Articles Tagged with ERISA

Dan is 60 years old and was a cable splicing technician with a telecommunications company, where he worked for approximately 29 years until late 2015, when he was forced to stop working due to the debilitating effects of bilateral knee osteoarthritis and cervical and lumbar spondylosis. Since that time, he has also undergone total replacements of both knees and developed severe, debilitating chronic cervicogenic/occipital headaches that occur on a daily basis; moderate to severe bilateral carpal tunnel syndrome; and increasingly severe lower back and leg pain that persists despite a lumbar spinal fusion surgery in early 2018.

When Dan was forced to stop working, he applied for long term disability (LTD) benefits through his employer’s disability plan, which was insured by Prudential. Under the terms of the Prudential policy, Dan was entitled to receive LTD benefits for up to 24 months if he was unable to perform the material duties of his own occupation. Because Dan’s medical conditions prevented him from working in his own occupation as a cable splicing technician, Prudential awarded him LTD benefits, which it paid until May of 2018.

However, the terms of the Prudential LTD policy dictate that after 24 months of receiving LTD benefits, Dan was only entitled to continue receiving benefits if he could prove that he was disabled from performing any gainful occupation for which he was “reasonably fitted by education, training or experience.” As a result, Prudential terminated Dan’s benefits after 24 months, based on a vocational review that concluded that he was able to perform certain sedentary work for which he was qualified by his education and experience.

O’Ryan Law firm has extensive experience representing clients in appeals and litigation under the Employee Retirement Income Security Act of 1974 (ERISA), which governs most claims for benefits under employer-sponsored insurance plans. Earlier this year, the US Department of Labor amended its regulations under ERISA, providing claimants with some additional rights during the process of appealing denials of benefits under plans governed by ERISA.

One important additional right granted under the new ERISA regulation is the opportunity to review and respond to any additional evidence considered by an insurance company during an appeal of a benefits claim denial. This means that if a claimant appeals a denial or termination of benefits and the insurance company sends the file to a reviewing physician, the claimant has a right to read and respond to the report of that reviewing physician before the insurance company can make its final decision on the appeal. O’Ryan Law firm recently took advantage of this new protection to obtain short term disability (STD) benefits for a client who had previously had her STD benefits terminated.

Kim M was a Repair Service Attendant at a large telecom company and was forced to stop working in early 2017[1] as a result of failed back syndrome, multilevel degenerative disc disease, lumbar facet arthritis, and spondylopathy. After she was unable to return to work, she was awarded STD benefits under her employer’s disability plan, which was administered by Sedgwick. However, Sedgwick terminated Kim’s STD benefits several months later, claiming there was no longer sufficient medical evidence to support her claim. In the letter explaining its termination of Kim’s benefits, Sedgwick relied on the opinions of two reviewing physicians who asserted that Kim was not disabled.

Earlier this month, Judge Richard Posner abruptly announced his retirement from the United States Court of Appeals for the Seventh Circuit after more than 35 years on the bench, effective the following day. Judge Posner, a prolific writer and author of more than 3300 judicial opinions and nearly 40 books, was one of the most prominent appellate judges in the United States and the most-cited legal scholar of the 20th century, according to a survey by the Journal of Legal Studies. He carefully drafted his legal opinions to be easy to read and understand, and his signature concise, frank, and often humorous writing style helped to modernize the discipline of legal writing, presenting a stark contrast from the overly formal, long-winded “legalese” that had long dominated the legal field.

Just over three months prior to his retirement, Judge Posner authored an opinionKennedy v. The Lilly Extended Disability Plan, 856 F.3d 1136 (7th Cir. 2017), awarding substantial long term disability benefits to Cathleen Kennedy, an O’Ryan Law Firm client who had been forced to stop working in her position as an HR executive for Eli Lilly & Company as a result of severe fibromyalgia, a nightmarish condition characterized by chronic widespread musculoskeletal pain and fatigue that often presents with psychosomatic symptoms such as sleep and memory issues, anxiety, and depression. Unfortunately, because many of the primary symptoms of fibromyalgia – especially pain and fatigue – are difficult to objectively measure, the condition has historically been misunderstood and often goes undiagnosed due to the lack of a reliable means of testing for it. As a result, those who suffer from fibromyalgia also frequently must deal with the frustration caused by doubts about the validity of their condition and symptoms by friends, family, and sometimes even their healthcare providers.

Fortunately, recent scientific advances in the understanding of fibromyalgia have led to increasing acceptance of the validity of the condition and its profound impact on the lives of those who suffer from it. Judge Posner recognized this in his opinion, noting that Lilly itself markets a treatment for fibromyalgia and has been advised by one of its own physicians that fibromyalgia “is not only very common but is typically also very disabling” and that many victims of fibromyalgia “end up needing to stop working because of this condition.” Nonetheless, Lilly had terminated Ms. Kennedy’s long term disability benefits after she had been disabled for nearly four years due to fibromyalgia, despite the fact that her primary treating physicians had declared her to be permanently disabled, largely because there was no objective laboratory data proving the validity of her symptoms. Lilly claimed that although Ms. Kennedy was unable to work full time in her previous executive-level position, she could still work part time in one of “various non-executive positions” in her field.

O’Ryan Law Firm, on behalf of Plaintiff Shane C., recently filed a federal lawsuit against The Prudential Insurance Company of America (“Prudential”). The Plaintiff was employed as Senior Vice President Regional Manager with Custard Insurance Adjusters, Inc. which made him eligible for disability benefits under the Custard Insurance Adjusters, Inc. Long Term Disability Plan (the “Plan”).  As a Regional Manager, Shane was required to travel to 9 different offices throughout the Midwest to oversee and supervise these 9 offices.

In Shane C. v. The Prudential Insurance Company of America and Custard Insurance Adjuster, Inc. Long Term Disability Plan, the Plaintiff filed a lawsuit under ERISA to gain the long-term disability benefits he was entitled to under the terms of the Prudential policy.

Facts of the Case Against Prudential

Many Indiana employees receive group disability insurance coverage through Aetna. Headquartered in Hartford, Connecticut, Aetna is a large disability insurance company that is currently in the Fortune 100. O’Ryan Law Firm has successfully represented many clients whose disability insurance benefits have been unfairly denied or terminated by Aetna.

Short Term Disability Benefits

Aetna’s short term disability coverage pays benefits after a short elimination period (often a week long). Short term disability benefits usually last three to six months. During Aetna’s investigation of the short term disability claim, it is common for Aetna to gather medical records, gather information about the claimant’s job, require statements from treating providers about the claimant’s ability to work and expected duration of disability, and have internal medical consultants review all medical evidence. If the individual is approved for short term disability benefits through the maximum duration of the policy, then they may apply for long term disability benefits.

Long Term Disability Benefits

After an elimination period that is typically the length of the short term disability period, the claimant may apply to Aetna for long term disability benefits. When a claimant receives long term disability insurance through a private employer, their claim is usually governed by the Employee Retirement Income Security Act (“ERISA”).

In addition to information already gathered during the short term disability claim, Aetna will request updated medical records and statements from treating providers, may perform a vocational analysis, and may have internal medical consultants or external medical consultants review the medical evidence. It is very common for long term disability policies to require that the claimant prove disability from their own occupation for the first 24 months of long term disability benefits and then require that the claimant prove disability from any occupation after 24 months of long term disability benefits.

During the long term disability claim, it is more common for Aetna to utilize claim review tactics such as referring the claimant for an Independent Medical Examination (“IME”), contracting private investigators to perform surveillance of the claimant, contracting peer reviewing physicians to review evidence and call the claimant’s doctors, and perform a Transferable Skills Analysis to see if the claimant can return to work in a different job. If a claimant is approved for long term disability benefits, it is likely that Aetna will urge the claimant to apply for Social Security disability benefits. Aetna may even refer the claimant to one of its vendors to represent them in their Social Security disability claim.
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The Employee Retirement and Income Security Act (“ERISA”) mandates that insurance companies and claims administrators provide claimants with the specific reasons for the denial or termination of employee benefits and the reasons for the denial must be in writing. See Militello v. Cent. States, Se. and Sw. Areas Pension Fund, 360 F.3d 681, 688 (7th Cir. 2004), cert. denied, 543 U.S. 869 (2004). The Department of Labor has promulgated regulations under ERISA which require certain information to be contained in a denial or termination of benefits letter. Specifically, 29 C.F.R. §2560.503(g) states:

Manner and content of notification of benefit determination.

(1)….The notification shall set forth, in a manner of calculated to be understood by the claimant –

(I) Reference to the specific plan provisions on which the determination is based;

(II) 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;

These requirements ensure that when a claimant appeals a denial to the plan administrator, he or she will be able to address the determinative issues and have a fair chance to present his case. Halpin v. W.W. Granger, 962 F.2d 685 (7th Cir. 1992). Describing the additional information needed, as required by this section, enables a claimant to gain a better understanding of the inadequacy of his claim and to gain a meaningful review by knowing with what to supplement the record. Wolfe v. J.C. Penney Co., 710 F.2d 388 (7th Cir. 1983).
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In Kenseth v. Dean Health Plan, Inc., 722 F.3d 869 (7th Cir. 2013), Ms. Kenseth had gastric band surgery in 1987. Eighteen years later, Kenseth’s physician recommended a second operation to address the severe acid reflux and other serious health problems that had arisen since the gastric band surgery. The medical policy specifically excluded treatment for morbid obesity; however, when Ms. Kenseth called to get approval for the second surgery, a customer service representative told Kenseth over the phone that the medical plan would cover the procedure subject to a $300 co-payment. Subsequently, all of the medical claims related to the second surgery, totaling approximately $78,0000, were denied by the health plan as being related to morbid obesity.

The Court was troubled by the health plan leading Kenseth to believe that the second procedure would be covered when Kenseth called for certification and then denying the claims after the surgery. The Court explained that fiduciaries have a duty to disclose material information to plan participants, which includes a duty not to mislead and an affirmative duty to communicate material facts affecting the interests of plan participants. Although negligence of the individual in supplying advice is not actionable as a breach of fiduciary duty, a fiduciary may be liable for failing to take reasonable steps in furtherance of an insured’s right to accurate and complete information.

The court in Kenseth reversed the district court opinion noting that where the defendant, by encouraging plan participants to call for coverage information before undergoing procedures, by telling plaintiff that defendant would pay for the procedure, and by not alerting plaintiff that she could not rely on the advice she received, lulled plaintiff into believing that defendant would cover the costs of the procedure…and where plaintiff did not obtain alternate coverage because she believe she was covered, plaintiff could seek make-whole money damages as an equitable remedy under § 502(a)(3) if the administrator’s breach of fiduciary duty caused her damages. The Court seemed most bothered by the fact that there was no warning in the medical plan to plan participants that they could not rely upon the advice given to them by the customer service representatives nor was there any clear explanation given as to how a plan participant could obtain a definitive answer on whether a particular procedure would be covered. The Seventh Circuit ended up remanding the case to the district court to determine whether there was a breach of fiduciary duty, whether the breach was the cause of any harm to plaintiff, and what form of equitable relief was appropriate in light of circumstances of case.
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When a person with a disability is completing his or her application for long term disability benefits, they may not realize the terms they must meet in order to receive disability benefits. While long term disability policies can vary greatly, there are some common provisions found within the policies. The below provisions are commonly found in long term disability policies, but please carefully review your policy to learn the specific requirements of receiving long term disability benefits.

Definition of Disability Every long term disability policy will include a definition of Disability or Total Disability. It is common for this definition to be broken into two parts. Often, the first part defines disability as an injury or illness that prevents the claimant from performing the duties of his or her own occupation. The second part pertains to the disability after a set time period, such as 24 months. This second part defines disability as the same injury or illness that prevents the claimant from performing the duties of any occupation.

It is also worth noting that there can be important terms within the definition of disability. For example, some definitions define “own occupation” as one that is performed in the national economy and can be found in the Dictionary of Occupational Titles. Another example is the definition of “injury” or “illness”, which may exclude conditions such as alcoholism or injuries from self-harm. The term “any occupation” may be defined as an occupation that the claimant’s experience and training reasonably allows. Because of the important terms within the definition of disability, you will want to carefully review the policy’s definition of each term, so that you fully understand the requirements within the definition of disability.

Elimination Period and Other Requirements Many definitions of disability include more requirements than those mentioned above. One of the most common additional requirements is that a claimant meets an elimination period. An elimination period is usually defined as a set amount of time (such as 180 days) that a claimant must prove to be disabled before becoming eligible for long term disability benefits. An elimination period is important in two ways: 1) a claimant must provide medical documentation showing that they were disabled during this time frame and 2) a claimant will not receive long term disability benefits until the elimination period is exhausted.

Because so many variations in the requirements of disability exist, it is crucial to examine the entire long term disability policy carefully. One common requirement in disability policies is that the insured’s disability prevents him from earning 60% or more of his previous earnings (this provision may also allow a person to work part-time, but still qualify for long term disability benefits). An insurance policy could require that a claimant maintains regular treatment with his physician. Other policies may even require that a disability be supported by objective evidence, such as blood tests, x-rays, or MRIs. Some policies may require that a person be approved for disability benefits by the Social Security Administration.
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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.
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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:
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