CIGNA Reverses Long Term Disability Denial of Woman with Multiple Musculoskeletal and Neuropathic Conditions

This office was once again successful on behalf of a client whose disability benefits were wrongfully denied.  These long term disability benefits governed by the Employee Retirement Income Security Act (ERISA), and insured by CIGNA, have now been granted.  Ms. B suffered from several conditions, including optic neuritis, sensorimotor polyneuropathy, cervical syrinx, osteoarthritis, foraminal stenosis, and cervical spondylosis, among other ailments.  Ms. B had originally filed a claim for short term disability (STD) benefits, which was denied.  Ms. B submitted her own appeal of the STD denial, which was ultimately unsuccessful.  After exhausting her appeal rights for short-term disability, Ms. B filed a claim for long-term disability benefits, which was denied as well.  At that point, Ms. B contacted our office for assistance in submitting an appeal of the adverse LTD decision.  After reviewing the policy and determining she did not need to exhaust STD benefits before applying for LTD benefits, we moved forward with an appeal of the LTD denial. 

CIGNA relied on the evaluation of a nurse case reviewer when denying Ms. B’s LTD benefits.  It used language we routinely see in CIGNA denial letters.  Specifically, it faulted Ms. B’s medical records with not including “measured range of motion/ROM limitations by goniometry or inclinometry and/or significant muscle strength deficits by manual muscle testing.”  Our office has seen this exact same language in many other CIGNA denials.  Our appeal emphasized the fact that the policy did not require these specific tests in order to establish disability and that CIGNA’s denial was based on incomplete evidence and a misunderstanding of Ms. B’s medical conditions. In preparing the appeal, our office obtained additional medical records, supportive opinions of her treating physicians, and a Functional Capacity Evaluation in order to accurately  establish Ms. B’s disability.  Throughout the appeal letter, we presented numerous arguments and thoroughly explained why CIGNA’s denial was wrong, arbitrary and capricious.

After evaluating the evidence presented, CIGNA reversed its decision and decided Ms. B was indeed entitled to long-term disability benefits, as her medical conditions precluded her from performing the material duties of her own occupation.  Our office will continue to oversee this claim for Ms. B with a goal to preventing a future denial of benefits.  If your claim is denied, please contact our office before submitting your own appeal. 

If you need assistance in submitting a thorough, well-prepared ERISA disability appeal, or require assistance with a claim under your private long term disability insurance policy, please contact the Law Office of Shawn E. McDermott. 

THE U.S. SUPREME COURT IS REVIEWING EQUITABLE REMEDIES UNDER ERISA

Many attorneys are anxiously awaiting the decision of the United States Supreme Court in the case of U.S. Airways, Inc. v. McCutchen, a case which will presumably define the scope of equitable remedies available to plan participants.  In the this case, McCutchen’s employer, U.S. Airways, sought reimbursement of medical benefits it had paid for McCutchen’s treatment (a plan beneficiary who was injured in a motor vehicle accident).  The monies sought by U.S. Airways were those received as part of McCutchen’s settlement in a related personal injury lawsuit.  In a claim pursued by the employer’s plan against McCutchen, McCutchen asserted equitable defenses – such as the common fund and unjust enrichment doctrines – which provide that the claimed subrogated interest of the employer for payment of medical expenses should not be honored until the plan participant is made whole (receives all recovery) before the subrogated interest is entitled to share in the funds from the settlement, or, at a minimum, that the plan’s recovery be reduced by the attorney’s fees and costs paid by the beneficiary in pursuing the personal injury matter which resulted in the recovery of those medical expenses.  In the case, U.S. Airways argued that it had an equitable lien by agreement which allows it full reimbursement of all paid medical expenses, regardless of the actual net recovery to the plan participant who was injured.  The essential issue before the U.S. Supreme Court is whether ERISA authorizes courts to use equitable principals to re-write contractual language and refuse to order participants to reimburse their plan for benefits paid, even where the plan’s terms give it an absolute right to full reimbursement.

A ruling in favor of the plan participant (McCutchen) in this case will dramatically impact the net recovery of injured persons who are able to obtain a settlement of their claim or a judgment against the responsible party.  If this occurs, the plan paying medical benefits on behalf of the injured person will be required to share in the costs of (common fund) attorney’s fees paid by the participant to obtain the recovery in the personal injury action or perhaps even allow the plan participant to argue that the plan is not entitled to any recovery if the injured plan participant has not been made whole or fully reimbursed by the settlement or judgment in the personal injury action. 

A decision from the U.S. Supreme Court on this case is expected in the summer of 2013. To review the transcript of the November 27, 2012 oral argument before the Supreme Court, please click here. 

CIGNA Regulatory Settlement Agreement

There may be good news ahead for disabled insureds seeking benefits from the CIGNA companies, comprised of Life Insurance Company of North America (LINA), Connecticut General Insurance Company, and CIGNA Health and Life Insurance Company.  These “participating companies” entered into a Regulatory Settlement Agreement (“RSA”) with the insurance departments of the states of California, Connecticut, Maine, Massachusetts and Pennsylvania.  Other state insurance departments including Colorado’s Insurance Commissioner have agreed to participate in the agreement.  This RSA followed an extensive market conduct examination investigating the way these CIGNA companies have handled disability claims over the past several years.  The terms of the settlement provide that the CIGNA insurers will improve their claims review process through enhanced claim procedures and, importantly, will review previously denied long term disability claims.  CIGNA has agreed to reassess prior claims denied from January 1, 2009 through December 31, 2010, although there is an exception for residents of California whose reassessment period stretches back to January 1, 2008.  This reassessment program is meant to determine if those prior denied claims would have been impacted, or resulted in a different outcome, if the enhanced claim procedures agreed to in the RSA would have been utilized. It remains to be seen how fairly this program is actually administered.

Similar to the multistate regulatory settlement agreement between Unum Group and state regulators in 2005, CIGNA now agrees that certain “best practices” must be adhered to in reviewing long term disability claims under group policies.  Such “enhanced” claim procedures include providing significant weight to social security disability awards, guidelines for the use of external medical sources, assuring that the professionals utilized by CIGNA in the processing of claims are selected fairly to avoid internal bias, and providing better notice to claimants of information that should be submitted in support of their disability claims.

The agreement with CIGNA requires it to pay fines and administrative costs to the investigating states.  Additionally, the agreement subjects CIGNA to ongoing monitoring of previously denied claims now being reassessed under this remediation program.  Perhaps more importantly, a press release from the California Department of Insurance states that CIGNA has set aside $77,000,000 for projected payments to insureds whose claims were not handled properly. 

If your CIGNA (LINA or Connecticut General) long term disability claim was wrongfully denied in your mind between 2008 and 2010, you may want to contact the disability attorneys at the McDermott Law Firm to discuss your circumstances.  We are willing to provide a free phone consultation and initial review of your claim to determine if we can be of assistance in guiding you through the reassessment process.  Simply because CIGNA has agreed to altered its claims handling procedures does not mean that your previously denied claim will be quickly, easily, or ever overturned.  We have extensive experience in handling disability claims on behalf of disabled individuals and are happy to discuss how we can assist in guiding you through this process.  

LIFE WAIVER OF PREMIUM-DON’T FORGET ABOUT IT

Since I am on the issue of life insurance coverage (see my other blog post of today’s date), I take this opportunity to remind all readers of a little known provision likely found in your employer-provided, group life insurance policy --- commonly referred to as “life waiver of premium” (“LWOP”).  I have yet to review a group life insurance policy which does not contain a waiver of premium provision.  This provision provides the employee with the right to continue with this life insurance coverage under the group policy if the employee has become “disabled.”  Such coverage will continue so long as this person continues to meet the definition of disability (as contained within the life insurance policy and not the definition found in an accompanying long term disability policy) and even if the employee is no longer employed with that employer.  In order to be “disabled” under the life insurance policy’s waiver of premium provision, one typically must prove the inability to perform the material and substantial duties of “any occupation.”  Whereas, the typical group long term disability policy contains a definition of disability, at least for the first 24 months of the claim, that only requires the participant to prove the inability to perform the material and substantial duties of their “own” or “regular” occupation.  This can be significant but not such a huge difference that an individual should not seek continued coverage under life insurance policy.

How to File an LWOP Claim

In order to obtain ongoing life insurance coverage under the waiver of premium provision, most employers or insurance companies will require that you submit a separate claim under the life insurance policy, specifically claiming ongoing coverage under the LWOP provision. 

Deadlines

There are deadlines for filing an LWOP claim.  Consult your policy.  These deadlines may be as short as 30 days or up to one year or greater.  Each policy is different.

Contact Us

When I meet with potential new clients who have suffered a denial of their claim for long term disability benefits, greater than 95% (or higher) of them will have no idea that their life insurance coverage can continue under the LWOP provision.  Check your life policy; know and pursue your rights.

BE SURE TO EXERCISE YOUR CONVERSION RIGHTS

When leaving an employer, an employee may have the right to “convert” group life insurance coverage into an individual policy.  Not all employer-provided group policies offer this conversion right but many do.  Most such policies provide the right to convert the group life insurance coverage into an individual life insurance policy within 31 days of receiving a conversion notice.  Some policies require that the policy be converted within a certain number of days from employee termination.

We have seen numerous incidents of either the employee not understanding his or her right to convert or, worse yet, not receiving notice from the plan or claim administrator (aka, the employer or the insurance company) of the right to convert.  Under such circumstances, a question arises as to whether the plan or insurance company is responsible for payment of life insurance benefits if the employee dies and the policy was not previously converted, and such employee never received notice of his ability or right to do so from the administrator.  In such circumstances, an argument exists that the administrator breached its fiduciary duty owed to the plan participant/employee due to the fiduciary’s failure to provide appropriate notification containing the life insurance conversion form.  Many courts have concluded (wrongly in our opinion) that such a breach of fiduciary duty does not result in a recoverable remedy under the Employee Retirement Income Security Act (“ERISA”), specifically ERISA § 502(a)(2).  Section 502(a)(2) permits civil actions for appropriate relief for breach of fiduciary duty but only holds those plan fiduciaries liable for losses to the “plan.”  In a recent unpublished opinion from the U.S. Court of Appeals for the Sixth Circuit, the court recently looked at this issue and determined that the surviving spouse of the deceased employee, who never received the conversion forms, was provided no remedy under the ERISA statutory scheme even assuming the breach of fiduciary duty claim could be proved.  The claimant in that case (Walker v. Federal Express Corp.) sought review by the United States Supreme Court.  The Supreme Court declined to review the appeals court decision.  So, despite a clear breach of the duty, the spouse received nothing.

What we learned from this ruling and others is that an employee must be mindful of his/her own employer provided benefits to ensure continued access to some of those benefits should he/she be terminated for any reason.  If you have a group life insurance policy and find yourself no longer working for that employer who provides such coverage, review your plan or policy language in detail to determine if you have the right to convert the policy.  You need to figure out the steps to be taken to convert this policy to individual coverage and file all necessary forms and applications in a timely manner.  Life insurance coverage is relatively inexpensive under these circumstances.  Do not miss out.

Contact Us

We are available for free consultations (in most situations) to answer ERISA disability and life insurance claims and denials.  Click here to enter our contact page. 

MY ERISA DISABILITY CLAIM APPEAL WAS DENIED; WHAT CAN I EXPECT NOW?

So there you are: you submitted an internal appeal of your denied long term disability claim with your insurance carrier or claim administrator and that appeal has been denied. (hopefully, you have used the services of a qualified and experienced disability attorney to submit your appeal – as the appeal is the most important stage of your entire case.)  Likely, your only option now is to file a lawsuit.  If your long term disability benefits are provided by your employer, which means that the EmployeeRetirement Income Security Act (“ERISA”) likely applies to your claim, then the amount of damages you are able to collect in a successful lawsuit might be surprisingly limited.  In most circumstances, the only benefits you might be able to collect is a lump sum recovery of your past due policy benefits, an order from the court requiring the insurance company or claim administrator to continue to monitor and process your claim in accordance with the plan’s terms (which might mean a future termination of benefits) and your attorneys’ fees.  In all likelihood, you will not be able to file a claim seeking damages for emotional distress, pain and suffering, a breach of the duty of good faith and fair dealing (bad faith) or even punitive damages.  These types of damages can be pursued if your disability claim is pursuant to an individual policy or one not governed by the ERISA laws.

Retroactive Benefits

Most often, successful ERISA disability litigation will result in the court awarding all past due benefits to be paid by the insurance company or plan.  However, these past due benefits may be limited to benefits due and payable up to the date of the denial.  In some circumstances, benefits may only be payable until there was a change in definition of disability (for example, when the policy language switches from “own occupation” disability to “any occupation”).  In the unusual circumstance, the judge may order a “remand” of the successful claim to the insurance company for further processing without the award of benefits.   Most courts will award interest on all past due benefits ordered to be paid.

Future Benefits

If you are successful in your ERISA disability litigation, it is highly unlikely you will be awarded future benefits in a lump sum.  Instead, the court will order the insurance company to pay you benefits into the future so long as you continue to meet the definition of disability applicable to your claim.  This order does not prevent the insurance company from subsequently terminating your claim.  Future terminations of previously litigation claims do happen.  If it appears to the insurance company that your disability is permanent and that payment benefits through the term of the policy (usually age 65 or your normal retirement age) is likely, then the possibility exists of reaching a lump sum buy-out of the remaining benefits with the insurance company.  The insurance company is of course not going to pay you the full amount of benefits payable and will instead offer you some percentage of the present value of that future flow of benefits.  Even if you have not been through the litigation process, and do not have an attorney, you should consult with a good ERISA or long term disability attorney to analyze the value of any lump sum offers received from an insurance company.

Attorneys’ Fees

If your claim is governed by the ERISA laws, attorneys’ fees can be awarded to the prevailing party.  An award of such fees falls within the discretion of the trial court judge.  In all likelihood, if you are successful in your disability benefits lawsuit, the Court will award reasonable attorneys’ fees to you. 

Settlement of Disputed ERISA Disability Cases

As is the case with all types of civil litigation, the majority of ERISA disability or life insurance disputes will settle before the court reaches a final determination of the dispute.  A settlement is usually achieved through the payment of a lump sum amount by the insurance company to you.  If this occurs, you will be expected to release any future right to coverage under your insurance policy and that you will dismiss your lawsuit.  Of course, the ability to settle your case depends upon many factors including the strengths of your claim for disability benefits, the factual support for your inability to function, the amount of benefits at issue, your age, and the willingness of the insurance company to resolve your claim. 

The above is meant to provide you with a simple overview of the possible results of your ERISA disability claim.  Feel free to contact our office if your claim has been denied and you require assistance in submitting the internal appeal with the insurance company (which we strongly encourage that you involve an attorney at this early process), or if your appeal has been denied and you have been informed that your next course of action is to file a lawsuit.

MetLife Reverses Long Term Disability Denial of Woman with Bipolar Disorder

This office was once again successful on behalf of a client whose disability benefits were wrongfully denied.  These long term disability benefits governed by the Employee Retirement Income Security Act (ERISA), and insured by MetLife, have now been reinstated.  Ms. S suffered from bipolar disorder, and had been receiving benefits for several years before MetLife callously and without notice terminated her claim.  In making its determination, MetLife ignored the clear opinions of Ms. S’s treating mental health care providers, and relied instead upon the opinion of an external reviewing physician who did not address the severity of Ms. S’s condition and did not take into account the letters written by Ms. S’s physicians.

Ms. S contacted our firm for assistance in preparing an ERISA long term disability appeal.  We obtained several pieces of supporting evidence in support of her disability, including opinion letters from her mental health care providers, demonstrating how and why the information MetLife had relied upon was incomplete and biased.  After presenting this material in a coherent appeal for submission to MetLife, the adverse benefits determination was overturned and Ms. S’s long-term disability benefits were reinstated. 

Our office will continue to oversee this claim for Ms. S with a goal to preventing a future denial of benefits. 

If you need assistance in submitting a thorough, well-prepared ERISA disability appeal, or require assistance with a claim under your private long term disability insurance policy, please contact the Law Office of ShawnE. McDermott.