Proving Disability in Internal ERISA Benefit Appeals: Why It Is Easy to Get it Wrong

In my ERISA benefits practice, I often have the opportunity to review the work other lawyers have done in the initial internal appeal with the insurance company.  For more background on why the internal appeal process is so important, you can see this article from my firm’s website.  Most often, the lawyers have not done many ERISA internal appeals.  They may think that long-term disability appeals are not really that different from other areas where inability to do a job is an issue, such as a Social Security Disability Income denial or workers’ compensation.      

• In one way, they are right: in each area, the claimant must show he or she can’t work, so the burden of proof is on the claimant.

BUT

• What is required to meet the burden of proof in the three areas is fundamentally different.  Evidence that can win a workers’ compensation or SSDI case can be a loser in a disability insurance case.  

In both Social Security and workers’ compensation cases, once a claimant submits a certain amount of evidence, the effective burden of proof is shifted:   

• Social security disability income appeals have a “treating physician rule:” once the claimant submits an opinion of disability from a treating physician supported by medical evidence, the claimant generally wins.

• In workers compensation, a doctor’s statement that contains the magic words “I state with a reasonable degree of medical certainty,” that a disability resulted from a workplace injury may be enough to force the insurance company to prove that the opinion is wrong.

Of course, the doctors’ statements in these areas have to be supported by the medical records, but in many cases the treating doctor’s statement can be short and conclusory.

Claimants in ERISA cases don’t get the benefit of these presumptions: while a plan has to have some reason to reject a treating physician’s opinion, there is no treating physician rule that requires deference.  A short doctor’s letter that can win a workers’ compensation case can probably be safely ignored by an ERISA plan that has a contrary opinion from a doctor who has only reviewed medical records and has not examined the patient.  

Two aspects of ERISA make it more difficult to establish disability than under SSDI or workers’ compensation:    

• The first is the basic ERISA principle that the language of the plan documents governs almost everything.  To a great degree, the plans get to establish what a claimant must show to be entitled to benefits, and understandably, they do not make it easy.

  

• The second is the standard by which a court is likely to review the benefit denial.  Due again to language in the plan, almost every benefit denial reviewed by a court is going to be arbitrary and capricious review, which means the court is supposed to uphold the denial if there is any rational basis for the decision. So, what happens when a lawyer submits a doctors’ letter that could win a workers’ compensation case?  The court is likely to hold that a plan that relies on a medical file review paid for by the plan rather than a short letter stating the doctor’s opinion has a rational basis for the denial, and the claimant loses.   

In many states, it can be hard to find a lawyer who is experienced with appealing long-term disability denials, either for private insurance or group plans governed by ERISA.   In Connecticut where I practice, there are only a few experienced long-term disability insurance attorneys.  But, finding an attorney who knows how different it is to prove an inability to work in an ERISA case can make the difference between winning and losing.

What Do We Submit for an Internal Appeal With the Insurance Company?

In this blog, I have frequently discussed the importance of the internal appeal with the insurance company.  I haven't discussed what we commonly submit for internal appeals, though.  I recently posted an article to my new firm's website discussing what I commonly put in the letter, and the reports and medical records I submit with the letter.  As you can see, a lot goes into an effective appeal of a long-term disability denial.

In Introduction to Why the Internal Appeal is Important in ERISA Benefit Denials

As you may know, I moved my Connecticut LTD and ERISA practice last month to Zeldes, Needle & Cooper in Bridgeport, I've been working on posting articles to the new firm's web site.  Today I posted an article discussing the administrative appeal process and why it is important.  It is a good general introduction to the issues involved.  As the article notes, the insurance company won't tell you one of the most important things about the internal appeal process: that you probably won't be able to submit any new information in litigation that you haven't submitted during the appeal process. That is why is can be important to have an attorney during the appeal process to make sure you have the best chance to get the result you want in the appeal, and to put you in the best position to win in court if you don't win the internal appeal.

Deceptive Attending Physician’s Statements: How to Fight the Form

What your treating physicians say about your condition and disabilities is the most important part of the claims process.  If you were an insurance company, wouldn’t it be great if it could come up with a way where it is almost impossible for the doctor to find that you are disabled?  Well, some insurers have done that with the form that asks the doctor to list your diagnosis, treatment, and you capacity to perform work-related activities like standing, walking, and lifting.  Different insurers have different names for the statements: 

• Sun Life and Aetna call it an Attending Physician’s Statement;
• Cigna calls it a Physician’s Statement of Disability;  
• Sedgwick calls is a Physician’s Certificate for Disability Benefits.

Some forms are fair, and others are intended to keep your doctor from certifying you as disabled so long as you can occasionally sit, stand or walk.   

Here’s a link to an unfair form that Aetna uses for some cases.  The crucial part of the form is in the middle, asking the doctor to state whether the patient's ability to sit, walk, stand, etcetera, is "Occasional," "Frequent," or "Constant."

How does this form convert a physician’s certification of disability into a certification of no disability?

• The form uses broad categories: The most restrictive category available is “Occasional,” for activities the claimant can perform from .5 to 2.5 hours a day.  There is no category for “Never.”  So, let’s say you doctor thinks you can stand, sit or walk for half an hour each, or a total of 1.5 hours in a day. So he fills in “O” for “Occasionally” for the sit, stand and walk categories.  The doctor understandably believes he has certified that you cannot do a sedentary job.

• The insurer using the top of the broad range: Despite your doctor’s intentions, the insurer can read this form to establish that your doctor believes you can do a sedentary job.  “Occasional” is defined in the form as up to 2.5 hours day.  So, adding together the maximum hours for the three categories gives a 7.5 hour a day work capacity. The insurer can therefore use this form to conclude that your doctor believes you can perform a sedentary job requiring sitting, standing and walking, even though your doctor thinks you can only do these things for 1.5 hours! 

So, what do you do?  How can you fight the form?  In my Connecticut LTD denial practice:

• I use my own form if the insurers’ forms are deceptive, breaking down the first category into “Never,” “Less than 5%,” “5-20%” and “20-33%” so that the insurer won’t be able to convert a doctor’s certification of an 1.5 of work capacity into a full day’s work, or

• I have the doctors prepare a narrative discussing more specifically what my client can and can’t do as it relates to the specific job duties of the position at issue, without being locked into the categories the insurer uses on its forms.  

Deceptive attending physician’s statement forms are one of the reasons it can be difficult to represent yourself, whether in an appeal of a LTD denial or an initial application for short-term disability or long-term disability.  The best way to fight these tactics is to have an experienced long-term disability insurance attorney in your corner who knows the games insurer’s play, and how to fight them.  

What Is ERISA? Welfare Benefits: Disability Benefits; Health Insurance; Severance Claims

As discussed in the prior post, ERISA governs almost all employee benefits, including non-pension benefits like LTD benefits, severance, and medical insurance.   These non-pension benefits were included in ERISA as an afterthought, and not many provisions of the law itself addresses them.  Over the forty years ERISA has been in effect, however, the courts have developed a complicated structure to apply ERISA to non-retirement benefits, a structure which the courts regularly change.  This is another one of the areas that makes ERISA complex.

With a Connecticut LTD denial, an attorney has many options in suing in court or pursuing a remedy with the Connecticut Department of Insurance.  With an ERISA LTD case, or other ERISA benefit claim, there are a different set of rules.  

• ERISA does not require that a company offer any particular benefits, or require that any particular class of employees be covered.  So, a company doesn’t have to offer severance benefits, and can decide that some employees (for instance, part-time employees) are not entitled to benefits.  As with everything with ERISA, there are exceptions to this, particularly regarding health insurance after Obamacare, and limitations on favoring highly compensated employees.  But generally, employers get to offer what they want to, and they don’t have to fair about it.

• Welfare benefits, as opposed to pension benefits, don’t vest.  That means until an employee earns the right to get a particular benefit, the employer can change or eliminate the benefit.  Pension benefits, on the other hand, cannot be changed once the benefits vest, even if the employee is not yet receiving pension payments.  So, the day before you are laid off, the employer can eliminate a severance plan, and there is nothing you can do about it.  As with everything with ERISA, there are exceptions: once you have started to receive benefits, the employer can’t take them away.

• Prior to going to court to get benefits, you must exhaust any appeal rights that exist with the plan.  Nothing in ERISA requires this appeal, but the courts require it in almost every case.  So, after the plan denies your severance claim, health insurance claim, LTD claim or other welfare benefit, you must write the employer and ask them to change its mind.  Once the courts imposed the requirement, the Department of Labor issued regulations requiring plans to provide a fair and unbiased review of the denial.  Anyone who has been following this blog knows how important the administrative appeal is.  Even though it is not required by ERISA itself, it is one of the most important things in getting benefits that have been denied.  It is an example of the dangers ERISA presents to inexperienced lawyers.

Regarding health insurance, the Affordable Care Act, or Obamacare, has changed the landscape for denied medical benefit claims in many cases.  See my post on this here, and my post on the Supreme Court’s decision in King v. Burwell upholding key provisions of the act here.

Despite the changes made by Obamacare, plan participants in Connecticut and elsewhere with medical benefit claims, long and short disability benefit claims and severance claims, will have to go through the ERISA maze to vindicate their rights to benefits.  Make sure you have a guide in the maze who has been there before.

What’s The First Thing to Do When you LTD or other ERISA Claim is Denied? Get the Claim File!

Throughout this blog, I have discussed the claim file in discussing other topics.  But, I’ve never stepped back and discussed what it is, what ERISA requires regarding the claim file, and why it is important that you get it.  

I was reminded of this when I was speaking to a lawyer pursuing an appeal of a denial of long-term disability benefits in Fairfield County, Connecticut.  He isn’t a Fairfield County ERISA attorney, but he is an accomplished lawyer in all respects.  I found out that he was finishing an appeal, but hadn’t requested a copy of the claim file.  As I’ll discuss below, the claim file is crucial to any LTD benefit appeal.  If this lawyer didn’t know about it, I figured it was important to be explicit about the significance of the claim file on my blog, which is intended for an audience of non-lawyers.  

You have an absolute right to get a copy of your claim file under ERISA if any adverse action is taken regarding your claim, such as a denial.  You should do it immediately when you get the denial.  The denial letter should advise you of your right to get a copy of the file, and whom you have to write to get it.  If it doesn’t, send the request to the person who sent the denial letter.  You must request it in writing, but you should follow up by phone a few days after you send the request.  I think that sometimes requests for claim files are placed on the corner of a desk, and stay there unless someone follows up.  Be careful to review the letter you get back along with the claim file.  Some companies will construe a request for a claim file as an appeal.  That is a problem, because then time deadlines start running, and you won’t have enough time to get medical records, reports or tests done.  If the letter you get back says that you have appealed the denial, make sure you write the insurer that you are not appealing the decision at this point.

The claim file is the record of the insurance company’s activities about any ERISA benefit claim.  As you might expect, it has copies of all correspondence to and from the insurer, the claimant, the claimant’s doctors and other medical providers.  It also has all the communications between the insurer and the doctors it hires to review your claim, the deliberations of the insurer’s internal medical reviewers, and any medical providers it hires to conduct an independent medical exam of your claim.  It includes the insurer’s internal deliberations, including notes of meetings where your claim was discussed, and internal emails discussing the strategy for reviewing your claim.

It would be hard in a single blog post to list all the ways the claim file can support your claim, but here are a few of them:

• You can find out the name of the doctors who conducted the file reviews and IMEs, so you can determine if they are qualified to give an opinion on the medical condition at issue.  You need to know if the insurance company doctor who rejected the opinion of your board-certified rheumatologist on the Yale Medical School faculty with many published articles on fibromyalgia, is a family medicine doctor employed by Unum who last practiced 10 years ago in rural clinics in Maine.
• Reports obtained by the insurance company may help you.  I found one file where the insurance company sent the insured to a functional capacity evaluation that found he couldn’t do the job, and the insurance company disregarded the report.  If I hadn’t seen the claim file, I would have never known that.
• You can find medical records that support you that the company ignored.  Even without the claim file, you’ll have access to the record through your doctor.  But, it is a good argument to show that the decision was not made in good faith if the insurer is ignoring evidence helpful to you that is in its own file.
• You can find out what records were given to the doctor who conducted the Independent Medical Exam, or the physician reviewing your medical records.  Sometimes they don’t give the entire medical record, culling out materials that would be helpful to you.  
• You may see that the insurer decided to deny the claim even before obtaining any tests or file reviews to justify the decision, which again goes to show that the decision was not made in good faith.

There are many other ways in which the claim file can be used to mount a successful appeal, and put you in the best shape if you have to go to court on your claim.   Get the file first thing, and you, or your ERISA benefits lawyer, can start preparing your appeal without delay.  And, if the lawyer handling your LTD benefit appeal hasn't obtained a copy of the claim file, well then . . .

If You Make the Same Arguments In Your ERISA Appeal that You Made Before, Get Ready To Lose

When you submitted your initial application for long-term disability benefits, or any other benefit subject to ERISA, you thought you submitted enough to show that you were disabled: 

• Your claimant statement recited the many things you could no longer do at work or at home; 
• Your doctor submitted an Attending Physicians Statement outlining how little you can sit, stand, keyboard, lift, etc.; 
• You bugged your doctors for weeks to get them to produce the medical records requested by the insurance company.   

If your treating physician gave an opinion that you were disabled, how could the insurer disagree?

So, you are shocked when you get the denial.  You immediately start making a list of the evidence the company ignored: the doctor’s opinions rejected for no good reason; the unfair conclusions; your detailed statement about what you could do.  You are outraged at the decision, and you want to insurance company know all the ways it messed up.  If the company just conducted the “full and fair” review that is mentioned in the denial letter, they can’t help but grant you benefits, right?.  So, you prepare an appeal of the denial of long-term disability benefits, pointing out all the things in the materials you submitted that show you are disabled that the company ignored.  

Prepare to be shocked again, because it is almost inevitable that you will be rejected again.  Even if you think you have the best case possible, you have to submit new information for the appeal.  After all, the appeal will be decided by the same company that denied benefits the first time.   The company is not going to change its mind without new evidence, no matter how unreasonable the first denial was.  

ERISA requires that the insurer state the reasons the claim was denied, and what information has to be submitted to prove the disability.  Take advantage of one of the provisions of ERISA that actually helps you!  Use the denial letter to find out exactly what new information you need to submit to have the best chance to prevail in your appeal. 

The types of information you should submit is addressed elsewhere in this blog: get a neuropsych exam; have a functional capacity evaluation done; have your doctor do a new evaluation of your cervical spine to specifically address the issues raised by the insurance company.  The information submitted with the appeal will be different in every case, since it has to address the specific reasons raised by the company for denying the appeal.  And, you certainly will point out the errors the insurance company made in its initial decision.  But, you will discuss it after you present and argue your new information.     

It is hard not to respond reflexively, to defend what you have done, when you receive an indefensible decision by an ERISA plan or insurer. But, step back, take a breath, and figure out what new information you need to submit to address the grounds for denial set forth in the denial letter.  Having an ERISA attorney in Connecticut, or your state, can be a big help in the process in providing the knowledge and experience you need to get the benefits you earned.  

Request Reasonable Accommodation: Show You Can’t Work, Not That You Don’t Want to

Requesting reasonable accommodation can help get LTD benefits, or win an appeal of a denial of LTD benefits.  In my prior post, I discussed how exercising your rights under the Americans with Disabilities Act to request reasonable accommodation can help you remain in your job when your medical condition impairs your ability to perform some aspects of your job, but you can still perform the essential functions of your position.  In this post, I’ll discuss the effect a request for reasonable accommodation can have on your application for disability insurance benefits under either an ERISA group LTD policy or a private disability policy under Connecticut law.

Applying for reasonable accommodation when you are still working can help you two ways:

• First, under some disability policies, you are not considered disabled if you can so your job with reasonable accommodation.  If there is a reasonable accommodation that the insurer believes would allow you to keep doing your job, then you won’t be considered to be disabled.  For instance, if the insurer's physician decides you can do your job if you get up and move around every hour, then you won’t be disabled even if you can’t sit all day.  If, however, you have tried the reasonable accommodation when you are still working and it didn't work, you will have a basis to refute the insurer’s reasonable accommodation argument.
• Second, doing everything you can to stay in your job, including requesting reasonable accommodation, shows the insurer that you are only applying for LTD benefits because can’t work, not because you don’t want to work.  Insurers are always on the watch for claimants who are interested in “secondary gain,” that is, patients who report impairments to get some other benefit from claiming impairments (such as getting LTD benefits) rather than to receive treatment.  You have to be particularly careful of this if your medical records contain statements that you hate your job, it is causing you stress, you don’t like your supervisor, or you want to spend more time with you kids.  You don’t want to raise issues about your motivation for applying for benefits.

As discussed in the prior post, reasonable accommodation can be complicated, and depends very much on your particular impairments and the actual requirements of your particular position.  Having an attorney who knows federal and Connecticut employment laws, and who can handle a Connecticut LTD appeal or a LTD suit in the Connecticut district court can be helpful.  Whether you use an attorney or not, asking for reasonable accommodation while you are still working can help you qualify as disabled, and will certainly help show that you aren’t applying for benefits simply to avoid working.

Disabled While Working: Leaving Your Job? Get Your Personnel File!

Your personnel file can provide useful information to support an initial claim for long-term disability benefits, or to help prevail on an appeal of a LTD denial.  For instance, performance reviews may show a change in performance that can attributed to impairments resulting from your condition; older performance reviews may have praised you for your attention to details, but later ones cite that as a weakness.  This is concrete, objective evidence of the most important fact: the effect of the condition on your ability to do your job.  Also, attendance records can be important.  If you condition is causing you to be out of the office ten days a month, it is hard to claim that you can still do your job.

If you are filing a long-term disability insurance claim in Connecticut, or handling a Connecticut LTD denial appeal, you may not have access to this information if you wait too long.  The Connecticut Personnel Files Act, C.G.S. Sec. 31-128a, only requires an employer to retain personnel records for one year after employment ends.  An employer will probably keep the records for three years to satisfy federal law requirements, but there is an argument that the employer isn't required to release the records after one year after the end of employment.

To avoid this argument, request a copy of your personnel file when you leave your employer, whether it is voluntary or otherwise, so you can make sure you have access to this information in the future if you need it for a Connecticut disability benefit claim or appeal.

From Diagnosis to Disability: Working While Disabled- How Will It Affect My Disability Claim?

Career and family are the two poles about which many of us organize our life.  Losing the pole of work is one of the most distressing consequences of a degenerative condition.  Rather than being outward facing to meet the needs of others (clients, supervisors, co-workers), patients with degenerative diseases are forced inward to focus on healing and coping.  The financial costs of going on disability insurance, which usually pays 60% of income, can make going on disability a difficult decision, particularly if one has children in college, or is dealing with the dual roles of caregiver for one’s children, and one’s parents.  Working while disabled can affect your disability claim, though.  Clients in my long-term disability insurance practice in Connecticut regularly confront the consequences of working while disabled in ERISA benefit appeals and ERISA benefits lawsuit.  

Many people with degenerative diseases, therefore, work as long as they can.  They will make extraordinary efforts to maintain a busy travel schedule even when chronic back pain makes sitting for more than an hour excruciating.  They work longer hours to get the same work done to cope with the cognitive effects of multiple sclerosis.  They ask for duties to be shifted to other employees to deal with a lifting restriction.

What are the consequences to your long-term disability benefits if you work while you are disabled?

• Partial Disability Benefits.  If you have a policy or plan that provides for partial disability benefits, you can be in good shape.  Under such a provision, if you work part-time or less productively as a result of the disability and your income declines, you can get a partial benefit that makes up all or much of the decline in income.  These provisions care often included in private disability policies.  You can reduce your hours and duties, reduce your pay, and replace all or most of the lost income with a partial disability benefit.  Since your employer can pay you for the reduced value you are bringing in, it is more likely that they will keep you on.  This is a great provision, but the formulae for calculating the benefit for a given level of income can be complicated, so it may be useful to consult with an ERISA benefits attorney if you have any questions about it.  

• Will The Insurer Decide You Are Not Disabled if You Are Working?  One of the most unfair consequences of working while disabled is that the insurer may conclude that if you are working, then you can’t be disabled. For instance, let’s say your medical records reflect a level of impairment in May 2013 that could support a finding of disability, and the records for each month after report that you are “stable.”  If you keep working until May 2014, the insurer could say that the fact that you did work for a year shows that you are not disabled.  The insurer may say the medical records reflect no change in condition that could explain why you could do the job from May 2013, but could no longer perform it in 2014.  Some courts haven’t been fooled by this, and realize that some people make heroic efforts to remain in the jobs even though they are disabled. Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914, (7th Cir. Ill. 2003) 

What Should You Do To Protect Your Right to Benefits when Working While Disabled?

Whether you are planning to receive partial disability benefits, or just trying to avoid the insurer claiming that you are not disabled because you have worked for your disability, you should do the same thing to make sure working while disabled doesn’t hurt your long-term disability insurance claim:

• Talk to your doctor about how the impairments are affecting your work, and make sure he records it in the medical record.  Here’s a link to an article I wrote on the issue: Making Your Medical Records Work For You
• Keep a log of the difficulties your job gives you.  Make sure you do this particularly if you are doing some activity that could be argued is inconsistent with your disabilities.  For instance, if you take a long business trip, make sure you make a record that you had to take two sick days after the trip to recover.  Then, when the insurer it up in claiming that it shows you can work full-time, you will have a record to refute it.

Don’t let working while disabled turn into not working and not getting long-term disability benefits.  Talking to your doctor and keeping a log will make it more likely you will prevail on an initial claim for log-term disability benefits, in an appeal of the denial with the insurer or plan, and in any ERISA benefits law suit you file.

Other Posts in the Diagnosis to Disability Series

Diagnosis to LTD Application: Six Things to Consider

When Should You Tell Your Employer About Your Chronic Condition?

Reasonable Accommodation Can Keep You At Work

Getting the Administrative Appeal Right

You have been denied long term disability benefits by your employer-provided disability plan. The denial letter says you have 180 days to send an appeal of the denial to the insurer. Should you do it? Is it important? Do you need a lawyer to handle the appeal? Can I sue in court without appealing the denial? Why should file an appeal with the same people who just denied me my benefits? Why would they change their mind?

The denial letter will give you some information about the denial, but it won't tell you why the administrative appeal process is important. Even if you are sure the insurer won't change its mind, you still should file the appeal. By law, you have to file the appeal of the denial of long-term disability benefits before you can sue the insurer in court. [1] Also, the court generally won't allow you to use any information in the lawsuit that was not submitted to the insurer in connection with the appeal.

For instance, let's say you believe your condition impairs your ability to think and reason (called "cognitive impairment"). One of the best ways to establish cognitive impairment is with a neuropsychological exam. Once the lawsuit is started, your lawyer may want to present the results of such an exam in the litigation. If you didn't have the test done and submit the results to the insurer during the appeal, however, you probably will not be able to use the results of the test in the lawsuit against the insurer. Or, you are claiming disability based on fibromyalgia, chronic fatigue syndrome or chronic back pain, and the insurer obtains a surveillance video that shows you going grocery shopping. You may want your physician to give a statement explaining why what is shown on the video is not inconsistent with your diagnosis or your restrictions and limitations. If you haven't submitted it during the appeal, you probably won't be able to submit it in any subsequent litigation.

A lawyer can assist in the administrative appeal by making sure that everything that would be necessary or useful during the litigation is submitted during the appeal. Even if you didn't use an attorney for the first level of the appeal, most insurers have a second optional or mandatory appeal where additional information can be submitted. Even if you have been denied twice, so long as not too much time has passed since the denial, we can often submit additional information during the appeal that we can then use in later litigation. Also, the same administrative exhaustion requirement applies to denials of employer-provided group medical and health insurance benefits, so you may want to use a lawyer in these cases as well.

Long-term disability benefits offered through your employer are governed by a federal law called the Employee Retirement and Income Security Act (commonly called "ERISA"). Courts have interpreted ERISA to require appeals to be filed with the insurer. . Long-term disability policies that you buy directly, and not through your employer, are not governed by ERISA, and are subject to state insurance laws. These generally do not require administrative exhaustion, but pursuing an appeal can result in the insurer changing its mind, so they are worthwhile to pursue even if they are not required.

ERISA benefit appeals and private disability insurance appeals can be complex, and actions you take during the appeal can affect your ability to recover in court later. Carefully consider whether a lawyer would be useful in navigating the process.

[1] There are some exceptions to this requirement to exhaust the plan's administrative remedies, but it is far better to file the appeal and not have to rely on these exceptions. If you haven't filed the appeal and want to know if you can still sue, give our firm a call and we can discuss it.

This is an article from my website, www.CtLtdLawyer.com.  You can go to that link for more information about disability benefit appeals.