Winning Isn't Easy Season 3 Episode 2: Insurance Carrier Spotlight on Reliance Standard

Welcome to Winning Isn't Easy! In this episode Nationwide Long Term Disability ERISA Attorney Nancy L. Cavey talks bout the Insurance Carrier Reliance Standard.

"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

Nationwide ERISA Attorney Nancy L. Cavey: 0:15

Hi, I am Nancy Cavey. I'm an individual and ERISA disability attorney. I wanna welcome you to Winning Isn't Easy. Before we get started today, I have to give you a legal disclaimer. The Florida Bar Association says I have to tell you that this podcast is not legal advice, but nothing is gonna prevent me from giving you easy to understand information about the in disability insurance company world, the games the carriers play, and what you need to know to get the disability benefits you deserve. Today I'm gonna be talking about Reliance Standard Insurance Company, and if you have a Reliance Standard policy or covered under a plan, this will be an educational podcast about some of the games that Reliance Standard plays. But I also want you to understand it, even if you aren't insured by Reliance Standard, you can learn lessons from this podcast because disability carriers use some of the same games in handling claims. So today I'm gonna talk about a situation where a ship pilot challenged Reliance standards denial of a claim when his employer switched disability insurance carriers. And this is called a continuity of coverage issue. The second thing I wanna talk about is how a Reliance Insurance company misapplied a preexisting condition clause in denying disability benefits. And lastly, I'm gonna talk, uh, talk about what happens when you don't cooperate with the disability insurance carriers. Questions before we get started, I'm gonna give you a break because we've got a fact filled episode, so we're back in a second.

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Nationwide ERISA Attorney Nancy L. Cavey: 2:05

Welcome back to Winning Isn't Easy. Now, what happens when you buy a disability insurance policy through your employer and your employer then changes disability insurance carriers? Do you still have disability insurance coverage? And if so with what carrier? And the answer to this question is going to be found in the continuity of coverage provision in your disability insurance policy or plan. This continuity of coverage policy provision will hopefully address this situation. And I know that it isn't uncommon for employees to get lost in the shuffle and lose their coverage through no fault of their own, despite paying premiums for years. And I wanna give you an example of this insurance coverage shuffle. Mr. Miller was a ship pilot and he had multiple medical problems. He went out on disability in 2015 and his employer changed disability carriers from Prudential to Reliance. He went back to work in July of 2016, and then he injured himself at work on a ladder in 2016. He applied for disability benefits through Reliance And Reliance said, oh no, you weren't insured on our plan until August 1st, 2016, which was the first day of the month involving his return to active work. The Reliance policy had a preexisting condition clause that barred coverage if the planned beneficiary had undergone treatment within three months prior to the date of the same medical condition. That was the basis of the concurrent claim. So of course in this case, Miller had treatment for the same medical problem during the three month period and Reliance said, oh no, we're gonna deny this claim on the basis that this is covered under the preexisting condition clause. So Miller appealed the denial and he argued that his coverage started well before August 1st, 2016, and that Reliance had to credit his prior coverage with credential and that there was what's called this continuity of coverage that prevented reliance from raising this preexisting condition clause in denying his claim. Well, you can imagine Reliance didn't change their position and this case ended up in the Fifth Circuit in the case called Miller versus Reliance Standard Life. The court had to construe the policy language, uh, that if the continuity of coverage existed where an employee was covered under the prior group, long-term insurance plan maintained prior to the policy's effective date, but wasn't actively at work due to injury or sickness as of the effective date of the policy. Now that's obviously very convoluted policy language and we have to work through the facts of each case. Miller was clearly previously covered under a disability insurance policy and he wasn't actively at work when the policy changed to Reliance and he wasn't actively at work because he had had a worker's compensation claim to be entitled to coverage. Miller had to establish that he was otherwise an eligible person in that he was still an active employee in any other respect other than performing his duties as of the policy's effective date. So of course, in the facts of this case, Miller met that requirement. The Fifth Circuit found that he was covered because Reliance's definition of eligible person was ambiguous. The court found that the term included those who on the relevant date were current employees even if they weren't actually working. So you can see that how the policy is written is really crucial as to whether or not there's continuity of coverage, uh, when there's a change in carriers. And of course the facts matter. Why was he out? How long was he out? Was he still actively at work? These cases are very fact intensive. And if you are in a situation where the disability carrier is denying your claim because there's allegedly a lack of coverage or there's an argument that there's a pre-existing condition clause that's applicable, you owe it to yourself to consult with an experienced ERISA disability, a attorney who will help weed through, uh, the policy language and develop the necessary facts. Obviously, it's a complex issue, but Miller was lucky. Next time a policy holder may not be so lucky. Let's take a break for a minute because I'm gonna next talk about the preexisting preexisting condition clause, which is one of the clauses that Reliance Standard Invoke in the Miller case. Welcome back to Winning Isn't Easy. I'm gonna talk about how Reliance Insurance Company misapplies the preexisting condition clauses and denying disability insurance claims. Now, I've given you a hint of that in my last piece, but I'm gonna dig into some greater detail here for you. Now, if you have just signed up for your employer's disability insurance coverage, the question is going to be when you file a claim was whether you were getting medical treatment for, uh, uh, the medical problem that you're now claiming that you are disabled from. And the disability insurance carrier is going to look at the preexisting, uh, condition clause in their disability policy. The problem with this clause is that many disability policies have this preexisting condition clause and there are different versions of it. And even with different versions, carriers still make the mistake of misapplying the preexisting condition clause. So for the sake of this discussion, we're gonna talk about a common version of the preexisting condition clause. So listen to this carefully. Benefits will not be paid for total disability that is caused by contributed to by or resulting from a preexisting condition. That's pretty broad. Now, how is preexisting defined? It's defined as any sickness or injury for which the insured received medical treatment, consultation, care or services, including diagnostic procedures or took prescribed drugs or medication during the three months immediately prior to the effective date of insurance. Now that exclusionary language is very narrow and the exclusion applies only if the disability results from or is caused or contributed to by a preexisting condition. In other words, the for the exclusion to apply, the carrier has to show that the insured's preexisting condition has itself substantially caused or contributed to the disability courts across the country have held it to apply at an exclusion for a disability that is caused or contributed to by a pre-existing condition. The carrier has to prove that the disability was substantially caused or contributed to by the pre-existing condition. You can tell from the, the tone of my voice that the operative term is substantial. A predisposition or stability to the injury isn't sufficient when the degree of relationship is undetermined. There has to be medical evidence of a significant magnitude of causation. So how does this work in the real world? Let me tell you a story that will give us some answers. Ms. Guston Feiss was struck by a car in 2016. She broke several bones in her pelvis and her sacrum. She worked for Microsoft through various contractors and she was required to do regular international travel and moved heavy displays. As a result of her injury, she had multiple spinal and pelvic surgeries and she underwent physical therapy. She was released to return to work without any restrictions and limitations in December of 2017. So she accepted a new position with another Microsoft contractor in February of 2018, and she signed up for that Reliance disability insurance policy through her new employer. After completing the 30 day waiting period, her reliance policy had a preexisting condition clause that said we won't pay for any disability, uh, where the insured has been treated in the 90 day period of time before coverage became effective, she had not gone or undergone any medical care during the 90 day lookback period, but she was tapering off of pain medication. Also, she had torn the labrum in her hip while on a work trip to China, and she applied for her Reliance disability benefits in August of 2018. So what did Reliance do? They were looking for coverage defenses. So they had a preexisting condition review by its physicians. They of course, concluded that she had previously injured her pelvis and had been treated for hip pain and that this new injury was likely related to the 2016 accident, and they denied her claim under the preexisting condition policy provision. Unfortunately, her condition worsened. Her surgeon insisted that her pain wasn't caused by the labral tear, but by the sacrum hardware. She had surgery to remove the hardware and in turn that destabilized her spine. Ms. Gustovsen Feiss had unhealed spinal fractures and ultimately she was left in a wheelchair. She was very unhappy. As we could understand, she found another doctor who confirmed that the labral tear was in fact the original source of her August, 2018 pain and that she had congenital issues that contributed to the tear. The congenital issues clearly were not caused by the 2016 accident, so she appealed the denial and reliance had another in-house liar for hire Doctor Who app applied that the labral tear was presumably related to the 2016 accident without commenting on the congenital nature of the tear. And of course, you'll know this case ended up in federal court. As part of the judge's determination in this case, you need to understand that a court can interpret the terms of the the policy and they're not bound by the carrier's interpretation. This is called the Doctrine of Contra Proferentem and it allows the court to decide what the policy language says and how it's applied. So in this case, the judge determined that Reliance had failed to meet the Ninth Circuit law for applying the preexisting condition. Limitation in this case was in the ninth Circuit because the policy language required reliance to prove that her 2018 injury was caused, contributed to, or the result of her preexisting condition. The court said, look, that is pretty clear the disability insurance carrier has got approved, that the preexisting condition itself substantially caused or contributed to the disability. Now Reliance's denial was based on the unsupported unfounded conclusion that her disability was directly related to the 2016 accident without any analysis, without any proof, and it was contradicted by her treating physicians. The court said, oh, no, no, no. This unsupported conclusion doesn't mean it's burden of proof that the accident was a substantial cause of Gustafson's feis 2018 disability and the court overturned that denial. But you can see here that the decision turned on the policy language, the medical timeline, the opinions of the liar for higher doctors and her treating physicians, and the basis of these opinions. When you are applying for your disability insurance benefits, you're putting your medical, your financial, and your work status at issue. And disability carriers are always looking for a reason to deny the claim. The first line of defense is a coverage defense and the pre-existing condition clause evaluation will always be done if you have just, uh, become eligible for and have, uh, signed up for your disability coverage and are claiming that you are disabled. So be prepared for that. In my next segment, I'm gonna talk about the carrier's right to ask you questions and what happens if you don't cooperate? Let's take a quick break.

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Nationwide ERISA Attorney Nancy L. Cavey: 14:30

Welcome back to Winning Isn't Easy. So what happens when you don't cooperate with the disability insurance carrier's questions? Now you know that carriers regularly ask you questions, uh, about your income. They may even call you for an interview. And of course, they are asking you to fill out activity of daily living forms. You just can't blow them off and expect that the carrier's gonna pay benefits. And that's exactly what Frank Kava Co did in his claim against Reliance Standard. And he paid the price as he should have in the case of Kava Co versus Reliance Standard Reliance had reason to believe that he was working while he was claiming disability benefits. Under every disability insurance policy, you have the duty to cooperate with a carrier. The failure to do so can be grounds for denial in and of itself independent of any other reason the carrier might have. So in this case, reliant Standard asked Kava Co to clarify whether he had returned to work, asked him to provide a copy of his contract with his employer, asked him to provide them with payroll information. He refused, but he sent in statements from his employer and his wife and others at testing that he had in returned to work and wasn't capable of working. Now, the failure to provide Reliance Standard with what it wanted set off the warning bills because he refused to provide the information they asked for. Reliant Standard denied his claim. So Kava co appealed and ultimately of course, his case ended up in front of a federal judge who was not impressed because there was conflicting evidence about whether Kava Co had returned to work and under the terms of the policy, found that Reliance Standard had an had not abused its discretion by deciding to rely on the evidence that he was working. The reason this denial was upheld was because Kava Co didn't cooperate and he didn't provide Reliance Standard with a copy of the contract, the payroll information or answer their questions. Rather, he danced all around the issue. And that dance led to a claims denial. The lesson here is simple. You do have to cooperate. You do have to tell the truth, and you do have to provide the disability of care generally with what it is they want. Otherwise, you're setting yourself up for acclaim denial because you failed to honor your duty to cooperate. So what are the lessons that we've learned today? Well, the first lesson we've learned is that preexisting condition clauses can result in the denial of a claim. And it's not uncommon for carriers to wrongfully apply this preexisting condition clause. They're in such a hurry to deny the claim that they don't take the time to actually read their policy language, look at the medical facts and timeline and correctly apply the preexisting condition clause. The next lesson we learned is that if your employer changes your disability policy, you can potentially lose your coverage because of the lack of continuity of coverage. This can be a minefield and you will definitely need to be consulting with an experienced ERISA disability attorney if this happens to you. And lastly, you've gotta cooperate with a carrier. You have to answer their questions. You have a duty to cooperate. And if you don't cooperate, that in and of itself can be the basis of the denial. Now, of course, I think you have to be careful and what truthful about what you answer and how you answered, but that's a subject for a different podcast. I hope you've enjoyed today's episode. If you like this podcast, please consider liking our page, leaving a review and sharing it with friends or family. This podcast comes out weekly, so stay tuned for next week's episode of Winning Isn't Easy. Now, what happens when you buy a disability insurance policy through your employer and your employer then changes disability insurance carriers? Do you still have disability insurance coverage? And if so with what carrier? And the answer to this question is going to be found in the continuity of coverage provision in your disability insurance policy or plan. This continuity of coverage policy provision will hopefully address this situation. And I know that it isn't uncommon for employees to get lost in the shuffle and lose their coverage through no fault of their own, despite paying premiums for years. And I wanna give you an example of this insurance coverage shuffle. Mr. Miller was a ship pilot and he had multiple medical problems. He went out on disability in 2015 and his employer changed disability carriers from Prudential to Reliance. He went, went back to work in July of 2016, and then he injured himself at work on a ladder in 2016. He applied for disability benefits through Reliance And Reliance said, oh no, you weren't insured on our plan until August 1st, 2016, which was the first day of the month involving his return to active work. The Reliance policy had a preexisting condition clause that barred coverage if the planned beneficiary had undergone treatment within three months prior to the date of the same medical condition. That was the basis of the concurrent claim. So of course in this case, Miller had treatment for the same medical problem during the three month period and Reliance said, oh no, we're gonna deny this claim on the basis that this is covered under the preexisting condition clause. So Miller appealed the denial and he argued that his coverage started well before August 1st, 2016, and that Reliance had to credit his prior coverage with credential and that there was what's called this continuity of coverage that prevented reliance from raising this preexisting condition clause in denying his claim. Well, you can imagine Reliance didn't change their position and this case ended up in the Fifth Circuit in the case called Miller versus Reliance Standard Life. The court had to construe the policy language, uh, that if the continuity of coverage existed where an employee was covered under the prior group, long-term insurance plan maintained prior to the policy's effective date, but wasn't actively at work due to injury or sickness as of the effective date of the policy. Now that's obviously very convoluted policy language and we have to work through the facts of each case. Miller was clearly previously covered under a disability insurance policy and he wasn't actively at work when the policy changed to Reliance and he wasn't actively at work because he had had a worker's compensation claim to be entitled to coverage. Miller had to establish that he was otherwise an eligible person in that he was still an active employee in any other respect other than performing his duties as of the policy's effective date. So of course, in the facts of this case, Miller met that requirement. The Fifth Circuit found that he was covered because Reliance's definition of eligible person was ambiguous. The court found that the term included those who on the relevant date were current employees even if they weren't actually working. So you can see that how the policy is written is really crucial as to whether or not there's continuity of coverage, uh, when there's a change in carriers. And of course the facts matter. Why was he out? How long was he out? Was he still actively at work? These cases are very fact intensive. And if you are in a situation where the disability carrier is denying your claim because there's allegedly a lack of coverage or there's an argument that there's a preexisting condition clause that's applicable, you owe it to to yourself to consult with an experienced ERISA disability, a attorney who will help weed through, uh, the policy language and develop the necessary facts. Obviously, it's a complex issue, but Miller was lucky. Next time a policy holder may not be so lucky, I am gonna talk about how Reliance Insurance Company misapplies the preexisting condition clauses in denying disability insurance claims. Now, I've given you a hint of that in my last piece, but I'm gonna dig into some greater detail here for you. Now, if you have just signed up for your employer's disability insurance coverage, the question is going to be when you file a claim was whether you were getting medical treatment for, uh, uh, the medical problem that you're now claiming that you are disabled from. And the disability insurance carrier is going to look at the preexisting, uh, condition clause in their disability policy. The problem with this clause is that many disability policies have this preexisting condition clause and there are different versions of it. And even with different versions, carriers still make the mistake of misapplying the preexisting condition clause. So for the sake of this discussion, we're gonna talk about a common version of the preexisting condition clause. So listen to this carefully. Benefits will not be paid for total disability that is caused by contributed to by or resulting from a preexisting condition. That's pretty broad. Now, how is preexisting defined? It's defined as any sickness or injury for which the insured received medical treatment, consultation, care or services, including diagnostic procedures or took prescribed drugs or medication during the three months immediately prior to the effective date of insurance. Now that exclusionary language is very narrow and the exclusion applies only if the disability results from or is caused or contributed to by a pre-existing condition. In other words, the for the exclusion to apply, the carrier has to show that the insured's preexisting condition has itself substantially caused or contributed to the disability courts across the country have held it to apply it an exclusion for a disability that is caused or contributed to by a preexisting condition. The carrier has to prove that the disability was substantially caused or contributed to by the preexisting condition. You can tell from the tone of my voice that the operative term is substantial. A predisposition or stability to the injury isn't sufficient when the degree of relationship is undetermined. There has to be medical evidence of a significant magnitude of causation. So how does this work in the real world? Let me tell you a story that will give us some answers. Ms. Kason Feiss was struck by a car in 2016. She broke several bones in her pelvis and her sacrum. She worked from Microsoft through various contractors and she was required to do regular international travel and move heavy displays. As a result of her injury, she had multiple spinal and pelvic surgeries and she underwent physical therapy. She was released to return to work without any restrictions and limitations in December of 2017. So she accepted a new position with another Microsoft contractor in February of 2018 and she signed up for that Reliance disability insurance policy through her new employer. After completing the 30 day waiting period, the reliance policy had a preexisting condition clause that said we won't pay for any disability, uh, where the insured has been treated in the 90 day period of time before coverage became effective, she had not gone or undergone any medical care during the 90 day lookback period, but she was tapering off of pain medication. Also, she had torn the labrum in her hip while on a work trip to China, and she applied for her Reliance disability benefits in August of 2018. So what did Reliance do? They were looking for coverage defenses. So they had a preexisting condition review by its physicians. They of course, concluded that she had previously injured her pelvis and had been treated for hip pain and that this new injury was likely related to the 2016 accident and they denied her claim under the preexisting condition policy provision. Unfortunately, her condition worsened. Her surgeon insisted that her pain wasn't caused by the labral tear, but by the sacrum hardware. She had surgery to remove the hardware and in turn that destabilized her spine. Ms. Gustovsen Feis had unhealed spinal fractures and ultimately she was left in a wheelchair. She was very unhappy. As we could understand, she found another doctor who confirmed that the labral tear was in fact the original source of her August, 2018 pain and that she had congenital issues that contributed to the tear. The congenital issues clearly were not caused by the 2016 accident. So she appealed to denial and Reliance had another in-house liar for hire Doctor who opined that the labral tear was presumably related to the 2016 accident without commenting on the congenital nature of the tear. And of course, you'll know this case ended up in federal court. As part of the judge's determination in this case, you need to understand that a court can interpret the terms of the policy and they're not bound by the carrier's interpretation. This is called the Doctrinal Contra proferentem and it allows the court to decide what the policy language says and how it's applied. So in this case, the judge determined that Reliance had failed to meet the Ninth Circuit law for applying the preexisting condition limitation. And this case was in the ninth Circuit because the policy language required reliance to prove that her 2018 injury was caused, contributed to, or the result of her preexisting condition, the court said, look, that is pretty clear the disability insurance carrier has got approved, that the preexisting condition itself substantially caused or contributed to the disability. Now Reliance's denial was based on the unsupported unfounded conclusion that her disability was directly related to the 2016 accident without any analysis, without any proof, and was contradicted by our treating physicians. The court said, oh, no, no, no. This unsupported conclusion doesn't mean its burden of proof that the accident was a substantial cause of Guston's feis 2018 disability and the court overturned that denial. But you can see here that the decision turned on the policy language, the medical timeline, the opinions of the liar for higher doctors and are treating physicians and the basis of these opinions. When you are applying for your disability insurance benefits, you're putting your medical, your financial, and your work status at issue. And disability carriers are always looking for a reason to deny the claim. The first line of defense is a coverage defense. And the preexisting condition clause evaluation will always be done if you have just, uh, become eligible for and have, uh, signed up for your disability coverage and are claiming that you are disabled. So be prepared for that. So what happens when you don't cooperate with the disability insurance carrier's Questions? Now you know that carriers regularly ask you questions, uh, about your, they may even call you for an interview and of course, they are asking you to fill out activity of daily living forms. You just can't blow them off and expect that the carrier's gonna pay benefits. And that's exactly what Frank Kava Co did in his claim against Reliance Standard. And he paid the price as he should have in the case of Kava Co versus Reliance Standard Reliance had reason to believe that he was working while he was claiming disability benefits. Under every disability insurance policy, you have the duty to cooperate with a carrier. The failure to do so can be grounds for a denial in and of itself, independent of any other reason the carrier might have. So in this case, reliant Standard asked Kava Co to clarify whether he had returned to work, asked him to provide a copy of his contract with his employer, asked him to provide them with payroll information. He refused, but he sent in statements from his employer and his wife and others attest that he hadn't returned to work and wasn't capable of working. Now the failure to provide Reliance Standard with what it wanted set off the warning bells because he refused to provide the information they asked for. Reliance Standard denied his claim so Kava co appealed and ultimately, of course, his case ended up in front of a federal judge who was not impressed because there was conflicting evidence about whether Kava Co had returned to work and under the terms of the policy, found that Reliant Standard had an, had not abused its discretion by deciding to rely on the evidence that he was working. The reason this denial was upheld was because Kava Co didn't cooperate and he didn't provide Reliance Standard with a copy of the contract, the payroll information or answer. There are questions rather he danced all around the issue and that dance led to a claims denial. The lesson here is simple. You do have to cooperate. You do have to tell the truth, and you do have to provide the disability care generally with what it is they want. Otherwise, you're setting yourself up for acclaim denial because you failed to honor your duty to cooperate.