WIE Season 3 - Hot Topics in ERISA Long Term Disability Claims

In this Episode of Winning Isn't Easy - Nationwide Long Term ERISA Attorney Nancy L. Cavey talks about some HOT TOPICS in the ERISA LTD world that are trending right now among the disability world. Listen in!

"Winning Isn't Easy" is a podcast dedicated to exploring the complexities of the Employee Retirement Income Security Act (ERISA) long-term disability world. Each episode, we delve into the challenges and triumphs of navigating this intricate landscape and bring to light the key issues affecting disabled individuals seeking benefits under ERISA. Get ready to listen in on a captivating listen as we uncover the truth behind "Winning Isn't Easy."

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Transcript

Nancy L. Cavey: 0:15

Hey, I'm Nancy Cavey. I'm a national ERISA disability attorney and an individual disability attorney. I wanna welcome you to Winning Isn't Easy. Before we get started with this episode, I've gotta give you a legal disclaimer. This episode is not legal advice, but I will tell you, nothing will ever prevent me from giving you an easy to understand overview of the disability insurance world, the games, the disability insurance carriers play, and what you need to know to get the disability benefits you deserve. So off we go. Today's episode is what I call the Hot Topics episode. I read all of the disability insurance, uh, cases in the United States, and I, uh, like to do hot topic issues when I see trends because I want you to be educated about what I'm seeing in, uh, cases that are litigated. I think we can learn lots of lessons that will improve our chances of getting disability benefits and will minimize our mistakes. So we're gonna walk through four topics today. First is how the date of your hire and the effective date of your disability, our keys to overcoming a preexisting condition clause in your disability insurance policy. We're gonna start there because that's one of the number one defenses to a claim. Number two, I'm gonna answer the question of whether disability insurance companies who finally decide to pay your benefits actually owe you interest. Because this is a question I get a lot. Also, I am going to answer the question about what happens to my ERISA disability insurance, uh, benefits if I get fired. And then lastly, I'm gonna talk about how a court ruled that filing a claim for disability insurance was barred when the policy holder was talking out of both sides of their mouth by following an employment discrimination claim based on accommodations, yet on the other hand claimed that they were disabled. All right, we're gonna take a break, ready to get started. When we come back, we'll cover these topics.

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Nancy L. Cavey: 2:34

Welcome back to Winning Isn't Easy. The first thing I'm gonna talk about is the date of your hire and the effective date of your disability. Our keys to overcoming a preexisting condition clause. The Disability Insurance Denial toolbox is full of denial tools and one of the favorite is the preexisting condition exclusion. What is the preexisting condition? Exclusion? There's no uniform preexisting condition clause, but I'm gonna give you an example of a typical clause and the clause will probably go something like this. You're not covered for disability caused or contributed to by a preexisting condition or medical or surgical treatment of a preexisting condition unless on the date you became disabled, you have been continuously insured under the group policy for 12 months. Preexisting condition means a mental or physical condition for which you have done any of the following. Consulted a physician or other licensed medical professional received medical treatment services or advice, undergone diagnostic procedures, including self-administered procedures, taken prescription drugs, or medication B, which as a result of any medical examination, was discovered or suspected at any time during the 90 days just before the date your insurance became effective. And it went on to say that during the benefit waiting period and their own occupation period, you're required to be disabled only from your occupation. Now, whew, that's a lot there and let's sort of take this apart. And to do that, I'm gonna tell you the story of Lucy Esca found in the case of Esca versus Standard Insurance Company. It's a Louisiana case. She suffered from psoriatic arthritis, lupus, migraine headaches, fibromyalgia, depression, and anxiety. But many of these conditions predated her application for disability insurance and could legitimately be excluded as pre-existing conditions. When she applied for her disability benefits, standard denied the claim under the pre-existing condition clause. Now, the central issue in this case was when she was hired, and consequently, when her long-term disability benefits became effective, the court found that standard used a date of hire that was probably incorrect, but guess what? She never challenged the hire date during the internal administrative review process that would've allowed standard to get the right information, address the issue, and address the discrepancy. And as a result, the court said, well, you know, we can't award benefits. We're just gonna have to send this back to standard to resolve the discrepancy. We're gonna have to get this clarification from your employer. Now, what that means practically is it if her claim is denied again, she's gonna have to file another appeal and perhaps end up back in court. But this is an easy mistake that should have been corrected. The four things that should have been done on appeal are the following. She should have obtained verification from her employer as of the date of the hire. She should have obtained a copy of her personnel file documenting her application for employment and her date of hire. She should have obtained, uh, copies of material in her personnel file that included the date she became eligible for her long-term disability, uh, benefits and coverage. And that could have been also through the form of a a summary plan description. But lastly, she should have looked at her pay stub to determine the data on which any deductions began for her disability insurance. Those things would have established not only the correct date of hire, but the effective data, the policy. Now, once she did that, once she knows the period of time in which she's gotta to look backwards, if you will, she should have gotten her medical records and her pharmacy records and analyzed every one of that laundry list of her medical conditions. She should have determined which medical conditions were excluded and which medical conditions could be developed as the basis of the claim. It ended up basically being a, uh, Heinz 57 type combination of a lot of things that probably were not properly the basis of her claim and probably were not well developed. Remember, she's required to prove that she's disabled during the elimination grid. She's got the burden of proving which medical condition is the basis of her reclaim, that the medical condition was in fact disabling as that term's defined by her policy and that she remained not only disabled during the elimination period, but thereafter. And any one of these points, uh, in time are proof points and if she doesn't meet them, can be the legitimate reason for a claims denial. This can be really hard to do if you don't know the dates you're working with and you don't know what medical conditions are excluded. I think if these steps have been taken, the court would've been able to rule on standard's application of the preexisting condition clause and determine her entitlement to benefits instead of sending it back to standard. What a big mistake. Let's take a break. Welcome back to winning Isn't Easy. Let's talk about whether the disability insurance company, uh, who finally decides to pay your benefits has to pay you interest. Now, unfortunately, the answer is no, unless you've prevailed in a lawsuit against your disability carrier. Under the Employee Retirement Income Security Act of 1974, known as erisa, a prevailing party is entitled to interest on the benefits that are awarded by the court, but you're not entitled to interest simply based on a claim denial and then the decision of the carrier. To pay benefits. You have to file an ERISA lawsuit and win before you even get a chance at interest. Now, district courts can award prejudgment interest on an award of benefits at its discretion. The level of interest provided by law is the average, oh, I'm sorry, is the weekly average one year constant maturity treasury yield as published by the Board of Governors of the Federal Reserve System for the calendar week preceding the date of the judgment? Obviously, in today's economy, interest rates are exceptionally low, uh, and there won't be much in the way of interest. Now alternatively, a trial judge can, based on substantial evidence, determine the equities in your case, uh, require a different and a higher rate. Now, there's some reasons why a court might do that. One could include the fact that you had to withdraw funds from your investment account or forgo investment opportunities. And another more compelling reason is that you lost your house, your car, your health insurance, or you had to borrow money from your family and friends. So it's only in the situation where you prevail in federal court where you have the potential of getting interest. I don't want a disability carrier to rob you of your financial peace of mind, but I don't want you to have unrealistic expectations of what the disability carrier is going to owe you. We're basically gonna owe you the benefits that were due to you, period. Interest only gets awarded if you're successful in court and at the discretion of the judge. Got it? Okay. Let's take a break.

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Nancy L. Cavey: 10:32

Welcome back to Winning Isn't Easy. I'm often asked as a hot topic, what happens to my ERISA disability insurance or plan benefits if I get fired? Well, it depends. The answer starts with your policy or plan. What does the policy or plan say about termination of employment? Now, most of the time, a termination of employment will have no impact on the payment of your disability benefits. But let's take a little different twist or approach to this. What does matter is that you continue to prove that you're disabled as that term is defined in your policy or plan, and you continue to get medical treatment by a physician that's willing to fill out the paperwork. I think the reality is that being fired when you're on claim has no impact on your disability benefits, but not getting appropriate and regular medical treatment or not having a physician complete the paperwork will kill your case every day. Now, I think that that potentially can be hard if you are fired and you lose your insurance coverage. So before you stop work and apply for benefits, I think you should be thinking in ahead because at some point in time you're gonna lose your job. Either you're gonna be terminated, uh, by the, the carrier because they no longer have a position or your F M L A has run, run out, and you're gonna lose coverage unless you can afford to to pay the COBRA coverage. So before you stop work and apply for benefits, I think you mean to be looking at what's the cost of the COBRA coverage conversion gonna be? Is there other alternative coverage in the health market or can you get on your spouse or partner's insurance? Now there's no doubt that it's gonna be expensive, but you need treatment and you need that as proof of your disability. I think the time to get your questions answered about filing a disability insurance claim is before you stop work and apply for your benefits. Now, I think another twist on this is the situation where you are working while you are disabled and then you get fired or you're laid off. That can be a disaster for you. Why can it be a disaster? Because if you are working while you're disabled but not losing any wages, the disability carrier is going to say, we don't owe you any benefits. You weren't disabled under the terms of the policy. And of course, once you're fired, you immediately lose your disability insurance coverage and then you find that you're no longer insurable based on your medical condition. So if you sniff, if there's something in the wind or you just get a sense that you're going to be fired and you're working while disabled or you just haven't gotten around to applying for disability, it's time to pull a plug. Get your doctor to take you out, work and file your disability, uh, claim before you get terminated. Got it. Let's take a break. Welcome back to Winning Is and Easy. Let's talk about a disability policy holder who was talking out of both sides of his mouth. What do I mean? I'm gonna tell you about a case where the disability policy holder, uh, was claiming that they were disabled and entitled to benefits because they were unable to work, and on the other hand, had filed an employment discrimination claim against the employer. Filing inconsistent claims can backfire on a disability policy or plan beneficiary. And I'm gonna tell you the story of Mr. Frost. Mr. Frost was a voluntary, a volunteer firefighter, an emergency respondent. He was injured in 2007 when a burning building collapsed on him. He sustained horrific injuries. He had fourth degree burns over 60% of his body. He had an amputation of his left arm and his right leg. Fortunately, he was insured by Providence and under the terms of the policy, he was eligible for up to five years of own occupation benefits. V was unable to perform his own occupation and thereafter was only entitled to benefits if he couldn't perform any occupation. In 2017, his doctors stunningly said he no longer had any restrictions, limitations. I mean, to me, that's just outrageous. But Providence jumped on it and they terminated his benefits nonetheless. He said, I'm gonna try to go back to work. And he thought he could work as a paramedic with accommodations. He first, uh, attempted to obtain employment with the city of Philadelphia, and then he claimed that he was terminated when the extent of his disabilities became known. He filed a federal lawsuit claiming discrimination, and the court found that he could perform the work of a paramedic and that his termination was because he failed a retest at the fire academy. So he proved to the court's satisfaction in the discrimination claim that he could work as a paramedic, but Frost wasn't done. He turned around and sued Providence claiming he was entitled to any occupation benefits because he couldn't do any occupation. So, which was it? Could he be a paramedic with accommodations or couldn't he do any occupation? Well, I will tell you, the federal judge in Frost versus Providence was not happy and said, look, you can't have it both ways. You successfully argued in your discrimination case that you could work as a paramedic, and now you're claiming that you're disabled from performing any occupation. The court said, look, you're collaterally A stopped from bringing this disability lawsuit. In other words, you picked your poison, you picked your remedy, and you can't have both. Perhaps filing the lawsuit against Provident was an afterthought when he filed the Fire Academy test, but you have to think through your causes of action. And the fact that one may conflict with the other can be a a significant problem, as you can see in, uh, the Frost case. So don't bring in, uh, inconsistent claims and don't make inconsistent out allegations in all sorts of claims. An employment termination case, an employment discrimination case, your disability case, just don't do it. Got it. I hope you've enjoyed this week's episode of Winning Isn't Easy. If you've enjoyed this episode, consider liking our page, leaving a review or sharing it with your friends and family. And I would love it if you would subscribe to this podcast. By the way, we have our 2022 KV Law Scholarship up and running, and we're gonna take entries until August. Now, you can head over to kv law.com scholarship to learn more about it and to enter. This is a scholarship for college students, uh, who are looking for ways to fund their education. And if you have kids and you're not unable to work and you're trying to fund their college education, I think this is a great opportunity for you and your family, uh, to, uh, get a, a scholar, a scholarship. We do take these scholarship applications seriously, and we get hundreds of these applications. The application includes, uh, an essay. We read every one of the scholarship, a applications, and we try to make the best decision we can with all of the winning essays that we get. We wish the best of luck to your applicant. Take care.