Indiana Long Term Disability Lawyer Blog

The Northern District of Illinois recently ruled in favor of the Plaintiff's summary judgment motion in a long term disability lawsuit. In Krupp v. Liberty Life Assurance Company of Boston, the court found that Liberty Life's termination of Ms. Krupp's long term disability benefits was arbitrary and capricious. Krupp's long term disability benefits were provided through her employee benefit plan and accordingly, the case was examined under the rules and regulations of the Employee Retirement Income Security Act ("ERISA"). To read the full opinion, see the link here.

Continue reading "Northern District of Illinois Finds that Liberty Life's Termination of Disability Benefits was Arbitrary and Capricious" »

Fibromyalgia is a condition that may prevent someone from working. In these situations, the person may be able to apply for short term disability benefits, long term disability benefits, or Social Security disability benefits. When it comes to filing a claim for disability benefits, it can be challenging for claimants to prove that their fibromyalgia is disabling. These challenges appear in claims to both insurance companies and the Social Security Administration ("SSA").

Those who suffer from fibromyalgia experience chronic, widespread pain and fatigue, but the objective test results may not show this. Unlike conditions such as Multiple Sclerosis or degenerative disc disease, fibromyalgia does not appear in MRIs or x-rays. Because fibromyalgia is a disorder which does not appear in medical imaging or blood tests, it can be a difficult condition to diagnose. If a fibromyalgia patient is applying for disability benefits, they should follow these steps to document proof of their disability:

Continue reading "Fibromyalgia Disability Claims" »

If you have been denied short term or long term disability benefits, you may have noticed information in your denial letter about The Employee Retirement Income Security Act of 1974, or "ERISA." ERISA includes regulations for all employee benefits that are offered by private employers, including your group health and disability insurance.

Which Employee Benefit Plans are Covered by ERISA?
ERISA governs most private employee benefit plans, including disability and health insurance plans.

Which Employee Benefit Plans are Exempt from ERISA?
ERISA usually does not cover employee benefit plans offered through public or church employers. If you're an employee of a public school or a church owned hospital, your employee benefit plan may be exempt from ERISA. Additionally, "salary continuation plans" may also be exempt from ERISA.

My ERISA Claim Has Been Denied. Now What?
If your ERISA claim has been denied, you must first file an appeal. ERISA allows the claimant to seek legal representation during the appeals process and O'Ryan Law Firm may be able to help you.

Appeal
ERISA describes the number of days allowed to appeal and also the number of days in which the insurer has to make a decision. During the appeal process, the claimant has the right to request the administrative claim file that the insurance company has created. ERISA law specifies that the employee's claim file must be sent within 30 days of a request.

ERISA law states that a claimant must appeal a denial within 180 days. If a claimant fails to appeal by this deadline, they could forfeit their claim for disability benefits. The appeals process is very important and must contain relevant medical and vocational evidence.

Once the claimant has appealed, the insurance company has a maximum of 90 days to make a determination. If the insurance company's review will take longer than 45 days, then the insurer is to notify the claimant in writing that more time is needed.

Lawsuit
In most situations, the claimant must exhaust the appeals process before they are permitted to file a law suit in court. Because ERISA claims are governed by a federal act, the claimant must file a lawsuit in federal court. The deadline to file a lawsuit is usually included in the employee benefit plan.

Unfortunately, the judge's review of the ERISA claim is generally limited to the evidence that was supplied during the claim review process and appeal. That means that the claimant does not have the chance to submit supportive medical information after their last appeal has been denied. Therefore, the appeal phase is extremely important to a claimant's chances of success.

Additionally, ERISA cases are not entitled to a jury trial. Rather, the judge is the sole determiner of the lawsuit. The judge usually makes his or her determination by reviewing extensive legal briefs by both the Plaintiff and Defendant.

Contact O'Ryan Law Firm
Because the rules of ERISA are complicated and O'Ryan Law Firm has a wealth of experience handling every step of the ERISA claims process, we may be able to help you if you have been denied disability insurance benefits.

Plan and claims administrators processing employee benefit claims under ERISA are subject to statutory and regulatory requirements designed to ensure that claimants receive a full and fair review of their benefit claims. When an employee's benefits are denied, ERISA mandates that specific reasons for the denial of benefits be communicated to the claimant. Militello v. Cent. States, Se. And Sw. Areas Pension Fund, 360 F.3d 681, 688 (7th Cir.), cert. denied, 543 U.S. 869, 125 S.Ct. 106, 160 L.Ed.2d 115 (2004). The relevant section of ERISA provides that every employee benefit plan must afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the plan administrator or the named fiduciary denying the claim. 29 U.S.C. § 1133.

Furthermore, federal regulations promulgated pursuant to ERISA by the Secretary of the Department of Labor set certain minimum requirements for procedures and notification when a plan administrator denies a claim for benefits. The notification must set forth certain information in a manner calculated to be understood by the claimant, including the specific reason for the adverse determination, reference to the specific plan provision on which the determination is based, and a description of the plan's review procedures. In cases of denied medical claims and disability claims, if an internal guideline or protocol was relied upon to deny the claim, it must be provided free of charge to the claimant upon request. Additionally, if the denial of benefits is based on a medical necessity or experimental treatment (or similar exclusion or limit) an explanation of the scientific or clinical judgment must be provided free of charge upon request. 29 C.F.R. § 2560.503-1(g).

With regard to the appeal of adverse benefit determinations, employee benefit plans "shall establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse benefit determination." 29 C.F.R. § 2560.503-1(h)(1). The claims procedures of a group health plan, for example, will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless the claims procedures:

• Provide claimants with at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;
• Provide for a review that does not afford deference to the initial adverse benefit determination and that is conducted by someone other than the individual who made the initial adverse benefit determination that is the subject of the appeal;
• Provide that the plan administrator or appropriate named fiduciary deciding an appeal of an adverse benefit determination that is based in whole or part on a medical judgment consult with a health care professional who has the appropriate training and experience in the field of medicine involved in the medical judgment;
• Identify the medical or vocational experts whose advice was obtained on behalf of the plan; and
• Provide that the health care professionals who are consulted by the plan or the plan's fiduciary were not involved in the initial investigation of the claim.

In addition to the federal statutory and regulatory requirements for ERISA health care plans, Indiana has implemented procedural guidelines for the handling or payment of claims for health care services and for the timely resolution of grievances. I.C. 27-8-28. Indiana Code section 27-8-28 provides that an insurer shall prominently display on all notices to covered individuals the toll free telephone number and the address at which a grievance or request for external grievance review may be filed, as well as the department, address, and telephone number through which a covered individual may contact a qualified representative to obtain information about the decision or the right to appeal. IC. 27-8-28-13(b) and 16(d)(4). Additionally, in the case of an appeal of a denial of a claim for benefits, an insurer shall appoint a panel of one or more qualified individuals to resolve the appeal. The panel must include one or more individuals who has knowledge of the medical condition, procedure or treatment at issue, is licensed in the same profession or has a similar specialty as the provider who proposed or delivered the health care service, and who was not involved in the initial investigation of the claim. I.C. 28-8-28-17(b).

Employee benefit plans, including plans providing long term disability benefits and healthcare benefits, must substantially comply with ERISA's regulations in processing claims for benefits. If the employee benefit plan administrator fails to substantially comply with these regulations in the initial investigation and determination of a claim or during the appeal process, the plan administrator may be found to have acted in an arbitrary and capricious manner, and the adverse determination may be deemed to be procedurally unreasonable by a court of law.

In disability insurance cases that are governed by the Employee Retirement Income Security Act ("ERISA"), courts have found that a disability insurance company's failure to consider an important aspect of a claimant's disability is evidence of an arbitrary and capricious decision.

For example, the court in Powers v. Nat'l Rural Letter Carriers' Ass'n Long-Term Disability Income Plan found that it was arbitrary and capricious for the disability plan to ignore completely the Plaintiff's contemporaneous statement that she had one or two bad days a week where she could not leave the couch. 2009 WL 1259378 (S.D. Ind. May 5, 2009).

In Powers, the Plaintiff's treating physician recommended that a functional capacity evaluation be performed to assess the Plaintiff's physical restrictions and limitations. However, the disability plan opted to make a denial without a functional capacity evaluation and instead relied upon surveillance video of the Plaintiff.

Another factor considered in determining the insurer's arbitrary and capricious decisionmaking was the disability plan's failure to show that there were jobs in Indiana that the Plaintiff could perform. Although the disability plan found jobs that are "prevalent in the national economy", the disability plan did not provide actual numbers and locations of jobs that the Plaintiff could perform. Id. at 5. Moreover, the jobs provided by the disability plan did not meet the accommodations that the Plaintiff requires as a result of her physical restrictions and limitations. Specifically, the disability plan did not find any jobs that would allow the Plaintiff to miss more than one day of work per month because of her health condition. As a result, the court in Powers determined that the Plaintiff met the requirements to continue to receive long term disability benefits and the disability plan was arbitrary and capricious in terminating her benefits.

Continue reading "Evidence of an Insurer's Arbitrary and Capricious Decision in Disability Insurance Cases" »

Attorneys fees in ERISA cases are awardable under 29 U.S.C. Section 1132(g)(1). "A court may award fees and costs under 1132(g)(1) as long as the claimant has achieved 'some degree of success on the merits." Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 3, 130 S.Ct. 2149, 2158 (2010) citing Ruckelshaus v. Sierra Club, 463 U.S. 680, 694 (1983). If the Court can fairly call the outcome of the litigation "some success on the merits" for the party claiming fees, then the claimant is eligible for an award of attorneys fees. There is a modest presumption in favor of an award of attorneys fees in ERISA cases in the Seventh Circuit. Fritcher v. Health Care Service Corp., 301 F.3d 811 (7th Cir. 2002).

In determining whether a fee award is appropriate, the Seventh Circuit applies two tests. The first test looks to five factors: (1) the degree of the offending party's culpability or bad faith; (2) the ability of the offending party to satisfy personally an award of attorney's fees; (3) whether an award of attorney's fees against the offending party would deter other persons acting in similar circumstances; (4) the amount of benefit conferred on members of the plan as a whole; and (5) the relative merit of the parties' positions. Bowerman, 226 F.3d at 592-93 (7th Cir. 2000)(citing Quinn v. Blue Cross & Blue Shield Ass'n, 161 F.3d 472, 478 (7th Cir. 2998)). The second test looks "to whether or not the losing party's position was 'substantially justified.'" Id. at 593 (quoting Quinn, 161 F.3d at 478).

Fundamental fairness and equity require an award of fees where an insurance company has been found to have abused their discretion in a disability, health insurance or life insurance case. As explained in Hooper v. Demco, Inc., 37 F.3d 287, 291 (7th Cir. 1994):

We note that the primary purpose of ERISA, to protect the participants in employee benefit plans, is achieved by 'establishing standards of conduct, responsibility, and obligations for fiduciaries of employment benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the federal courts.' ERISA Section 2(b), 29 U.S.C. Section 1001(b). To encourage aggrieved parties to seek redress under ERISA, the statute gives the trial court discretion to award attorney's fees to a prevailing party.

When considering whether to award attorneys fees in an ERISA case, the court must keep in mind that ERISA's purpose is to protect beneficiaries of employee benefit plans. Meredith v. Navistar Int'l Transp. Co., 935 F.2d 124, 129 (7th Cir. 1991).

Further, fee awards provide the only incentive for ERISA plan administrators to pay legitimate claims since ERISA jurisprudence does not permit plaintiffs to pursue punitive damages or extra-contractual damages when insurers abuse their discretion. Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41 (1987); Franklin v. H.O. Wolding, Inc. Group Health and Welfare Plan, 2004 WL 3059789, *11 (S.D. Ind., Dec. 8, 2004). ERISA is a law of equity (Great West Life & Annuity Insurance Company v. Knudson, 122 S.Ct. 708 (2002)) and without a fee award, the Plaintiff would not be made whole as equity requires. "[A] fee award is needed to take a step toward making the insured [claimant] financially as well off as she would have been if the insurer had acknowledged its contractual responsibility in the first place." Franklin v. H.O. Wolding, Inc. Group Health and Welfare Plan, 2004 WL 3059789, *11.

Reasonable fees are determined by calculating the "lodestar" which is the number of hours expended on the litigation multipled by the attorney's hourly rate. Anderson v. AB Painting and Sandblasting, Inc., 578 F.3d 542, 544 (7th Cir. 2009).

ERISA was enacted to promote the interests of employees and their beneficiaries in employee benefit plans and to protect contractually defined benefits. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 829 (2003). An ERISA plan is a "special kind of contract," in which there exists a "presumption of full judicial review at the behest of the [plan participants or beneficiaries]."Fritcher v. Health Care Service Corp., 301 F.3d 811, 816 (7^th Cir. 2002). Full disclosure of important rights and responsibilities under ERISA plans was a primary goal in the enactment of ERISA. In endorsing ERISA, the Congressional Committee on Education and Labor considered fiduciary duty and disclosure an "essential element" of employee plans. H.R. Rep. 93-533, p. 4645-4646 (October 2, 1973). The Committee specifically stated that disclosure requirements under the prior Welfare and Pension Plans Disclosure Act were insufficient and had not accomplished Congressional intent:

Experience has . . . demonstrated a need for a more particularized form of reporting so that the individual participant knows exactly where he stands with respect to the plan-- what benefits he may be entitled to, what circumstances may preclude him from obtaining benefits, what procedures he must follow to obtain benefits, and who are the persons to whom the management and investment of his plan funds have been entrusted.

Id. at 4649. In order to strengthen and improve the protection of participants in employee welfare benefit plans, ERISA was passed in 1974. Congress specifically recognized the importance of disclosure of information and transparency in welfare benefit plans, which includes providing plan participants with clear information regarding whether third party administrators have been given discretionary authority to make claims determinations.

Although ERISA creates a cause of action for plan participants to challenge the denial of benefits, the statute does not specify the judicial standard of review applicable to such actions. The Supreme Court has established that judicial review of an ERISA administrator's benefits determination is de novo unless the plan grants the administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). When the administrator has such discretionary authority, the court applies a more deferential standard, seeking to determine whether the administrator's decision was "arbitrary and capricious."Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 104, 111, 128 S.Ct. 2343, 2348, 171 L.Ed.2d 299 (2008); Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856, 860-61 (7^th Cir. 2009).

In determining whether a plan confers discretion on the administrator, the Court "review[s] the language of the plan de novo as we would review the language of any contract."Diaz v. Prudential Ins. Co. of America ("Diaz I"), 424 F.3d 635 (7^th Cir. 2005), citing Ramsey v. Hercules Inc., 77 F.3d 199, 205 (7^th Cir. 1996); see also Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 538 (7^th Cir. 2000) ("To determine whether a plan grants its administrator discretion, we must look to the language of the plan."). To lower the standard of review from de novo to arbitrary and capricious, "the plan should clearly and unequivocally state that it grants discretionary authority to the administrator."Perugini-Christen v. Homestead Mortg. Co., 287 F.3d 624, 626 (7^th Cir. 2002). Plenary review is presumed absent clear language to the contrary. Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7^th Cir. 2000). In doubtful cases, there is a presumption of full judicial review in favor of the claimant who did not draft the plan documents. Id. at 330.

When an ERISA plan grants discretionary authority to the plan administrator to make benefit determinations and construe the terms of the plan, the delegation of such power must be clear and forthright. In considering whether discretionary authority has been properly established, the critical question is notice: "participants must be able to tell from the plan's language whether the plan is one that reserves discretion for the administrator."Diaz I, 424 F.3d at 637, citing Herzberger, 205 F.3d at 332; see also Perugini-Christen, 287 F.3d at 626 (the plan should clearly and unequivocally state that it grants discretionary authority to the administrator). Providing plan participants with clear notice regarding the discretionary power of the plan administrator is imperative in keeping with ERISA's most fundamental principal of transparency and disclosure. As cautioned by the Seventh Circuit court, "An employer should not be allowed to get credit with its employees for having an ERISA plan that confers solid rights on them and later, when an employee seeks to enforce the right, pull a discretionary judicial review rabbit out of his hat."Herzberger, 205 F.3d at 332-33. Accordingly, in order to achieve the deferential standard of review for arbitrary and capricious decision-making by the plan administrator, the plan documents must provide clear notice to the disability plan participants that the plan administrator - or its third party claims administrator - has the discretionary authority to make such determinations. Absent clear notice, the court's standard of adjudication will be under de novo review.

Treating Physician Reports in ERISA Claims Under Seventh Circuit case law, information provided from the treating physicians in ERISA claims is likely superior to the information generated by an insurer's medical consultant, especially in a case where the consultant does not conduct a physical examination. Hawkins v. First Union Corporation Long Term Disability Plan, 326 F.3d 914, 917 (7th Cir. 2003), citing Bali v. Blue Cross & Blue Shield Ass'n, 873 F.2d 1043, 1048 (7th Cir. 1989); cf. Whitson v. Finch, 437 F.2d 728, 732 (6th Cir. 1971). Although an ERISA plan administrator may give weight to doctors who only do a medical record review, the Seventh Circuit recently held that a plan administrator's reliance on record-reviewing doctors who selectively criticize the overwhelming evidence provided by treating physicians is part of "a larger pattern of arbitrary and capricious decision-making." Holmstrom v. Metropolitan Life Ins. Co., 615 F.3d 758, 775 (7th Cir. 2010); see also Love v. Nat'l City Corp. Welfare Benefit Plan, 574 F.3d 392, 396-97 (7th Cir. 2009) (denial of benefits was arbitrary where "neither [denial] letter explained why the reviewer chose to discredit the evaluations and conclusions of Love's treating physicians" and "every doctor that personally examined Love concluded that she was unable to work") and Demaree v. Life Ins. Co. of North America, ---F.Supp.2d--- (S.D.Ind. June 1, 2011) (The decision to reject the opinion of a treating physician must have some rational basis).

In evaluating a claim for disability benefits, an insurer or plan administrator may also not summarily reject a treating physicians' opinion in favor of the opinion of its own consulting physicians without sufficient reason for doing so and an explanation to the claimant. Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771, 775 (7th Cir. 2003) ("Conclusions without explanation do not provide the requisite reasoning and do not allow for effective review."); see also Leger v. Tribune Co. Long Term Disability Plan, 557 F.3d 823, 823 (7th Cir. 2009) (rejecting, without explanation, important aspects of evidence presented by a claimant is an abuse of discretion). The Seventh Circuit explicitly requires ERISA plan administrators to provide claimants with an explanation as to why critical, supportive medical evidence is rejected. Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 695 (7th Cir. 1992) ("[T]he reasons for rejecting evidence must be articulated if there is to be meaningful appellate review."). Moreover, plan administrators may not "arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003) (emphasis added). The Supreme Court in Nord recognized that "treating physicians, as a rule, have a greater opportunity than consultants to know and observe the patient as an individual." Id. at 832.

An insurer or plan administrator's selective readings of the evidence that are not consistent with the entire picture is a hallmark of an unreasonable determination. Holmstrom, 615 F.3d at 777; see also Majeski v. Metropolitan Life Ins. Co., 590 F.3d 478, 483-84 (7th Cir. 2009) (holding that denial decision was arbitrary where insurer selectively relied on pieces of evidence to support denial of benefits, while that evidence in context demonstrated disability); Leger, 557 F.3d at 832-33 (denial decision was arbitrary where insurer "cherry-picked the statements from her medical history that supported the decision to determine her benefits, while ignoring a wealth of evidence to support her claim that she was totally disabled"). A determination to terminate or deny disability benefits will not be deemed reasonable unless the plan administrator or insurer gives sufficient weight to the treating physicians' opinion regarding his or her patient's functionality.