Plans for the Blog in Coming Months, And What I Did This Summer

If you are a regular reader of this blog (and I hope there are some!), you may have noticed that nothing new has been posted for a while.  I’ve had a busy summer, as I got married, and went for a great honeymoon in Scotland.  I’ve posted a few pictures below.  But, probably like you, now that Labor Day is passed, I am excited to pick up some of the projects that were put aside for the summer.  Here’s what up for the blog in the coming weeks:

• The last part of my series on “What is ERISA,” discussing ERISA and retirement benefits;
• A post titled “The Insurance Company’s Calling You a Liar,” discussing how insurers claim that they can ignore what you say to the doctor about your pain and impairments, dismissing it as “only self-report.”  Do the insurers really believe that patients lie to the doctors, the ones on whom they rely for treatment and healing?
• An update on when a plan can impose a shorter period for filing a lawsuit than what the law otherwise provides, discussing Mirza v. Insurance Administrator of America, Inc.
•  I’ll discuss Shaw v. AT&T Umbrella Benefit Plan No. 1, which shows that courts are increasingly skeptical about insurers ignoring the opinions of treating physicians unless they have a sound basis for doing so.

Let me know what you would like me to discuss in my blog.

And, as promised, here are some pictures of my wedding and honeymoon in Scotland.

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 is ERISA? What Difference Does it Make?

Even if you are new to the world of employee benefits, you have probably regularly seen references to ERISA, but you may not have run across an explanation of what it is.  In this post, I’ll discuss what ERISA is, and what tyipically are the most important consequences of a benefit issues being an ERISA case as opposed to a non-ERISA case.  

ERISA is the acronym for the Employee Retirement and Income Security Act, which is a federal law enacted in 1974.  The law was mainly intended to protect employee pensions.  Companies were going bankrupt without fully funded plans.  For instance, when Studebaker closed in 1963, its workers received 15% of the pension they had been promised.  Also, employees had to work a long time to vest in a pension, even as much as ten years, and the employee would get nothing if he missed the vesting date by a day.  Employers therefore had a strong incentive to fire employees shortly before their pensions vested.  ERISA addressed these issues by requiring full funding of retirement plans and less onerous vesting schedules, and by protecting employees from being fired because the employee was about to earn a pension.  ERISA imposes fiduciary duties on those who administer the plan and invest plan assets to act in the interests of the beneficiaries rather than the employer.  

In addition to pensions, ERISA covers non-pension employee benefits, called “welfare benefits” in the Act.  In future posts, I’ll discuss the effect of ERISA on pension claims, and on welfare benefits claims.  In the remainder of this post, I’ll talk about some of the principles of ERISA that apply to both types of claims.

Only plans established by private employers are subject to ERISA.  Plans for federal, state or local government employees and plans established by churches and other religious institutions are not subject to ERISA.  Also, benefits that you buy yourself, like a private disability policy, are not governed by ERISA.  

What’s Special About ERISA?

The ERISA laws passed by Congress establish a relatively simple legal foundation, though with technical requirements that can cause problems for an inexperienced lawyer.  In addition to the law Congress passed, the courts have developed an elaborate structure on the statutory foundation that is arcane and technical, and changes every few years.  I’ll state the general principles, but there are technical exceptions to almost everything I will say here, so don’t think these principles apply in all cases.

• Federal law governs any matter covered by ERISA.   ERISA preempts all state laws.  “Preemption” means that federal law displaces all state laws that deal with the subjects ERISA addresses.  For instance, in a Connecticut denial of LTD benefits not subject to ERISA, I might be able to recover for an unfair insurance practices claim, and get punitive damages and emotional distress damages, and a jury would hear the claims.  If the plan is governed by ERISA, then I won’t be able to bring any of these causes of action, I will be in federal court, not state court, and I won’t get a jury. 

• Because no state laws apply to claims, limited damages can be recovered.  Basically, if you win under ERISA, all you are going to get is the benefits the company should have paid you in the first place.  You won’t get compensation for the sleepless nights you had wondering how you would pay the mortgage, or whether you would have to ask your daughter to leave college.  Maybe, if you win in court, your attorney will get some fees, but that is it.  Individual ERISA cases are therefore much less lucrative for attorneys, which means it is much harder to find an attorney to represent you in an ERISA benefit denial.

• In ERISA, the official plan documents are all that matter.  The official plan documents consist of the plan document itself (frequently the insurance policy in an LTD claim), and the Summary Plan Description, which is a plain language explanation of benefits that is given to the plan participants.   Even if the president of the company sends you a letter, countersigned by the chairman of the board of directors, that you will get a certain benefit, if the benefit is not in the plan documents, you probably won’t be able to enforce the promise.  Employee benefits departments frequently give out wrong information, but rarely can the employees do anything about it, even if the employee has suffered real damage from depending on the wrong information.  That the plan documents control can also be a good thing.  If the plan provides that you are entitled to benefits, you must be paid them, even if the employer thinks they are too expensive or that you don’t deserve them.  But in general, limiting benefits to what is provided in the plan documents makes ERISA cases more difficult than other cases.

While the statutes and the cases interpreting them are complex, many of the legal principles are the same as lawyers always deal with: benefits claims are basically breach of contract claims; and breach of fiduciary claims are based on trust law principles that are hundreds of years old.  Navigating the complicated course of regular law and ERISA’s special rules is complex, but finding a lawyer experienced in the area can help you get the benefits you have earned, and vindicate the few rights that ERISA gives you, whether you are seeking ERISA pension benefits, severance pay, medical benefit claims, or long term disability.

Supreme Court Comes Through For Obamacare!

If you are interested enough in the topics I discuss in this blog, you probably already know that the Supreme Court, in the case of King v. Burwell, upheld the health insurance subsidies that are a key part of Obamacare.  In my civilian life as a liberal democrat and strong supporter of President Obama, I am happy with the decision.

But, as a Connecticut ERISA lawyer, I am happy for what the decision means for my clients.  For all the problems with insurance that I discuss in this blog, insurance is a good thing, and good insurance is a great thing!  Obamacare, or more formally the Affordable Care Act, is achieving its goal of increasing the number of insureds, and making sure that insurance is more likely to cover the expenses from a serious health condition.  You may need my help, or another ERISA attorney, to appeal an insurance company's denial of a medical claim.  I would rather have that fight, though, then try to keep a hospital from foreclosing on your house for unpaid medical bills. 

The Act does other good things.  For years prior to the Act, I had clients who used up their COBRA, or couldn't afford COBRA, and had preexisting medical conditions that prevented them from buying private insurance.  Or, once they lost their jobs, they had no way of affording health insurance, but now, they can get subsidies on the health exchanges.  

There are problems with the law, of course. and any program as huge as Obamacare will have problems with implementation.  But with the Supreme Court's decision today, the question of the legality of the Act should be over, and opponents and supporters can work together to make the law more effective and fair.  

2015 ERISA Litigation Review

For the sixth year, I've prepared the annual review of ERISA litigation for the Annual Review of the Labor and Employment Law Section of the Connecticut Bar Association.  Here is a link to the article.  It is intended for lawyers, but it can give you an idea of the current state of ERISA litigation.  Among the topics discussed are:

• What remedies are available under ERISA for both participants and plans;
• Pending cases in the Supreme Court whether plans have the right to recover from personal injury recoveries for medical claims paid, and whether the Summary Plan Description is a plan document that can be enforced;
• The latest installment of the saga of Amara v. Cigna, where trial courts, appellate courts and the Supreme Court have striven mightily to try to fashion a remedy when a plan lies to its participants, constrained by the Supreme Court's prior decision severely limiting the remedies of plan participants.  
• Long-term disability litigation in Connecticut district courts and other federal trial courts.  Several of the cases found against the insurer on grounds that the company's basis for disregarding the treating physicians opinions were not valid.  They provide some good clues about how to attack the insurer's decisions on appeal.  

Here is a link to my Employee Benefits Practice Page, which has links for the ERISA litigation updates I've prepared for the Connecticut Bar Association for 2010 through 2014.  Reading them together gives a good sense of the evolution of ERISA benefit appeals in Connecticut, and throughout the country.  

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.