disability insurance

Examining the Rights You Have Under ERISA When Appealing a Denial of Disability Benefits

Published on: November 30, 2016 | by Matt Pulle

In an ERISA disability case, an insurance company cannot deny a claim without any explanations. Instead, under 29 U.S.C. §1133, it has to provide written notice of the “specific reasons” for the denial, and it must allow a “full and fair review” of any denial, i.e., an administrative appeal.

An important regulation from the United States Department of Labor provides some guidance on §1133. Specifically, 29 C.F.R. § 2560.503–1 (the “claims procedure regulation”) requires, in part, that any denial of a claim include the following information:

(1) The specific reason or reasons for the denial;

(2) Specific reference to pertinent plan provisions on which the denial is based;

(3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

(4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review.

The claims procedure regulation, in particular, provides notable protections for claimants: An insurance company must not only explain its reasons for denial, but also, it must inform the claimant what information or documents he or she needs to submit in order to appeal. The insurance company also cannot withhold important documents from the claimant. For example, in Hamall-Desai v. Fortis Benefits Ins. Co. (N.D. Ga. 2004), the district court held that the requirement of a “full and fair review” of a denial meant that the insurance company had to provide the claimant with copies of all the documents, records and other information it relied on in making its decision to deny the claim. The court explained that, by failing to provide this information, the insurance company prevented the claimant from preparing an adequate appeal because she could not respond to the evidence the insurance company used to support its decision.

Recent Sixth Circuit Case Interprets Phrase “Total Disability”

Published on: September 19, 2016 | by Matt Pulle

The definition of “total disability” is among the most important definitions in a disability policy and, consequently, in disability lawsuits. It is also one of the most confusing. For example, can you recover disability benefits for total disability if you can still perform some aspects of your job?

In a recently published Sixth Circuit case, Leonor v. Provident Life & Acc. Co., (2015), the court wrestled with an insurance company’s interpretation of its definition of “total disability,” and construed it in favor of the insured. The Plaintiff, the insured, a practicing dentist who also managed several dental offices, suffered a spinal injury that prevented him from performing dental procedures. He was still able, however, to manage his dental offices. In fact, after his injury, he bought more dental offices. Those investments proved lucrative and the Plaintiff’s overall income actually increased after his injury.

Following his injury, Plaintiff claimed total disability benefits under each of his three disability policies. Initially, the Defendants, the insurance companies, began paying his disability benefits. Later, the Defendants stopped paying disability benefits under two of the policies when they discovered that the Plaintiff was able to manage his dental offices. In denying the Plaintiff’s disability claim, the Defendants pointed to the definition of total disability in his policies:

“’Total disability’ means that because of Injury or Sickness:

You are unable to perform the important duties of Your Occupation….”

(emphasis added)

Defendants maintained that, under the policies, the Plaintiff would have a “total disability” only if he could not perform all of his occupation’s important duties. The Defendants pointed out that the Plaintiff could still perform the “owner/operator” duties of his occupation, and, therefore, did not have a total disability.

Whether You Have an ERISA Case or Non-ERISA Case May Be Critical To Your Disability Claim

Published on: August 23, 2016 | by Matt Pulle

If you’re making a disability insurance claim, the type of plan you have may matter more than any other fact in your case. Consider, for example, two plaintiffs who have the same occupation and suffer from the exact same disability, only Plaintiff “A” has an employer-provided plan governed by the Employee Retirement Income Security Act (ERISA), while Plaintiff “B” has an individual long-term disability policy. Plaintiff A may have a far more difficult time collecting her disability benefits.

The reason is straightforward: In an ERISA case, the standard of review (the amount of deference a court will give to a plan administrator’s denial) is high and the plaintiff must show that the denial of benefits by the plan administrator was “arbitrary and capricious.” Making matters more difficult for our Plaintiff A, the court will usually examine only the record which was before the plan administrator in determining whether the plan administrator’s decision should be overturned.

In contrast, a claim brought under an individual disability policy for failure to pay benefits is a claim which will be brought pursuant to the Tennessee common law of breach of contract. Therefore, Plaintiff A can take her case all the way to a jury decision by merely showing that there is a triable issue as to whether she suffers from a disability as defined in her policy.