Winning Isn't Easy: Long-Term Disability ERISA Claims

Winning Isn't Easy Season 3 Episode 4: Disability 101 and Disability Carrier Meaningful Dialogue

February 28, 2023 Nancy L. Cavey Season 3 Episode 4
Winning Isn't Easy: Long-Term Disability ERISA Claims
Winning Isn't Easy Season 3 Episode 4: Disability 101 and Disability Carrier Meaningful Dialogue
Show Notes Transcript

In this episode of Winning Isn't Easy, Nationwide ERISA Disability Attorney Nancy L. Cavey will discuss the basics of Disability 101 and the importance of meaningful dialogue between disability carriers and claimants. Nancy will discuss key topics such as how to file a claim, common mistakes to avoid, and how to create a meaningful dialogue with your disability carrier. She will also provide insight on what to do if you are denied a claim and how to appeal a denial. Tune in to gain a better understanding of the disability process and how to better communicate with disability carriers.

"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."

Resources Mentioned In This Episode:

LINK TO ROBBED: https://caveylaw.com/get-free-reports/get-disability-book/

LINK TO PROFESSIONAL BOOK: https://caveylaw.com/get-free-reports/disability-insurance-claim-survival-guide-professionals/

FREE CONSULT LINK: https://caveylaw.com/contact-us/

Dr. Braun's Website and Information: https://www.bayareaorthofl.com/david-t-braun/

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Nationwide ERISA Attorney Nancy L. Cavey:

Hey, I'm Nancy Cavey, national ERISA and individual Disability attorney. Welcome to this episode of Winning Isn't Easy. Before we get started, I've gotta give you a legal disclaimer. This podcast isn't legal advice. The Florida Bar Association says I have to say it, so I've said it, but nothing will ever stop me from giving you an easy to understand overview of the disability insurance world, the games the carriers play, and what you need to know to get the disability benefits you deserve. So off we go. Are you disabled? If so, today's podcast is for you. If you are disabled but not ready to apply for your benefits, you can still learn lessons from this podcast. I'm gonna talk about four things today, Rissa versus non ERISA and associated short and long-term disability benefits, disability and exclusions and limitations overviews of the claims process. And I'm gonna answer that question I get all the time. Do I need an ERISA disability attorney? Let's take a break a moment before we get started.

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Nationwide ERISA Attorney Nancy L. Cavey:

Welcome back to Winning Isn't Easy. Let's first start a talking about ERISA versus non ERISA disability policies or plan. Now the benefits provided to you by your employer, even if you paid some or all of the premium, are probably governed by a law called the Employer Retirement Income Security Act. There's an exclusion, though it doesn't apply to government or church employees and there are some similarities. However, when we see these policies, regardless of whether or not it's an employer provided plan that's uh, governed by ERISA or it's a plan or policy provided by government to government employees or church employees. So what are the features of an ERISA policy that are unique to the world of erisa? Well, first, there's no individual underwriting, so nobody's checking on your medical background. And as a result, the premiums are low. There are limits on how long you can be paid for conditions such as mental nervous conditions or subjective medical conditions. There are also reductions for benefits. There's are called offsets. So you'll see offsets for social security, disability benefits, worker's compensation benefits, personal injury benefits, pension benefits, or other benefits. Now if your claim is denied, you have to follow the ERISA appeal process and exhaust any legal remedies before you can file suit in federal court. You just can't say, I'm going into court and I'm gonna sue these guys. The impact of that is if you try to do that and you don't file an appeal or a timely appeal, your case is going to be over. Why? Because the discipline carrier will argue that you have not exhausted your administrative remedies and most judges will agree with them. If you haven't filed an appeal, the failure to exhaust your remedies is an automatic death bloat to your case. Well, what are some of the other differences? Well, in an ERISA case, a federal judge is gonna make the decision. There's no jury trial. The standard that the federal judge has to use is found in your policy and it can be several standards of review. The first one is a de novo standard of review. That means the judge can use his or her own discretion in the case and substitute their own judgment for that of the disability carrier. The more common one and more deadly one for an ERISA policy holder or plan participant is the arbitrary and capricious standard of review. That means that the judge is constrained by the opinion of the insurance carrier and can only in overturn that denial if they find that the denial was arbitrary or capricious. And that means that insurance companies are given a great deal of leeway in interpreting the terms of your policy and deciding whether you're disabled. There's no treating physician rules so carriers can use their liar for higher doctors to deny your claim. And if a judge, federal judge reverses the denial, you only get paid what's owed and there aren't any damages like punitive damages or bad fake damages and you might might ha get your fees paid by the disability carrier. What's the difference between that and an individual disability insurance policy known as an I D I policy? Well, a disability policy is one that you purchase on your own through an agent and it's governed by state law. Usually individual disability insurance policies will have the following features. First, you're underwriting the policy based on yourself and you have to have evidence of insurability. You are going to be paying relatively high premiums because this policy is customized to you. There may be limitations on coverage for mental nervous conditions and you can bargain for the removal of those. There can be offset provisions that generally you won't be able to argue about those. But more often than not, I don't see offset provisions in individual disability policy. The obvious drawback is that this is a customized policy unique to you and as a result you're gonna pay a high premium. Now if for some reason your claim is denied, you can file a lawsuit in federal court and that's great because you can ask for bad faith, punitive damages or other state law claims if your claim's denied and you get a jury trial with discovery. And there's the potential for significant money damages if the the jury finds that there are benefits due for bad faith damages. So those are just some of the differences between ERISA disability well policies and individual disability policies. And as a subset of that, I'm often asked, well what's the difference between short-term and long-term disability benefits? Well, short-term disability benefits will provide benefits to a person for a short period of time. Now the duration is normally six months, but it can vary from policy to policy. Those benefits are generally paid weekly and they'll pay a varying percentage of your salary and you get to generally pick that percentage. Now, some states will offer short-term disability benefits on their own like in New York for example, or California. That's not to be confused with short-term disability benefits. Long-term disability benefits is a, an option that you can purchase that will provide benefits normally to age 65 or retirement age it will pay 50 to 70% of your base salary on a monthly basis. But of course there's always an argument about what that base salary definition means. The, it's not uncommon for long-term disability policies to provide residual benefits if you're still working, which means if you're earning 80% less generally than what you are your base earnings are, you get a percentage of the diff, that's the ceiling the basement is. If you are earning under 20% those before monthly income benefits, you get a hundred percent. So it's that basement ceiling range of 20 80% where potentially you might have residual disability benefits. Long-term disability benefits can be taxable or non-taxable depending on how the premium was paid. And so those are some of the, the differences, if you will, between short and long-term disability benefits. So now we've gotta set the stage for the next segment. I'm gonna take a break for a moment. Welcome back to Winning Isn't Easy. Let's talk about disability and exclusions and limitations. There is no uniform definition of disability much like there's no uniform disability insurance policy. So one of the crucial things you have to do before you stop work and apply for benefits or if your claim's been denied and you're thinking about appealing, is to get your policy out what does it say about disability. Now, normally own occupation benefits are paid first and that's paid if you're unable to perform the material and substantial duties of your occupation due to your impairments. It's normally paid for about 24 months, but it could be as short as 12 months and as long as 36 months. And if you have an own occupation policy for the duration of the policy. But the key here is how is the term occupation defined? The definition can be based on the dictionary of occupational titles. That's an old, a federal publication that hasn't been updated in a million years and doesn't even have an accurate description of some of the positions that exist like attorney or doctor or computer programmer. And they certainly don't have de definitions of positions like web developers for example. What's important, as I said, is to get that policy out. How is occupation defined? Cuz it could be based on the dictionary of occupational titles, how your occupation is performed in the national economy, how your occupation is performed in the local economy, or how your uh, occupation is actually performed for your employer. Once you have satisfied own occupation grid, there'll be a transition to any occupation benefits. Question at that point becomes whether or not you can engage in the material and substantial duties of any occupation based on your education, your training, and your experience. I didn't say age, so remember, that's not a factor. There might be a wage requirement that the carrier has to establish. So in other words, you have to be able to earn a percentage of your pre disability earnings before any, uh, occupation benefits are, uh, due and owning. In other words, let's say you're an engineer and they do a labor market survey in the any occupation stage and they decide that you could take your skills in engineering to some other occupation. They have to prove, depending on the terms of the policy, that you can earn at least a percentage of your pre disability earnings, normally 60 to 80% for them to successfully argue that there are other occupations that you can do. And, and that gives you a hint of some of the issues and games that are played in the definition of disability and the definition of occupation. Now, the other important policy terms, what I'm looking at, a policy giving people advice, exclusions and limitations. So now that we know that you're covered, uh, what your occupation is, what the definition of disability is, we have to figure out whether or not there's limits on how long you might be paid. Benefits. Generally every ERISA disability policy will have limits on benefits for mental nervous conditions. There are flavors, if you will, of the mental nervous condition limitation. There are some that are broadly written that says, if you are disability is caused or contributed to your disability, benefits are limited to just two years. So you might have a back injury, have back surgery and are depressed. And if your depression contributes 1% to your overall total disability, the disability carrier can say, Hey, benefits are limited to just two years. There is also a subjective limitation conditions that you need to be aware of because sometimes the policy will say, will pay two years of benefits. But if if you have a condition that's characterized by muscle spasm, pain, fatigue, migraines, fibromyalgia, chemical sensitivity, et cetera, et cetera, benefits are limited to just two years. So the policy will use medical definition exclusions to limit your benefits. You can see that this can be a complex areas and if you're thinking about applying for disability benefits or your benefits been uh, denied, it's time for you to consult with an an attorney, help you read that disability policy, read the denial, and understand what it is you need to prove to either get your benefits or to get back on claim. Got it. All right, let's take a break.

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Nationwide ERISA Attorney Nancy L. Cavey:

Welcome back to Winning Isn't Easy. Let's talk about the disability insurance claims process. But before we even start talking about filing the claim, there's some things I think you need to do before you make the decisions to stop work and to apply for benefits. Many of these things you can do for yourself before reaching out to an attorney. And these include reviewing the policy. What does your policy say about the definition of disability or occupation? What are the limits, if any? And there probably are on the nature of the benefits that you can get or the period of time you can get those benefits. Next, review your medical records. I will promise you very few people get their medical records and review them before they make the decision to stop working. And you'll be stunned, stunned at the stuff you'll see in your medical records. And it might be that you have to find a new doctor because the third thing you've gotta consider is whether or not your doctor supports your claim. They may take an accurate history, they may be a great provider, they may be sympathetic, but if they aren't willing to fill out disability insurance claims, your ERISA disability insurance claim will go nowhere. So you gotta determine the level of support of your physician. This is where it starts to get a little more complicated because you have to obtain proof that your symptoms meet whatever the standard of disability. In other words, it's not just enough that you have back pain or that you have leg pain or you can't sit. You have to establish that you have an objective basis for the diagnosis, an objective basis for any restrictions, limitations. And it's all gonna be tied together to establish that those symptoms prevent you from doing the material and substantial duties of your occupation. As you're going through this initial uh analysis, you have to start thinking about what's the right day. I wanna claim disability and many people will make mistakes. They will stop working, apply for benefits and only find out that their medical records aren't supportive or that their doctor won't support the claim, can't go back and necessarily fix that sort of stuff very easily. The other thing that you need to take into consideration, quite frankly, is having money to live on while this claim is pending. And with the idea that perhaps if the claim is going to be denied and I have to get a lawyer involved, how am I gonna live for six months a year or more? The other important consideration is getting alternative health insurance coverage because if you quit, you, you file a claim and you quit or you get terminated, you're gonna lose your group insurance. You obviously want to have that alternative insurance in place because you need treatment and because you gotta submit proof to the disability carrier on a regular basis that not only you are disabled, but that you are getting a treatment that's reasonable and appropriate. Once you've done all of that, you've gotta pick the right date to be disabled, then you've gotta notify your disability carrier of the claim. I also strongly suggest that you send a letter to your insurance carrier telling them that they can't have any oral contact with your physicians. They can only have contact in writing and you'd like to be copied with that. Why? Because all sorts of games are played by disability insurance, carrier nurses, peer review providers and other professionals in trying to convince your doctor that you're able to work. You also should send a letter to your physician saying, I only want you to have written contact with my disability carrier and if you get something from them, I wanna be copied on it and I want to see your reply before it gets sent in. And by the way, you'll never send any of those attending physician statement forms to the carrier directly. Give them to me and I will submit them. Additionally, you probably are gonna have to hire a Social security disability attorney. Why? Because many disability policies say that you have to apply for Social security disability benefits and if you don't, they're gonna reduce your benefits as if you were getting benefits. ERISA disability claims are tough. Social security disability claims are tough without having an attorney. I know you've heard that the neighbor next door got their social security disability benefits, but they're not you and every case is different. So you really need to be thinking about retaining both an ERISA disability or a Social security disability attorney or a person like me who does both. As you're thinking through this, what are the pitfalls to avoid? One, don't use unsupportive medical providers. Two, don't lie on the forms. Don't overstate your symptoms. Don't exaggerate. Next, you need to understand your functionality as it relates to, you know, the symptoms that you have and how those symptoms impact your ability to function. And so if you aren't truthful with your doctor about what your symptoms are and your functionality, that can be a problem. Particularly when the disability carrier goes looking at your social media accounts and sees all sorts of posts about you doing things you said you couldn't do or doing things that you said you had difficulty doing. That certainly is going to lead to uh, surveillance. And the whole ball of wax is gonna be packed up to your doctor and said, and they're gonna be asked, well, if you're relying on the history of the symptoms and complaints and rendering your opinions, does this social media post, does this surveillance change your opinion? And more often than not, it will and your claim goes down in flames. The other pitfalls are not getting medical treatment. We're not getting recommended testing. Now they can't make you have surgery, but you need to get medical treatment. And if you don't follow through with that treatment, there's a policy provision that gives the carrier a license to say they're not compliant with policy terms. We get to deny the benefits and of course we'll uphold that. I don't think you should be communicating with the carrier on the phone, email writing. That's the way to go. It's something that can be tracked. The other thing I want you to avoid is the use of social media. I tell my clients to turn it off. Turn, turn euros off your spouses, off your mothers, your grandmothers, your aunts, your uncles, anybody else who's posting about you. It's off. Nothing about you because I don't want you to set yourself up for surveillance. Okay? So now you've made the difficult decision to stop work and apply for benefits. What you should be doing first is to ask for a copy of the policy or the plan and you should email certified mail, u p s, FedEx, fax, whatever you wanna do. Ask for a copy of that, file that plan or policy. Why I want it to be trackable because under the ERISA law they gotta give it to you. Your employer has to give it to you. And if they don't, then I always say ask again in 30 days and send it email certified mail u p s FedEx and fax pony delivery just so long as the pony can say it delivered the letter. Why? Because if they don't give it to you, a lawyer like myself can file a lawsuit in federal court and we can get paid for getting that. And you can get money for, uh, a fine, it's$110 a day fine and attorney's fees are paid. Of course the this is all in the discretion of the, of the court. So once you've got that policy or plan, we're gonna be looking at it very closely based on disability, occupation, own occupation, any occupation, mental nervous conditions, subjective limitations, offsets. Those are the key things that you need to understand cuz you're gonna have to chart your way through the shoals of those definitions. Once you file the claim, what's gonna happen? You are going to get a letter acknowledging the notice of the claim. You're gonna receive forms and lots of forms. I want you to write a draft and put it down and come back, be consistent and make sure that whatever you're saying is consistent with your medical records. Your employer is probably gonna be reaching out to you, talking to you about HR issues. Be careful about what you're saying to them about returning to work, not returning to work difficulties that you are having with your workplace duties. They're not necessarily in your favor, they're, they're in their own corner. You need to understand that you are going to have active of daily living forms to complete and to, to me, they're open-ended questions, a trap, but you don't wanna set yourself up for a claim denial by exaggerating or lying, uh, about what you've put. Now you know that they're gonna send the APS forms to your doctor and your claim can be made one or lost with those APS forms. So it's really important, as I've said, that you're having a little discussion with your doctor before you stop work and apply to make sure that they're supportive of your claim member are willing to fill out forms. Now, there are three red flags in this initial application process. First, if they ask to take your statement, that's a red flag. If they schedule you for an i that's a red flag. If they want you to have a functional capacity evaluation, that's a red flag and you need to take it for what it is. They're not doing this to be nice, they're doing it to set you up for a claims now. And if any of those three things happen or all three happen, you need to get a lawyer. Now, if you're lucky, you get a claims approval, but in most cases there are some preliminary steps that lead to a claims denial. Let's talk about the claims denial. If you get a claims denial, there are steps that, uh, your attorney will be expert in managing, assuming that you're dealing with a, a qualified ERISA disability attorney. You don't want your family lawyer, your social security lawyer, your criminal law lawyer, your personal injury lawyer, your cousin Vinny, doing an appeal. Now you have the right to an appeal and you need to check the policy to see how many appeals you can do. And there is a mandatory appeal process within 180 days. And if you don't exhaust your administrative remedies by filing an appeal and try to go into court, you're gonna lose the appeal is the trial of your case. My appeal letters are 25 to 60 pages long and I leave no room for the carrier to deny your claim. I request a copy of the claims filed, I review it cover to cover. I'm putting together your case, developing medical evidence, vocational evidence taking statements. It is crucial that you have assistance because I want you to remember the sage advice of Abraham Lincoln who said, A person who represents themselves has a fool for a client. So if you write a letter that says, I'm appealing, you write a letter that's got all sorts of updated medical records, don't really expect that the carrier's gonna change their position. It's crucial that we develop the necessary lay medical and vocational evidence that rebuts the basis of your carrier's denial. Now, what happens if your claim denial is upheld? Definitely if you haven't gotten a lawyer, it is certainly the time to get a lawyer. But you need to understand that in an ERISA case, the appeal is a trial of your case and nothing new, nothing new, nothing new can be added to that claims file. So when you retain an attorney, they're stuck with the record and basically at that point, their job is gonna be to negotiate the best settlement they can based on the state of the carrier file. There's no depositions that, uh, well, lemme back up. There are rarely depositions that the depositions are limited as to what you can do. But I can't take the doctor's deposition, your doctor's deposition, your deposition, the deposition of a vocational evaluator. All of the things that lawyers think they've gonna hold for the trial have to be submitted in an appeal. So don't make that mistake. You gotta file a complaint, you're gonna get an answer. You're gonna have a case management conference with the attorney, you're probably gonna have mediation and there's ultimately gonna be a motion for summary judgment. Those are not things that you should be handling. It's as simple as that. It's like trying to do heart surgery on yourself. Don't do it. So that's an overview of the claims process, deciding to file a claim, filing a claim, dealing with a termination and a lawsuit. Hopefully you get my point. Let's take a quick break before we head into our next section. Welcome back to Winning Isn't Easy. Do you need an ERISA disability attorney? Well, of course you're gonna expect me to say yes because I am an EISSA disability attorney, but the answer is really yes, you do need an eissa disability attorney. Why? Because an ERISA disability attorney understands policy language, the definition of disability, own occupation, any occupation, they understand the limits in a disability policy and they can apply that understanding to your specific case. Many times claims are denied based on the lack of objective evidence of the diagnosis, the disability or causal relationship. And it's crucial that you anticipate those potential denial basis before you even stop work and apply for benefits. So many times I'm looking at that policy, I'm looking at my client's medical records, I'm looking at their earnings. I'm trying to decide whether or not they're gonna meet the standard of definition of disability in their policy. I'm looking at how the medical evidence may or may not establish restrictions and limitations. I'm looking for evidence that those restrictions and limitations are not only objectively based, but interfere with your ability to do the material and substantial duties of your own occupation. And additionally, I am looking for policy limitations. So there might be subjective medical condition limitations or psychiatric limitations in your policy. And so I'm developing a strategy to maximize your benefits from the very beginning. So it's really important I think before you stop work and apply for benefits that you retain a disability attorney to do a consult, to review your policy, review your medical records, and give you some guidance. And if you're smart, you will retain a disability attorney to help you through the claims process. If your claim is denied or terminated, you only have 180 days in which to file an appeal, and the appeal is the trial of your case. You can't hold your evidence till you get in front of a court because the court will not look at that evidence. You can't run the court without filing an appeal. And the appeal process is one in which you've got 180 days in wish to file that appeal. You've gotta get the carrier file, you've gotta understand the reasons for the denial. And I will normally see 12, 15, 16 reasons that I think the decision is wrong and I'm writing legal arguments. I'm developing the medical evidence, the vocational evidence, the lay evidence that will establish the basis not only for the claim, but to overturn a wrongful claims denial. Look, my dad became disabled when I was growing up and I watched him struggle to make the difficult decision to stop work and apply for his benefits if his claim had been denied. He was in no shape to file an appeal. He was an insurance agent. He he knew disability insurance policies, but he was dealing with his medical condition. He was dealing with how to handle the family finances, how to deal with, um, all the associated issues that come with disability. You don't have the effort. I mean the, you don't, you don't have the, the base of knowledge in which to file an appeal and quite frankly, you probably don't have the physical or emotional stamina to apply for benefits or file and appeal. So those are some of the reasons why I think that you need to have an experienced ERISA disability attorney at all stages of your claim. I hope you've enjoyed today's episode and has given you an overview of the ERISA disability claims process. If you've liked this episode, please leave a review, share it with your family and friends. Remember, this podcast comes out weekly. Now we're entering the holiday season here, so we're not gonna be posting any new episodes the week of Christmas. However, I wish you Happy holidays and a happy New Year and I look forward to joining you in 2022 with new episodes of winning Isn't Easy. Hey, I'm Nancy Cavy. I am a national ERISA and individual disability attorney. I wanna welcome you to this episode of Winning Isn't Easy. Before we get started, I'm required to tell you that this podcast is not legal advice, but I assure you that nothing will ever prevent me from giving you an easy to understand overview of the disability insurance world, the games that disability carriers play, and the ways that you can get the disability benefits you and your family deserve. I'm gonna talk about three things today. First, should a disability carrier have a meaningful dialogue with you before they deny or terminate your benefits? I'm gonna talk about two case studies about where a disability policy holder was denied a a full fair and review of their claim and talk specifically about some things that Aetna is notorious for doing. And lastly, I'm gonna talk about whether a long-term disability policy holder can sue a disability insurance, uh, company for the financial harm caused by a wrongful claims denial. You ready? Let's take a break. First,

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Nationwide ERISA Attorney Nancy L. Cavey:

Welcome back to Winning Isn't Easy. Should a disability carrier have a meaningful dialogue with you, deny or terminate your disability insurance benefits, the answer is yes, but I wanna take you through the standard claim denial letter so you understand what a disability carrier thinks is meaningful dialogue and what one federal judge thinks is meaningful dialogue. Now, one of the most common reasons found in a denial letter is the phrase there is no support for an impairment that results in restrictions and limitations and the inability to perform your own or any occupation. Let's talk about the clearest mud denial letters that I normally see. The denial letter is going to review the medical records that the plan or the carrier allegedly reviewed. They're gonna cherry pick them, they're gonna refer to the disability carriers. Selected medical review of course, disagrees with your physician's conclusions. They're gonna top off the denial letter with the opinion of an in-house vocational specialist. That vocational specialist is gonna ignore your doctor's opinions about your restrictions limitations. Instead, they're gonna rely on the disability carrier's liar. For higher doctor's opinions. VE is gonna determine whether or not you can go back to your past occupation or whether you have transferrable skills that will allow you to work in another occupation. This denial letter will always invite you to submit additional medical information including treatment notes, diagnostic test results, physical therapy notes, and prescription medications. The letter will also generally ask for your treatment plans and any information about your specific restrictions and limitations, even though you've already submitted an attending physician statement form that the carrier's rejected as part of this appeal, the disability carrier may have you examined by a not so independent medical evaluator who's nothing more than a hire gun. You might be tempted to bring your records to the IME reviewer if there's an an ime. And it's not uncommon for the IME provider to refuse to look at your medical records on the basis that you've been tampering with those records or you may have removed damaging information. Nevermind that the IME has already gotten a biased cherry picked summary of your medical records from the disability carrier. Now don't be surprised that the IME may last a few minutes or the imme doesn't even do a thorough examination. If possible, you wanna videotape that Ime or have a witness to take notes about what occurred. You can even do a summary of the IM e, but better yet, I think you should have a lawyer to represent you before you go to the I M E or get your own IM E or functional capacity evaluation. To determine your restrictions limitations, you may even wanna see your own doctor the day of the IMe so that there's a comparison as to what the exam findings work between your doctor and the IME doctor. In an ERISA case, the plan administrator, the carrier has to provide you an opportunity for a full and fair review of the claims denial. So what is that and what happens if you end up in court? It's a judge's gonna determine whether or not there's been a full and fair review in an ERISA case. There's two possible standards of review. In other words, a judge can use depending on the language in your policy or plan a de novo standard of review. That means that the judge gets to substitute their judgment for that as a disability carrier. Unfortunately, the more common standard of review is arbitrary and capricious and a judge is required to give deference to that denial even if they disagree with it, even if the denial is illogical and plausible or without support. Unfortunately, the arbitrary and capricia standard of review really does limit what a judge can do, but the judge does have the right to consider some factors like whether or not they had you undergo an ime, whether they relied on a paper review of existing medical records, whether they provided their quote unquote independent experts with all of the relevant evidence and whether they considered a favorable social security decision. So that's a lot to take in. Let's see how one judge reviewed a claim denial to determine whether or not there had been a full and fair review. I'm gonna talk about the case of Quesada versus Lincoln Life and Quesada was employed by Gentech as a senior farm, uh, material specialist. That was heavy work. He became disabled by intractable back pain and was paid disability benefits from 2015 through early 2025 years of benefits. Lincoln said, we've had enough, we're gonna deny your claim on the basis that there's no support for impairment that results in restrictions and limitations and the inability to perform any occupation. Does that sound familiar? Using the arbitrary and capric standard of review, the judge found that there had not been a full and fair review for four reasons. One, there was no meaningful dialogue with um, him because the denial letter didn't tell him exactly what he had to do to perfect his claim and was unacceptably uninformative. I like that. In this case, Lincoln had not been able to contact his treating physicians and they didn't tell Quata until that until after his claim was denied. Now, they didn't like the bare bones medical records that they were provided, but they never told him that the records had too little detail. The standard boiler part, uh, plate language to submit additional information. Didn't say, Hey, we don't like your records, there's not enough detail. This is what we're looking for. And the judge suggested that Lincoln had a duty to ask for what it needed and to engage him in a meaningful dialogue about why the claim was denied. Number two, there was inadequate consideration of the subjective reports of pain. Now, the denial letter mentions pain a lot of times, but it concluded that the medical records didn't support his pain complaints or impairment. However, Lincoln had acknowledged he had a chronic condition with exacerbations and that his condition was pain producing. So you can't have it both ways. They ignored his supplemental statement and about his pain and that the fact the judge said, look, not only is your position inconsistent, but when I look at the policy or plan, there was no provision that said, Hey, you can't use self-reported pain as the basis of disability. Lincoln created a standard of proof that didn't exist in the policy. Number three, there was no evidence of improvement. That's kind of crazy because their position went all over the place. Sometimes there was improvement, sometimes there wasn't improvement. But he had acknowledged that he had a chronic condition with exacerbations and that his conditions were pain producing. So would you necessarily see evidence of improvement? Doubtful. So why did you tag the denial on the basis that there was no evidence of improvement? The judge was not impressed with his inconsistent illogical reasoning. Number four, they didn't give any weight to the social security uh, decision. Now the social security decision in this case was actually unfavorable and Lincoln said, look, social Security denied the claim. They were right. We were right, we were right in relying on this. And the judge said, oh, wait, wait a second. There's no law that suggests that a social security denial automatically makes an insurance company's parallel Denial reasonable, particularly since insurance companies employ different eligibility requirements. What is the difference in Social Security disability at at step five? The issue is can you engage in other work in the mythical not real world national economy in view of your age, your education, your training and experience? Most disability carriers will define own occupation as the inability to do the material and substantial duties of any other occupation by virtue of your education TR and training, uh, and experience. You didn't hear the word age did you? And many times disability carriers will reject a favorable decision on the basis that age is not a factor in the definition of disability. So obviously the reasoning here did not support a claim denial and the judge said, Hey, you didn't get it right. But unfortunately the judge gave uh, Lincoln a chance to get it right because the decision was remanded. I think we've learned four important lessons about what is the basis for meaningful dialogue. Got it. All right, let's take a quick break before we head into our next section. Welcome back to Winning Isn't Easy. Let's talk about two case studies. And the question was whether a disability policy holder was denied a full and fair review of their claim When Aetna ignored the Social security disability file and the award in an ERISA plan or policy, the the plan administrator or the carrier has to provide you with a full and fair review of a claims denial. So what does that mean? Now if we end up in court, there are two standards of review. One's called the de novo Standard of review where the judge can substitute their own judgment for that of the disability carrier plan. And the more common one is the arbitrary and capricious standard of review. Unfortunately, in that standard of review, a judge has to give deference to a denial even if they disagree with it unless the denial is illogical, implausible or without support. Let's talk about how disability carriers abuse the review process, the full fair and review process in the context of social security disability decisions. In the case of neer, Aetna had denied Neer's claim and she filed an appeal. Now, neer had persistent severe migraines that caused blurred and double vision with extreme pain. It caused drowsiness and she had side effects in medication. Her treating physician said You can't perform your job of driving heavy trucks or operating heavy machinery. Clearly she was a hazard to herself for co-employees in the public. She had been found disabled by the Social Security Administration and she sent in that award and the claim filed to Aetna who of course ignored it. She ultimately filed a lawsuit asking for restatement reinstatement of the benefits. And in the case of Neffer versus Aetna, the judge noted that they had to conduct a full and fair review under ERISA section 5 0 3. The administrator had to consider any disability determination made by Social Security and explain why they agreed or disagreed with that determination. And in this case, there was substantial evidence that they didn't comply with the requirements. Let me give you another example. Because each claim is case specific and the policy terms may differ, the disabling condition may differ, the strength of the medications may differ. In the end, the standard of review and the judge can make the difference in whether the denial is overturned, considering those policy turns the nature of the condition and the, and the individual facts of each case. This is the case of Mesquite versus Aetna. This was a completely different result after the heart attack. Milowski was paid short and long-term disability benefits. He had heart surgery and Aetna terminated his benefits on the basis that he had recovered. Ultimately, he files an appeal. He ends up in federal court. He claims he's been denied a full and fair review. He argues that Aetna did not consider his Social Security disability award, but the judge notes that Aetna's denial letter stated that the favorable Social Security award was considered and he was even noted by one of ana's medical peer review providers. I will tell you that when disability carriers like Aetnas say that it's considered the social security uh, decision, it will try to distinguish that decision by comparing what the judge had available for their review when they made the award and the newer updated information that the disability carrier or Aetna has that the digital social security judge didn't have. And of course, they're gonna argue that age is a factor and a Social security disability claim and not in a disability insurance claim. They're also gonna argue that the judge may have found that the disability policy holder or plan participant is able to engage in sedentary work or light work, but that when the Social Security Administration of the, uh, social security judge applies the grid factors they've grided out based on their age or they may have grided out based on the lack of transferal skills. What the carrier's gonna seize on is a social security judge is finding of their level impairment and say, oh, that supports what our peer review doctor said. They can do light work and they can do sedentary work and they've got transferrable skills. So those are, um, three ways that disability carriers will use and abuse social security, uh, disability awards. And you can see that the results can be completely different depending on the facts of the case in the terms of the policy. I want you to understand though, that disability carriers use Social Security Awards as a whipsaw. They will use them to reduce your long-term disability benefits and then they'll say, we want our money back. We've overpaid you. But by the way, it was a different standard of disability and we've considered this social security a decision, but we're upholding the denial of our claim. So you can see that many games are played by disability carriers, uh, with Social Security decisions in the context of a full and fair review. Got it. All right, let's take a break.

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Nationwide ERISA Attorney Nancy L. Cavey:

Welcome back to winning is indeed. Let's talk about whether or not a long-term disability policy holder or planned participant can sue the disability carrier or the plan for financial harm caused by a wrongful claim denial. Look, I know you purchased your disability policy to provide you with peace of mind if you became disabled, but what's the recourse? If the disability carrier wrongfully denies your claim and you empty out your savings account, your 401k, you get a loan from your, your father-in-law, your mother-in-law, or you're even faced with filing bankruptcy, can you sue them for the financial harm that they caused you? In the case of Laconia versus Lincoln, we find the answer. Laconia had a bilateral retinal detachments and she applied, I'm sorry, he applied for disability benefits. Lincoln said, look, you're not insured under this policy. And he appealed. One year later, Lincoln acknowledged that it was wrong and for some 19 months after he applied for benefits, he finally got his money. So in that interim, he was unable to pay his living expenses and he used his credit cards to pay the bills. He incurred high interest charges on his unpaid balances. If that wasn't enough, when he got that lump sum retro payment to put him in a higher income tax bracket and he had to pay more in income tax, obviously he was angry and he was upset cuz that wrongful claim denial cost him money. So he sued Lincoln in state court. He alleged a breach of contract, bad faith, malicious misrepresentation, gross negligence, a violation of erisa, all except the last are classic complaints in the state law individual disability breach of contract case. But this wasn't an individual disability policy. So the question comes becomes, can you bring a state law claim and an ERISA claim for financial damages as a result of denial? So the answer is no. The state law will allow claims for breach of contract, bad faith, malicious me misrepresentation, gross negligence, but all of those things are preempted by the ERISA law, which is a federal law. In other words, you can't bring these kinds of state law claims in a state law claim arising out of an ERISA claim. The judge also said that, look, you got your retroactive benefits, you got paid what was due under your plan and that's all you can get under the plan because that's what ERISA provides. It doesn't provide for all of the things that you could potentially get if it was a state law claim cuz you had purchased your own individual disability policy. In other words, there are no extra contractual damages that are awarded despite this outrageous and improper and untimely processing of his claim for benefits. I hope you've enjoyed this week's episode. If you like this episode, please leave a review, share it with your family or friends. Remember, our podcast normally will come out wiggly, but we're entering the holiday season. We aren't gonna be posting any new episodes until the first of the year. I wish you all happy holidays and a happy New Year and I look forward to returning in the uh, new Year with new e an educational exciting episodes about disability insurance benefits.