The Basics of an ERISA Life, Health and Disability Insurance Claim – Part Three: Procedural and Practical Considerations to an ERISA Claim

In this several part Blog Series entitled The Basics of an ERISA Life, Health and Disability Insurance Claim, we discuss the basics of an ERISA life, health, accidental death and dismemberment and disability claim, from navigating a claim, handling a claim denial and through preparing a case for litigation.  In Part Three of this Series, we discuss procedural considerations to an ERISA claim, as well as deadlines and timeframes to carefully monitor.

When first reviewing a potential ERISA matter, it is crucial to first determine the procedural history of your client’s claim and whether there have been any denials.  Most denial letters in ERISA cases set forth specific deadlines to respond to an appeal.  In fact, the Department of Labor regulations specifically dictate that a claimant be advised of her appeal rights.

The federal statue governing claims procedures under ERISA requires that “in accordance with regulations of the Secretary [of Labor], every employee benefit plan shall … afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.”  29 U.S.C. § 1132(2).  The regulation implementing 29 U.S.C. § 1133 states that a “reasonable opportunity for a full and fair review” is “at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal…”  (Emphasis added.)  29 C.F.R. § 2560.503-1(h)(3), (h)(3)(i), (h)(4).  Further, in terms of calculating the 180-day deadline, courts interpreting this provision have held that if the deadline falls on a weekend, it extends to the following business day.  LeGras v. AETNA Life Ins. Co., 786 F.3d 1233, 1237-38 (9th Cir. 2015).

However, if the deadline to submit an appeal has already run, this is largely accepted as being similar to missing a statute of limitations.  If a claimant has missed the deadline to appeal, it is  known as a failure to exhaust administrative remedies.  It still may be worthwhile to ask the claim administrator to accept a late appeal or check the plan language to determine if administrative remedies be exhausted as a prerequisite to filing suit.  However, if this does not work, there still may be a way to pursue litigation against the insurer or employer to get your life, medical or disability benefits paid.  One way is to see if there is a recognized exception to the failure to exhaust administrative remedies doctrine.  One such exception is the futility doctrine.  We have discussed this previously here.

If a client has not submitted an appeal, and the deadline is quickly approaching, request an extension of time from the claims administrator.  If the extension is not granted or the claims administrator does not respond in a timely fashion, the claimant should advise the administrator in writing that he is submitting an appeal of the denial, and provide as much supportive documentation as possible under the circumstances.  After this initial appeal request is sent, gather the additional information, supportive medical records and documents and submit the appeal to the claims administrator.  Courts typically require additional evidence of disability to be considered up until the date the appeal is denied, which will likely be after the submission of additional evidence if the appeal is sent promptly.

Some plans allow for a second appeal of a denial to be submitted.  These denial deadlines are treated similarly with the first claim denials, and have similar deadlines to submit information.  Remember, the appeal process allows the client to add additional supportive evidence of disability to the Administrative Record, which often includes certification letters from treating physicians, personal statements, updated medical records, updated occupational information, etc. It is necessary to have a strong Administrative Record that includes all of the critical evidence needed to support a life, medical or disability claim before commencing litigation.  Therefore, it is important to enclose as much documentary support as may be needed in litigation, as courts may not allow you to supplement the record with evidence during litigation.

Sometimes, claimants may request attorney representation before a denial has been received.  Nervous of the unscrupulous nature of some disability insurers, many claimants are worried that one of their main (and sometimes only) income source will be improperly ended by their insurer.  Most first-party insurance policies, including life insurance, disability insurance, property insurance and liability insurance policies, require that an insured policyholder provide notice of a claim within a specified period of time, typically, “as soon as practicable,” “during the Elimination Period” or a similar formulation. See e.g. Ins. Code § 10350.7 (requirement in disability policies).  For this reason, be wary of situations where your client may not have given timely notice of their claim.  But, even where a policy specifies that timely notice is a condition precedent to coverage, a policyholder-friendly rule known as the “notice-prejudice” rule has been adopted by California courts to help subvert these provisions.  We discussed the application of that rule here.

Next, many of the same considerations for the post-denial period apply where the claimant has not yet received the denial.  The goal remains the same—obtain medical records, attending physician statements that certify your client’s disability, and submit these records to the insurer in a timely fashion.  With this, the insurer will have as much information as needed to make a favorable benefit determination.

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