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San Francisco Long-Term Disability Insurance Blog

Conflict of interest asserted more often in disability lawsuits

Sean M. Anderson, a University of Illinois researcher, studied employee-benefits litigation that occurred from 2006 to 2010 and found that more than 60 percent of federal cases involving five kinds of benefits were based on long-term disability insurance claims. This finding is all the more interesting because private employees participated in long-term disability plans far less often than they did in the other kinds of benefit offerings. 

According to a news release on the university’s website citing federal statistics from 2009, only 31 percent of private employees joined long-term disability plans, as compared to short-term disability (38 percent), qualified pension plans (51 percent), medical benefit plans (52 percent) and life insurance (57 percent).

Court says LTD insurer reliance on surveillance video reasonable

At our law firm, we help people in their claims for short- and long-term disability insurance benefits based on a variety of impairments. As we have written about in this space, disability insurance companies now regularly use video, physical and Internet surveillance of claimants to gather evidence that might undercut their claims.

Judge orders disability insurer to trial on bad faith claim

We often write about denied or terminated disability insurance claims that claimants appeal to court under the federal law ERISA. ERISA usually applies when short- or long-term disability insurance policies are available to claimants through their employers.

 

Part 2: Dr. McCann’s occupation under his LTD policy

In Part 1 of this post, we told readers about a recent Third Circuit Court of Appeals case called McCann v. Unum Provident in which a doctor appealed his long-term disability insurer’s termination of his benefits. In that post, we explained how the Third Circuit Court of Appeals determined that the federal law called ERISA applied to the dispute. 

Today, we talk about the court’s determination of exactly what Dr. McCann’s “occupation” was for purposes of whether he was disabled under his LTD policy from performing that occupation. The court’s review was de novo, meaning it examined whether the administrator’s decision was correct under the “plain terms” of the policy.

Part 1: McCann v. Unum Provident and the ERISA issue

A preliminary issue in every federal court appeal in a denied or terminated claim for benefits under a short- or long-term disability insurance policy is whether ERISA governs. ERISA is the Employee Retirement Income Security Act, the federal law governing most benefit plans available through employers. 

ERISA imposes standards of fairness on disability insurers when they administer these policies, including deciding whether claimants are disabled and eligible for benefits. Whether ERISA governs impacts the standard of review the court applies when reviewing insurer actions as well as the kinds of damages available. Normally if ERISA does not apply, state laws governs.

Award-winning documentary “Unrest” about chronic fatigue syndrome

This summer, we published a post about important new research on chronic fatigue syndrome, a debilitating illness characterized by muscle pain, inflammation, cognitive impairment and overwhelming tiredness. As we described, the disease has been renamed as myalgic encephalomyelitis, or sometimes ME or ME/CFS, and the research shows promising progress toward an eventual laboratory test for CFS. 

In our law practice, we often represent people suffering from CFS who are fighting for long-term disability insurance benefits. LTD insurers are notorious for discounting complaints of impairment and pain based on CFS because of a lack of objective findings. As we reported in the earlier post, medical researchers are discovering objective markers of the impairment that are likely to contribute to developing a lab test to establish the existence of the illness. In the meantime, we advocate on behalf of our CFS clients to prove their reasonable and believable subjective complaints of pain, weakness and overwhelming fatigue that can prevent them from being able to work.

Cherry-picking evidence and how it hurts disability claimants

Disability insurers all too often engage in a behavior known in the industry and among claimants’ advocates as cherry-picking. Cherry-picking refers to a practice of insurance administrators or consulting doctors who selectively assign undue weight to particular records and ignore others when they analyze medical records to determine whether claimants are disabled and eligible for benefits. 

In cherry-picking, administrators or consulting doctors give undeserved weight to evidence that tends to minimize medical conditions and their symptoms. The other side of cherry-picking is to ignore or unreasonably discount medical evidence that supports claimants’ allegations of disabling illness, injury and symptoms.

The conflict of interest of a long-term disability insurer

We have talked here before about the inherent conflict of interest that a long-term disability insurance company has when it administers its LTD policies, especially when deciding whether a claimant is eligible for benefits. Today we will expand on this idea as federal courts have explained it. 

Federal courts across the country have written a rich tapestry of opinions in deciding appeals under ERISA of LTD insurance claim denials. (ERISA is the federal law that imposes standards and procedures based on fairness and transparency on insurers when they administer LTD claims.) These judicial opinions shed much light on how judges should consider the inherent conflict of interest in ERISA-governed LTD appeals.

Example of arbitrary and capricious LTD termination

An issue in every federal case that reviews a denied or terminated long-term disability insurance claim is what standard of review the court should apply. Normally, ERISA governs an LTD policy obtained through an employer. ERISA is a complicated federal law that sets standards and procedures for insurers and their administrators when they process LTD claims.

 

Court finds short-term disability denial arbitrary and capricious

On September 26, a U.S. magistrate judge in Ohio found that a plan administrator had engaged in an arbitrary and capricious decision-making process when it denied a Honda account representative’s short-term disability claim. 

Miller’s circumstances 

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