to the argument that it did in fact exercise discretion in denying the claim] by pointing out that the April 26, 2021 letter is written to Smith from Reliance Standard. [] Although that letter is on Reliance Standard letterhead, it is signed by Norden, and it does not change the fact that Norden was employed by Matrix and exercised ultimate decision-making responsibility for the policy determination. []. This alone is sufficient to show that Reliance Standard—although the policy clearly vested it with discretionary authority—did not actually exercise that discretionary authority itself. As a result, the Court must review the claims determination de novo. See, e.g., Davidson v. Liberty Mut. De novo. Co., 998 F. Supp. 1, 9 (D. Me. 1998) (applying de novo review where “[No portion] of the LTD plan … expressly permits delegation of the duties of the plan administrator” and “the Court cannot assume that the LTD plan permitted delegation of the duties of the plan administrator[.]”); Belheimer v. Fed. Express Corp. Long Term Disability Plan, 2012 U.S. Dist. LEXIS 168882, at *20 (D.S.C. De novo. 28, 2012) (“[A]s Federal Express delegated its final decision-making authority to Aetna, and the LTD Plan did not contemplate or authorize such a delegation, this Court will review the decision to deny Plaintiff’s long-term disability benefits claim de novo.”).
Id. at *4.
For a plaintiff, overcoming an abuse of discretion standard is usually more difficult than the court determining as a first impression whether the evidence favors the plaintiff’s disability claim under the de novo standard of review. Thus, for the court in Smith to review the LTD denial de novo rather than using an abuse of discretion standard could well have been the difference between receiving LTD benefits and the court upholding the denial. The court’s decision to review the LTD denial de novo was therefore a significant victory for the plaintiff.
Aside from having her LTD benefits reinstated, the court’s decision also meant that the plaintiff had achieved success on the merits. Had the court decided the case using an abuse of discretion standard, the plaintiff may not have succeeded on the merits and therefore would not have been given leave to request attorney’s fees. Because the court overturned the denial of LTD benefits and approved LTD claim, it gave the plaintiff the ability to recover significant attorney’s fees possibly based on the distinction between the plan administrator making a claims decision itself on one hand or contracting out with a third party on the other. This nuance illustrates the need for knowledgeable, experienced counsel when challenging an insurance company’s claim denial. Finding experienced ERISA disability insurance attorneys to handle your denied disability insurance claim is critical. The attorneys at McKennon Law Group PC have been immensely successful handling matters like Smith involving complex nuance.
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]]>The post Oregon District Court Holds Long-Term Disability Insurer to Strict ERISA Appeal Deadline; Finds No Special Circumstances for Request to Extend Appeal and Finds Claim Deemed Denied appeared first on McKennon Law Group.
]]>For disability plans, the claims regulations that govern ERISA allow a claimant to consider his administrative remedies to be exhausted if the plan violates its requirements. A plan generally has 45 days to issue a decision of a claimant’s appeal; it may take up to an additional 45 days, but it must provide plaintiff with written notice of the extension before the expiration of the 45-day period, and the extension must be warranted by “special circumstances.” In Witt, plaintiff had faxed his appeal, then also mailed it, so ReedGroup received it once by fax, then again in the mail several days later. ReedGroup acknowledged that it had received the earlier, faxed copy of the appeal. ReedGroup then sent plaintiff a letter stating that it required additional time to issue a decision because the medical reviews had to be corrected based on the Plan provisions for medical evidence. ReedGroup sent the letter after 45 days had passed since plaintiff’s faxed appeal but less than 45 days since it received the mailed appeal.
The Plan argued that because 45 days had not passed since it received plaintiff’s mailed appeal, its notice to plaintiff that it needed additional time to issue a decision did not violate the ERISA requirement. However, that argument failed because ReedGroup had previously acknowledged receipt of the earlier faxed appeal.
The Plan relied on Peck v. Aetna Life Insurance Company, 495 F.Supp.2d 271 (D. Conn. 2007), for the proposition that submission of additional materials to support an appeal tolls the appeal decision deadline. The court found the case distinguishable as it found that the defendant plan administrator’s request for an extension of time was a “special circumstance” because it requested the extension after plaintiff submitted additional materials that the plan had requested. Id. at 276-77. Although the appeal deadline may be tolled when an extension is requested “due to a claimant’s failure to submit information necessary to decide the claim,” or when a plan administrator requests additional information, that was not the case in Witt. 29 C.F.R. § 2560.503-1(i)(4). ReedGroup never requested additional information from plaintiff, nor did ReedGroup indicate that it needed the extension because plaintiff failed to submit necessary information. Plaintiff’s appeal was effectuated on May 25, 2023, making the 45-day determination deadline July 10, 2023. In turn, ReedGroup’s July 12, 2023 extension request was not timely. Therefore, the court concluded that ReedGroup committed a procedural violation by requesting an extension after the 45-day deadline to issue a determination had passed.
The Plan argued that there were “special circumstances” present because it needed time to correct the medical reports it had received. The court reviewed numerous cases and determined that there were no “special circumstances” present because medical reviews occur in almost all disability cases and ReedGroup engaged in a 29-day delay to initiate the medical review. ReedGroup itself had created its need for more time to decide on plaintiff’s appeal and therefore, its need for more time did not meet the statute’s requirement of being warranted by “special circumstances.”
Next, the Plan argued that while it had waited longer than 45 days to send written notice to plaintiff of its need for more time, it was only two days and therefore was a de minimus violation of the claims regulations that should not impact plaintiff’s requirement to exhaust administrative remedies. The Plan also argued that it was required by ERISA to issue a decision on the proper evidence, so it needed to be sure that the medical records were correct. The court noted that 29 C.F.R. § 2560.503-1(l)(2)(ii) states that de minimis violations that do not prejudice or harm the claimant will not deem administrative remedies exhausted so long as the plan demonstrates that the violation was for good cause or due to matters beyond the control of the plan. The court explained that:
Read as a whole, this sentence indicates that, even if a violation does not prejudice or harm a claimant, the de minimis exception does not apply unless the plan demonstrates that the violation was for good cause or due to matters beyond its control.
Witt can serve as a reminder to insurers that ERISA time requirements are to be taken seriously and they may not get away with simply coming up with any feasible reason for extending the time it takes to issue an appeal decision on an LTD claim. For claimants and their attorneys, Witt is a reminder to be diligent and closely examine the insurer’s actions and motivations for an extension. In this case, diligence paid off and plaintiff’s case moved forward more quickly and efficiently than it otherwise might have. McKennon Law Group PC has made similar arguments in numerous disability and accidental death insurance cases to the great benefit of its clients.
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]]>The post What Is Life Insurance Contestability Under California Law and Why Is It Important to You? appeared first on McKennon Law Group.
]]>When you buy life insurance, you almost certainly expect that the policy will pay benefits when the insured person passes away. Life insurance can be a valuable way for people to give themselves and their loved ones’ peace of mind, knowing that there will be a death benefit to cover the costs associated with burial or to provide for dependents.
Many people who purchase life insurance do not expect the insurance company to deny a death benefit claim in bad faith. The reality is that life insurers will go to great lengths to avoid paying benefits. Assuming the policy requirements have been met, i.e., the premiums have been paid and the insured has passed away, the insurance company will need to find another way to avoid paying benefits. One of the most important ways life insurers can do this is to contest the policy in an attempt to rescind it, effectively treating it like it never existed in the first place.
Contestability refers to an insurance company’s ability to invalidate, or rescind, a life insurance policy and refuse to pay the death benefit. The law provides a window during which life insurance companies can choose to rescind a policy under certain circumstances.
Note that rescinding a policy under this provision is not the same as canceling a policy for lack of premium payment. There is no set timeline for policy cancellations due to missed premium payments. If your life insurance is set up so that you pay a monthly premium for it, the insurance company may cancel your policy if you miss paying premiums, regardless of how long you have had the policy.
It may seem surprising that an insurance company can rescind a policy if someone has paid all their premium payments on time. However, the contestability period is necessary for insurance companies to protect themselves against potential fraud.
Typically, when you buy life insurance, you must answer several questions about yourself, including about your age, lifestyle, and overall health and medical history. For example, you will likely be asked whether you smoke or not or if you have had any major health issues in the last five or ten years. Depending on the type and amount of life insurance you are seeking, you may even be required to undergo a basic medical exam.
Insurance companies use this information to calculate the risk you present, so the insurer can decide whether to insure you, what type of policy and benefit to offer, and how much to charge for premiums. The insurance company relies on the information you provide being accurate to properly calculate this risk.
If you misrepresent information on your application, purposefully or even by mistake, the insurance company may have based its assumptions on your risk on incorrect information. The contestability period allows insurance companies to investigate a policy claim after a death has occurred to ensure that all information provided is accurate before they pay out a claim. Insurers are looking for any misrepresentations on the policy application that may be material to the risk they insured so they can deny your life insurance claim and rescind your policy.
Under California law (California Insurance Code section 10113.5), all life insurance policies delivered or issued in California must contain a provision that states the contestability period is no more than two years. While you might find a policy that states a shorter period, most insurance companies will want to include the maximum two-year contestability period.
Suppose someone purchases a life insurance policy and passes away within the two-year contestability period. In that case, the insurance company has a right to investigate the matter further to determine if there was a material misrepresentation in the application.
This does not mean that the insurer will not ultimately pay out death benefits. If there are no problems with the application information and the death occurred as a result of a covered event, the insurance policy should pay out as expected. There simply might be a delay before the benefits are received.
If the insurance company decides to rescind the policy due to an investigation for any matter during the contestability period—whether or not the policyholder has passed away—it must explain why it is attempting to rescind the policy. The insurance company typically also refunds the premium payments.
Yes, you can sue an insurance company if it refuses to pay out benefits and does not provide a valid reason for rescinding a policy or denying your life insurance claim. If, for example, an insurance company claims that you or the insured committed fraud by lying on the application, you may be able to argue that there was no fraud on the application and everything was true at the time.
Consider a hypothetical case where someone completes a life insurance application because they are not feeling well or have orthopoedic problems and this has made them think about the importance of planning for the future by buying life insurance. However, other than feeling sick or having orthopoedic problems, the person has not seen a medical provider for these conditions and has not been diagnosed at the time they complete the insurance application. Is the insured expected to provide this information on the application?
What happens if the person goes to the doctor a few weeks or months later completing an application and discovers they have cancer? If the insurance company reviews the case and sees how close all these events were to the application date, they might attempt to rescind the policy and claim the person knew they had cancer and did not include it on the application.
In these types of cases—and many others—the insurance company might be acting in bad faith. There are many defenses under California law to an attempt by a life insurer to rescind a policy. Only a very experience claim denial life insurance attorney can give you guidance as to whether an insurer has properly denied your claim and if that insurer committed the tort of insurance bad faith.
To find out if you have a case against an insurance company for bad faith life insurance practices, call the McKennon Law Group PC at 949-504-5381 for a free consultation.
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]]>The post Robert J. McKennon Recognized as 2024 “Super Lawyer” appeared first on McKennon Law Group.
]]>McKennon Law Group PC is proud to announce that its founding shareholder Robert J. McKennon has been recognized as one of Southern California’s “Super Lawyers” in insurance coverage for 2024, and appears in the 2024 edition of Southern California Super Lawyers magazine published today. Mr. McKennon has received this designation every year since 2011.
Each year, Super Lawyers magazine, which is published in all 50 states and reaches more than 14 million readers, names attorneys in each state who attain a high degree of peer recognition and professional achievement. The Super Lawyer designation, the most prestigious award to be given to lawyers, is given to less than 5% of lawyers nationally after being nominated and voted on by their peers.
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]]>The post South Coast Specialty Surgery Center, Inc. v. Blue Cross of California, DBA Anthem Blue Cross appeared first on McKennon Law Group.
]]>The Ninth Circuit Court of Appeals in S. Coast Specialty Surgery Ctr. v. Blue Cross of Cal., __ F. 4th __, 2024 WL 105317 (9th Cir. Jan. 10, 2024) (Before Circuit Judges Graber, Mendoza, Jr., and Desai), recently clarified a longtime standing issue in the law that a healthcare provider may sue an insurance company under ERISA to recover from the insurance company benefits that otherwise might otherwise be recoverable only by the patient. South Coast Specialty Surgery Center, Inc. (“South Coast”) brought an ERISA action against Blue Cross of California dba Anthem Blue Cross (“Blue Cross”) to recover benefits on behalf of patients who had been treated by South Coast and who had assigned their benefits to South Coast. The district court dismissed South Coast’s lawsuit on the basis that South Coast lacked authority to bring an ERISA action, as South Coast was neither a beneficiary nor a plan participant. The district court construed this assignment as giving South Coast the right to receive direct payment from Blue Cross but not the right to sue for nonpayment of benefits.
South Coast appealed the dismissal of its suit and argued to the Ninth Circuit that because each of its patients, who were beneficiaries, had signed an Assignment of Benefits agreeing to allow South Coast to receive benefits from Blue Cross, the patients had effectively assigned their right to sue under ERISA to South Coast. The Ninth Circuit had little trouble holding that South Coast’s patients had validly assigned their right to benefits to South Coast, and that such an assignment included the right to sue for nonpayment of benefits.
The Ninth Circuit’s reasoning was based partly on ERISA’s stated purpose of effectuating “a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans.” Concluding that South Coast had no authority to sue despite its patients having assigned it their rights to receive benefits would leave South Coast with no legal recourse after essentially “fronting” the costs of its patients’ care. The court noted that not allowing South Coast to sue “stymies Congress’s purpose in enacting ERISA.” The court concluded that: “[c]onstruing an assignment of benefits as including the right to sue for non-payment thus increases patient access to healthcare and transfers any responsibility of litigating unpaid claims to the provider-an entity that is much better positioned to pursue those claims in the first place.” A nice place to end the decision and begin the year. Therefore, so long as an ERISA beneficiary has validly assigned his right to receive benefits, the provider to which he assigned that right also has the right to bring an ERISA action against the insurer for nonpayment of benefits.
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]]>The post McKennon Law Group PC Wins Significant Victory in Ninth Circuit Court of Appeals for Employee Disability Benefits appeared first on McKennon Law Group.
]]>The case, Kayle Flores v. Life Insurance Company of North America, No. 22-55779, 2024 WL 222265 (9th Cir. Jan. 22, 2024), involved a claimant who had short-term disability (“STD”) and long-term disability (“LTD”) coverage through her employer. She was denied STD benefits and brought suit in federal court. The claimant also sought LTD benefits, even though she had never submitted an LTD claim. The district court agreed that the insurance company incorrectly denied STD benefits but also held that the claimant was not entitled to LTD benefits because she did not file an LTD claim.
The claimant then filed an LTD claim with the insurer which was also denied. She brought a second lawsuit and the insurer moved to dismiss the case on the grounds that the question of eligibility for LTD benefits was already decided and could not be relitigated. The district court agreed and dismissed the case because of the res judicata/claim preclusion doctrine.
The claimant appealed and the Ninth Circuit reversed the dismissal. The Court concluded that the claimant’s cause of action for LTD benefits did not accrue until she submitted an LTD claim and received the denial from the insurance company. Since the LTD denial came after her first lawsuit, the question of eligibility for LTD benefits could not have been litigated in the first case.
“We are very pleased with the Ninth Circuit’s decision in this case,” said Robert McKennon, founding shareholder of McKennon Law Group PC and attorney for the plaintiff. “The decision was correct from both an equitable and legal perspective. Our client will now be able to pursue the LTD benefits that she desperately needs, and we look forward to continuing our fight against the insurance company.”
This decision is significant because the issue of res judicata/claim preclusion in this situation had never been addressed in the history of U.S. jurisprudence and substantially protects employee benefits to ensure technical legal doctrines do not deprive them of their much needed employee benefits.
Attorneys Robert McKennan and Joseph Hoff represent the plaintiff, Kayle Flores.
McKennon Law Group has over 70 years of experience specializing in long-term disability and short-term disability insurance, life insurance, health insurance, accidental death insurance, and long-term care claims, as well as all types of ERISA litigation claims involving employee benefits, including group insurance claims, pension claims and severance claims.
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]]>The post What Is a Breach of Fiduciary Duty Claim Under ERISA? appeared first on McKennon Law Group.
]]>ERISA is an acronym for the Employee Retirement Income Security Act of 1974. It is federal legislation that originally became law in 1974. The main goal of ERISA is to provide protection for individuals who receive employer-sponsored insurance and retirement employee benefits.
One specific goal is to help ensure that employees of private employers will have the insurance benefits when they need them and the retirement income they expect when they retire. Such benefits typically include disability insurance, life insurance, health insurance, accidental death insurance, and pension benefits. To that end, ERISA sets forth numerous fiduciary duties owed by ERISA plan fiduciaries.
The fiduciary responsibilities under ERISA include managing plans with the interests of beneficiaries and participants first and foremost. Trustees, plan administrators, insurance companies and other fiduciaries involved in making claim decisions or managing assets under an ERISA plan cannot make decisions that place the interests of the employer or themselves before the plan participants or their beneficiaries. Some examples of specific requirements include:
Anyone who is involved in managing the funds or who makes claims decisions with respect to the plan benefits related to employer-sponsored benefits plans will act in a fiduciary role. Under ERISA, individuals are fiduciaries if any of the following are true:
Sometimes there are signs of a fiduciary breach, such as someone refusing to follow through on your requests or your benefits payments not being paid. However, that is not always the case, so it is important to review your retirement account statements regularly and look for any potential irregularities and it is important to critically review claim denials for benefits payable under a plan.
Some examples of signs that fiduciary duty might have been breached include:
The term fiduciary means to involve a high level of trust. Often, fiduciary relationships exist when there are financial matters at stake and there are parties that manage the finances on behalf of and for the benefit of others. For example, if you create a conservatorship and have a trustee manage it on behalf of a disabled individual, the trustee has a fiduciary duty to manage the assets for the benefit of that person.
ERISA creates a fiduciary relationship between pensioned employees and others with employer-sponsored benefits and the entities that operate those plans and make discretionary decisions regarding those plans. If the insurance companies or plan administrators involved act in bad faith or otherwise breach their fiduciary duties, employees and plan participants may have options for seeking compensation for any related losses. Working with an experienced ERISA lawyer can help you understand your rights and what options you have for enforcing them.
If you believe that you are the victim of a fiduciary breach of duty related to an ERISA-covered plan, there may be remedies available to you. You can pursue an ERISA appeal and/or file an ERISA lawsuit that may help you recover any losses related to the breach. Fiduciaries who breach their duties can be required to make good on any losses contemplated by the ERISA plan.
Start by reaching out to an experienced ERISA legal team. Provide them with as many details as possible so they can evaluate your case and help you understand if you have cause for a lawsuit. You may want to begin collecting documentation and information as soon as you believe a breach of duty is possible. Some information you might want to gather includes copies of investment and benefits statements related to your plan, claim denial letters, your claim forms and appeal letters, your plan documents, your claim file/administrative record, all communications between you and the insurer/ERISA fiduciary and any notes you can make about the signs you have noticed.
For help fighting for your ERISA benefits, call McKennon Law Group PC. Call us at 949-504-5381 to find out more about how we can help with your ERISA claims, including your breach of fiduciary duty claim.
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]]>The post California Appellate Court Rules that a Cause of Action Does Not Accrue Until All Elements of the Claim Have Been Satisfied, Including Damages appeared first on McKennon Law Group.
]]>Ohio National approved Bennett’s claim and paid his benefits. Ohio National then sent Bennett a letter in June 2015 informing him that it had determined that his disabling condition was due to degenerative disc disease and was therefore caused by sickness rather than injury. As such, his benefits would not be paid for life, but would cease when he reached age 65 in September 2018. Several times between June 2015 and September 2018, Ohio National requested that Bennett complete statements and provide physician’s statements certifying his disability. In April 2019, Ohio National informed Bennett that its decision was unchanged and he would not receive benefits beyond September 2018.
On August 13, 2019, Bennett sued for breach of contract and breach of the implied covenant of good faith and fair dealing. The trial court granted summary judgment to Ohio National after concluding the claims were barred by the statutes of limitation — four years for breach of contract and two years for breach of the implied covenant of good faith and fair dealing. Both causes of action, the court concluded, accrued when Ohio National issued an unconditional denial of liability on June 8, 2015, not when benefits ceased on September 3, 2018.
Bennett appealed to the Court of Appeal and argued that the trial court erred because the elements of his claims were not complete until he suffered actual damages when his benefits ceased in September 2018.
The Court of Appeals reversed and concluded that the elements of Bennett’s causes of action were not complete until September 2018 when Ohio National ceased making its monthly disability payments. The court relied on Thompson v. Canyon, 198 Cal.App.4th 594, 604 (2011) (“ ‘when the wrongful act does not result in immediate damage, “the cause of action does not accrue prior to the maturation of perceptible harm” ‘ “). For Bennett, the difference between his benefits ending at age 65 on one hand and continuing for life on the other hand was substantial and surely made a significant difference for him.
The takeaway from Bennett is to understand that a cause of action does not accrue until all the elements are satisfied. Therefore, damages are an element in a cause of action, the statute of limitations does not begin to run until actual damages are sustained. Had Ohio National informed Bennett that his benefits were going to cease at age 65, then continued paying his benefits beyond age 65, Bennett would not have a ripe cause of action because he would not have yet sustained actual damages.
If you have a disability claim and have been told that your benefits will end at a given time, it is important to understand that if you intend to bring a cause of action against the insurer, your cause of action for breach of contract will not accrue until you suffer damages, typically when the insurer ceases paying benefits. Understanding the disability policy’s internal contractual limitations clause and the applicable statute of limitations is important to make sure you maintain a viable claim. One way to ensure that you understand whether you have a valid California cause of action against an insurance company is to have your matter reviewed by knowledgeable and experienced disability insurance attorneys, like the lawyers at McKennon Law Group PC.
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]]>The post Why Are Long-Term Care Policies Important and What Do They Cover? appeared first on McKennon Law Group.
]]>Most people are familiar with various types of insurance, such as auto, life, and homeowners or renters insurance. However, many are not familiar with long-term care insurance. Long-term care insurance can be very beneficial for you as you age and may need additional care.
It is important to understand what this type of coverage is, what it covers, and how to hold your plan responsible for covering care as agreed, as with any insurance coverage. These things may be especially important to understand in the context of long-term care insurance given the manner in which insurance companies issued long-term care policies in the 1990s and 2000s that they are now struggling with, as explained here [LINK TO
Long-term care insurance pays for long-term care, typically in health care facilities, not covered by your other insurance policies. Traditional disability and health insurance policies have limits and do not always cover the care you may need, for example, if you have a chronic condition or serious injury that prevents you from performing your activities of daily living. Long-term care insurance can cover things such as in-home care or staying in an assisted living facility.
One reason people buy long-term care coverage, as with other types of insurance, is for peace of mind. Purchasing long-term care coverage will likely instill a sense of confidence that you will have access to care in the future, if and when you need it. This can be especially helpful for those in or approaching old age, as the aging process makes long-term care needs more likely.
Another reason people buy long-term care insurance is to protect their future assets. The type of care you might require as you age, especially if you have a chronic health condition and need regular care, will likely be costly. For example, without long-term care coverage, you may pay out-of-pocket costs of $100,000 – $200,000 or more in a year for long-term care that you need.
If you unexpectedly have to pay for in-home care, assisted living facility services, or other long-term care options, you may have to dip into your retirement funds, which can require you to completely alter your finances and retirement plan. These expenses can also decimate other savings or cause you to have to sell off assets to pay for care — all of which reduce your quality of life and your ability to pass assets to loved ones in the future. Long-term care insurance that reduces your out-of-pocket costs for care can mitigate these concerns.
As with almost any type of insurance, there are different types of long-term care insurance. Some policies only cover care in a specific place, such as your home or a qualified nursing home or assisted living facility. Others limit coverage by care, type of service, or by the length of time it pays benefits.
You may be able to purchase a long-term care policy that offers a per diem amount to cover whatever care you need or, you might opt for a policy that only covers certain services based on what you think will be the most likely solutions you may need later in life.
One popular option is comprehensive coverage, which provides a daily benefit that you can use in multiple settings, so you have the flexibility to meet changing care needs.
A comprehensive long-term care policy may help pay for medical and care services provided in your home, an adult day care center, an assisted living facility, a hospice or respite facility; and in a nursing home. The services covered will partially depend on where the coverage is being used. For example, you might have a plan that covers skilled nursing services, help with personal care, and a variety of therapies, but only as long as they are provided in your home. This is because these in-home services may not be covered by other insurance types. However, the same plan may only cover personal care services in a nursing home setting because skilled nursing services and options like physical therapy are typically covered by Medicare, Medicaid, and other payers when they occur in a nursing home setting.
Aside from medical, clinical, and wellness services, long-term care policies may also cover other assistance such as housekeeping and cooking. However, it is important to understand that such services likely need to be provided in coordination with other services covered by your policy.
Under most policies, to be covered, you must be unable to perform certain activities of daily living. A common insuring provision provides coverage if the insured is “unable to perform, without substantial assistance, at least two activities of daily living.” Substantial assistance means “the physical assistance of another person without which you would not be able to perform an activity of daily living.” Policies often then list the relevant activities of daily living as:
The cost of long-term care insurance depends on a variety of factors, including your age and health when you purchase it. As with many other insurance types, buying a plan early when you do not need it often saves you money.
Other factors in the cost of long-term care insurance relate to the benefits you select, such as how much your daily benefit for in-home care will be or how much you will receive while in an assisted living facility, and how long you may receive such benefits. For instance, a policy that pays a high daily amount for up to five total years will be more expensive than a policy that pays a lower daily amount for up to two total years.
The insurance companies that provide long-term care policies are for-profit businesses, so they have profit margins to attend to, stakeholders to satisfy, and many other concerns that have little to do with approving or paying your claims. Therefore, monetary issues that have nothing to do with coverage under a policy often come into play to influence claims decision making. For example, your insurer might pay benefits that are less than you expected or it may outright deny a claim for coverage, or your benefits might be cut off before the maximum period listed in your policy.
If you are facing any of these types of issues or feel that your long-term care insurance company is not acting in good faith, you should contact a knowledgeable attorney with expertise in the area of long-term care insurance. The attorneys at the McKennon Law Group PC have the knowledge and experience to help you get the benefits to which you are entitled under your long-term care policy. Reach out to the McKennon Law Group PC for a free consultation now.
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