Why Do I Need an Experienced ERISA Attorney to Protect My Long Term Disability Insurance Claim?

Long Term Disability insurance coverage and the plans involved are different than other employee offered insurance plans, where sometimes the threat of a lawsuit is enough to motivate an insurance agent to make things right for an insured

Long Term Disability insurance coverage and the plans involved are different than other employee offered insurance plans, where sometimes the threat of a lawsuit is enough to motivate an insurance agent to make things right for an insured. For long term disability claims, governed under ERISA (Employee Retirement Income Security Act), the insurance company is counting on the claimant to defend themselves and fail or give up because they don’t have the resources to take on a giant insurance company. They deny and terminate claims en masse, and clean up the mess as things proceed, knowing through experience that by sheer volume they win.

Reflexively, when we are wronged, we think of how to resolve it – even if through Court. But can you simply go to Court on an ERISA disability denial or claim termination? No. Only when your group disability insurance claim has exhausted all administrative remedies (all submissions to the insurance company who denied or terminated the claim), the only option is to go to court. In most cases, the case will be governed by ERISA (Employee Retirement Income Security Act) and must be litigated in Federal Court. Some group policies may not be ERISA and then a state court action, and potential additional remedies, might be available.

There are many unique aspects (mostly unfavorable to claimants that we help) and we address them in the process from the very beginning, as we develop our strategic approach and execution based upon the unique facts of each claim and relevant case law.   The Supreme Court has addressed ERISA disability issues over the years, most recently in Met Life v Glenn, a case which held in part that insurance companies were to be held to “higher than marketplace” standards.  But we also know from that case how the insurance companies suffer from a financial conflict of interest in deciding and funding the claims.  Litigation of ERISA cases is typically held either where the insurance company or employee benefit plan is located, or where the claimant is located.

I found Jason Newfield through an internet search for disability lawyers after my initial claim was denied. I spoke to a few disability attorney’s but he seemed the most knowledgeable and hands-on (working the case directly versus passing on to junior counsel). He was very thoughtful and professional and most importantly, was able to successfully resolve the claim. I would highly recommend him for disability issues if you have a similar need.

ERISA-governed long term disability insurance claim have many unique issues, including:

One of the most challenging aspects in an ERISA disability lawsuit is the standard of review that a federal court will apply when reviewing a long-term disability denial. The most favorable standard of review for a claimant is a de novo review. A de novo review essentially means that the judge will conduct a review of the entire administrative record and make a determination as to whether the claimant is entitled to disability benefits without considering other decisions, even if the fact pattern is the same. In every long-term disability lawsuit, we always look for the best argument for a court to apply a de novo review.  This is equivalent to the scale of justice and which side outweighs the other. 

The least favorable standard is the abuse of discretion standard which means that the judge can only reverse the insurance company’s denial of benefits if the judge believes that the denial of benefits was wrong and the insurance company acted arbitrarily and capriciously.   This is more akin to the smell test, and if the decision is not too smelly, the insurance company will win. 

Essentially, the judge must find that the insurance company acted unreasonably in order to reverse a disability denial. The judge will determine which standard of review to apply depending on whether or not the subject long term disability policy contains a “discretionary clause” that grants discretion to the insurance company to interpret the terms of the disability policy and determine eligibility for benefits. In every case we look for an argument to prove that the discretionary clause is invalid and a de-novo review must be applied. There are  numerous states that have made discretionary clauses illegal while others continue to consider this ban.

The inability to present any new evidence or testimony after filing an ERISA lawsuit is a huge disadvantage for claimants and for their lawyers.  It underscores the critical importance of the ERISA appeal process. The Federal Court judge deciding the ERISA case doesn’t have the opportunity to make a face-to face-determination of the validity of the claimant’s disabling complaints, nor of the insurance company’s decision maker.

Unfortunately, it is akin to the two dimensional consideration of medicals, which often lacks the personal side to appreciate nuanced issues.  We are limited (though we push and have succeeded) in securing a deposition of the individual at the insurance company who decided to deny or terminate the ERISA claim.

Our clients have a significant advantage when we prepare the ERISA appeal as we submit every single piece of information and develop evidence which we would want a Federal Court judge to review in the event we must bring a lawsuit.   In litigation, we often effort to secure discovery, including depositions, to provide the court with further insight into the decision and the process, to impact the Court’s analysis.

Having spent many years trying cases and picking juries, one of the challenges I have with ERISA is the inability to try to connect with a juror about the compelling issues of my clients.  However, we have developed strategies to overcome these challenges for ERISA cases through our ERISA appeal formula for success.  Under ERISA, a disabled LTD claimant has no right to a jury trial – leaving us one option: an oral argument before the Federal judge after briefing and submitting motions and briefs in support of our claims and contentions.

This makes the administrative appeal and our formula to develop a compelling submission and to present our trial on paper critically important. This sets us apart from peers who submit support without the level of advocacy necessary for success at this stage. 

We believe our success in ERISA appeals is a result of a combination of the reports and objective testing we secure and the powerful information and arguments we present to the court.

When an insured is compelled to bring their claim to Federal court, the array of remedies which are available are considered underwhelming because they are so limited. There are no punitive damages, no claims that are non-ERISA claims (they are pre-empted by ERISA), and even the ERISA claims provide limited “relief” to an aggrieved claimant – who was compelled to pursue Federal Court litigation due to a denied or terminated long term disability insurance claim. 

Claimants in ERISA lawsuits argue that the insurance company breached their fiduciary duty, failed to provide a full and fair review, and departed from standards of reasonableness, and that the insurance company must pay benefits owed to the claimant, and continue to pay future benefits.

However, the court can only award past due benefits and cannot make the insurance company award future benefits in most cases. A result of a claimant “victory” in litigation often is the unfortunate outcome that they return to the insurance company claim management. 

Other results include the court deciding to “remand” the case back to the insurance company and gives them another chance to review the claim – without yet paying benefits.   Pursuant to the court’s findings, the insurance company often has a road map of what might pass judicial muster.  In many cases this will result in a reversal of a claim denial, but this roadmap provides the insurance company an unfair new chance to review the file and work to support its claim decision, while the claimant waits several more months for the insurance company to review the claim.

Claimants suffer significant financial losses and fiscal damage as a result of a disability denial, however, the remedies permitted under ERISA do not permit any claim or financial compensation for any other damages other than the benefits owed – and potentially attorney’s fees for the litigation.

Put simply, insurance companies have no incentive to be fair during the claim process, as they are not held liable for any debt, foreclosures, credit score reduction, loss of car, or homelessness that can happen as a result of a wrongful disability denial. Furthermore, a claimant has no right to receive any punitive or bad faith damages when the claim is governed under ERISA law.  These limitations on damages is a powerful reason insurance companies do not have big concerns about the financial impact of a claimant winning a disability lawsuit.  The model to deny or terminate wide swaths of claims is unfortunately rewarded, with little disincentive and all the incentives.

The award of attorney fees in ERISA lawsuits is at the discretion of the judge and is often not fully rewarding to the attorneys taking on this mountainous challenge against large insurers. The Federal court judge may award attorney fees if they determine the claimant had “some degree of success on the merits,” but even that term is ill-defined and subject to challenges.  Moreover, the amount of hours expended to secure success, and often the hourly rate of the attorneys, become topics of challenge. 

Attorney fees are litigated extensively after the court makes a finding in favor of the claimant. In most cases a claimant will receive interest on the past due benefits that have not been paid. In most claimant victories the insurance company will appeal the decision to the Court of Appeals, yet the attorney fees and interest owed will continue to accrue.  Claimants who return to the claim process become entangled back with the same insurance company that has treated them poorly, but is a result better than losing in litigation, due to the above nuanced issues.

Most claimants we speak to want to immediately sue their disability company upon receiving a denial, or termination of their claim.  However, because of ERISA, and the requirement that a claimant must exhaust administrative remedies prior to being allowed to bring a lawsuit, ERISA does not allow a claimant to file an ERISA disability lawsuit until remedies have been exhausted or would be “futile.”

Failure to file an ERISA lawsuit at the appropriate time can result in the entire claim being dismissed.  On the other hand, claimants also need to be mindful of statute of limitations issues, which prescribe when a claimant is able to file a lawsuit PRIOR to when it would otherwise be time barred, and not permitted.

Developing support for an ERISA disability claim at the initial claim is critical to ensuring success for the claim. 

Developing the medical support is the most important aspect of the disability insurance claim process, as every claim MUST be supported by a treating doctor. To develop this support with your doctor it is often beneficial to work with an experienced disability insurance attorney.  Identifying the functional limitations which impact a person’s functional ability to perform their work is what is required to support the claim. Identifying whether testing is required and what specific testing is necessary is critical to ensuring claim success. 

These issues must be identified by the doctors to support the claim, and educating the treating doctor on these issues will make or break the claim. The work of an experienced disability insurance attorney adds value to the process through this work.

Developing the vocational support for any claim is critical, as most often the disability insurance company is NOT going to adopt your version of what you do as YOUR occupation.  Both, because the policy may not specifically require such an analysis, and because what is often claimed to the duties may not be how the duties are defined or considered under policy language or in reality.

Own Occupation typically is defined as the material and substantial duties of one’s occupation.  However, it is not how the disabled insured did their “specific” job for their actual employer; instead, it is how this job is “typically” performed within the national economy.  And despite the potential wide disparity in how an occupational class might be performed throughout the country, it is often difficult to have the disability insurance company appreciate those issues.

One success story on these issues involved our client who was a Plant Manager, and worked in the Paint Industry, as his employer manufactured paint.  Hartford took issue with his impairment, which limited him to only some sedentary capacity of functionality.  Hartford terminated his claim, stating that he could work full time in a sedentary job – like “his occupation.” The success occurred in educating Hartford as to its ERISA obligations to properly consider our client’s industry and recognize that his required capacity was not able to be met due to his medical conditions.   

For the past 24 years, I have litigated ERISA disability lawsuits in Federal Courts.  We often can elect to file a lawsuit from options where best to file the lawsuit, because despite ERISA being a federal law, each circuit has its own unique nuances to how the cases are handled.  While many lawyers do not like to practice in Federal Court, we have many published cases from our federal court litigation.  We prefer the pace of litigation there, and the approach taken to streamline issues and not tolerate delays.