Welcome to Season 4, Episode 5 of Winning Isn't Easy. In this episode, we'll dive into the complicated topic of "Full and Fair Review - Statutory Obligation".
Host Nancy L. Cavey, a seasoned attorney with extensive experience in disability claims, discusses ERISA's saving grace - a claim regulation stating that any denied policyholder or plan beneficiary must be given the right to a full and fair review during the claim examination process. Regardless of a policyholder's purported right to a full and fair review, disability carriers will often toe the line of acceptability regarding what constitutes said full and fair review - to demonstrate, host Nancy L. Cavey will walk through a number of case examples.
In this episode, we'll cover the following topics:
1 – What Does A “Full and Fair Review” Mean to a Denied ERISA Disability Claim
2 – Second Time around on A Disability Claim, and How One Federal Judge Threw the Book At A Disability Benefit Claim Administrator Who Missed Deadlines, Edited and Changed Their Doctor’s Reports, and Failed to Produce Request Plan Documents
3 – You’ve Got to Exhaust Your Administrative Remedies by Filing Appeals in Your ERISA Disability Claim, and Why You Can Blow up Your Case if You Don’t
Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.
Resources Mentioned In This Episode:
LINK TO ROBBED OF YOUR PEACE OF MIND: https://caveylaw.com/get-free-reports/get-disability-book/
LINK TO THE DISABILITY INSURANCE CLAIM SURVIVAL GUIDE FOR PROFESSIONALS: https://caveylaw.com/get-free-reports/disability-insurance-claim-survival-guide-professionals/
FREE CONSULT LINK: https://caveylaw.com/contact-us/
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Speaker A [00:00:10]:
Hey, I'm Nancy KV, national ERISA and individual disability attorney. Welcome to winning isn't easy before we get started, the Florida bar has said that I have to give you a legal disclaimer, so here it goes. This podcast is not legal advice, but nothing is ever going to prevent me from giving you an easy to understand overview of the disability insurance world, the games that disability carriers play, and what you need to know to get your disability benefits. So off we go. Today I'm going to talk about the full and fair review requirement and how courts interpret the carrier's statutory obligation to you. First, I'm going to talk about what does a full and fair review mean to a denied ERISA disability policyholder or beneficiary. Secondly, I'm going to talk about second time around on a disability claim and how one federal judge threw the book at a disability benefit claim administrator who missed deadlines, edited and changed their doctor's reports, and failed to produce requested plan documents. And lastly, I'm going to talk about why you've got to exhaust your administrative remedies by filing appeals in your claim and why you just can't blow up your case and send it right to federal court without filing an appeal.
Speaker A [00:01:24]:
So let's take a break before we get started with this week's episode.
Speaker B [00:01:30]:
Have you been robbed of your peace of mind from your disability insurance carrier? You owe it to yourself to get a copy of robbed of your peace of mind, which provides you with everything you need to know about the long term disability claim process. Request your free copy of the book@kvlaw.com. Today.
Speaker A [00:01:51]:
Welcome back to winning isn't easy. Ready to get started? I am. What does full and fair review mean to a denied ERISA disability policyholder or beneficiary? Let's go back to basics. The Employer Retirement Income Security act, which governs employer sponsored benefits like disability insurance, is not friendly to the very people you it was designed to benefit. However, one of the saving graces in ERISA are the ERISA claim regulations, which require that a denied policyholder or plan beneficiary be given a full and fair review during the claims review process. So I'm going to tell you a story because I think we can learn many lessons from stories, and this is the typical story of a claim denial. And I want you to understand the games that disability plans or carriers play. So Ms.
Speaker A [00:02:47]:
Jett was a legal assistant who had back problems for which she underwent back surgery. She was paid short and long term disability benefits, and she even applied for and was granted Social Security disability benefits. But the disability carrier, United of Omaha was done paying benefits. As is customary, United of Omaha had jets claim reviewed by two liar for hire medical reviewers who never examined her and as expected, opined that she could do her sedentary job as a legal assistant. She appealed and specifically asked that United Omaha provide her with any new medical opinions they'd obtained and provide those to her 30 days before the appeal period ended so she could address those in her appeal. So what did United of Omaha do with Jet's request for the updated medical opinions? Well, United told her to stick it. They didn't have any obligation, in their view to provide her with any updated opinions it had gotten and they weren't going to give them to her. So there, of course, United refused to give her the report of the liar for hire not so independent medical examiner Dr.
Speaker A [00:03:56]:
Thompson. Before it issued that final denial, Dr. Thompson had opined, as you would expect, that she could engage in seated activities with occasional sitting and standing. Ultimately, Jet files a lawsuit in federal court and she says, look, judge, the failure to provide me with this report and an opportunity to respond deprived me of a full and fair review of my claim. The federal court agreed with mutual because mutual hadn't relied on Thompson's report to find a new reason to deny the claim. But they had used the report to buttress its earlier conclusions that she could do sedentary work and the court said that that was okay. Well, fortunately, she didn't give up and she appealed to the federal district court. So what did the federal district court do with this full and fair review argument? Now the first Circuit, which is normally not friendly to ErISA disability policyholders or beneficiaries, was actually upset.
Speaker A [00:05:01]:
They weren't impressed with either mutual or the federal district judges ruling in this case. The court said, look, the ErISA regulations provide that a claimant has to be provided all of the documents that were submitted, considered or generated in the course of making the benefit determination whether or not it was relied upon. So the first Circuit in jet versus united of Omaha held that the full and fair review regulations applied to the initial appeal and the determination on appeal. That mutual refusal to provide the report of Dr. Thompson violated that regulation and it deprived her of the opportunity to respond that Mutual of Omaha had to provide her with a copy of the report. Even if the report didn't provide a new reason for the claim's denial. The court found that she was prejudiced by mutuals of Omaha's fair to provide the report and directed mutual of Omaha to provide her with the report and give her an opportunity to respond to the report and told Mutual of Omaha, you need to make a new decision now. I think that was a great decision for Ms.
Speaker A [00:06:11]:
Jett and for those people who live in the first circuit. In my view, a phenomenal and unexpected decision from a court that is not friendly to disabled policyholders or planned beneficiaries. But for all of us who are outside of the first circuit, I think it's still a good decision. That reminds disability carriers that full and fair review means just that, that they have to produce information that they obtain that they rely on. Even if they don't rely on it, they still have to produce it because it was submitted, considered or generated in the course of making the benefit determination. So great win. In the next segment, I'm going to talk about the second time around on a disability claim and how one federal judge threw the book at a disability benefit claim administrator who, on remand, missed deadlines, edited and changed their doctor's reports and failed to produce and requested planned documents. Let's take a quick break before we learn how one disability carrier got their head handed to them.
Speaker A [00:07:37]:
Back to winning isn't easy. We're going to talk about second time around on a disability claim, on remand, and how one federal judge threw the book at a disability benefit claim administrator who screwed up, who missed deadlines, edited and changed their doctor's reports and failed to produce requested plan documents. Now, when you take a case that has been denied to circuit court, federal circuit court, the federal judge can do one of several things. The judge can uphold the denial, the judge can award the benefits and the judge can remand or send a denied claim back to the administrator or the carrier for a redetermination. I hate that. I just wish the judges would make a decision one way or the other. And this is an example of why I hate it. The judge expects that the disability carrier of the plan gets the message on a remand.
Speaker A [00:08:34]:
And I'm going to talk about the case of Lakey versus the benefits committee, which is out of the Southern District of Ohio. Now, this case has been up and down in the court like a ping pong ball. The court found in 2019 that the claim denial was arbitrary and capricious, and it sent the case back to the plan administrator. They blew the deadlines for making a new claim determination. They denied the claim 270 days after the remand, and as a result, the judge decided that the arbitrary and capricious standard of review was no longer applicable and the judge were going to exercise their own independent judgment in deciding if the denial was right or wrong. Judge was pissed. Leakey had asked for documents that formed the basis of the claims denial and the claims administrator didn't supply those until after the lawsuit was filed. That's way too late to do anything with it.
Speaker A [00:09:34]:
This denied her of a full and fair review of her claim because she couldn't respond to the evidence that the plant administrator had relied on in denying the claim and addressing that in her appeal, the judge granted her claim for statutory penalties under the ERISA section 502 C for the failure to provide the plan documents. Now there was a significant delay and the judge awarded a statutory penalty of $110 a day and awarded her $40,370 in statutory penalties for not giving her this information. Now the judge was put off by several other things, one of which was the doctor's opinions were curated to create an after the fact reason to justify the claims denial. You can't do that. Either you deny the claim based on what's in the claims file and explain that, or you don't. And you can't create after the denial reasons, post hoc denials or reasons for the denial or reasons to justify the claims denial. And worse yet, the judge was put off by changes the doctor made to his deposition testimony that allowed the carrier to further buttress the basis of their opinions that he could do sedentary work. So not only did they curate the doctor's opinions, they curated the deposition.
Speaker A [00:11:01]:
And that really angered the judge. And obviously the judge awarded her her benefits and her attorney was paid $107,000 in attorneys fees. This was outrageous conduct that really got to the judge and he really threw the book at him, as he should. So it cost them over $40,000 in penalties. It cost them her back benefits, it cost them $107,000 in her legal fees. And of course they had to pay their own legal fees. I think that this is a great example of what a disability carrier or planned administrator should not do in handling a claims file, particularly on remand. In the next segment I'm going to talk about exhaustion of administrative remedies, exhaustion of your finances, exhaustion of your motions, exhaustion, and how you just can't blow up your case by saying, I'm out of here, I'm going to federal court.
Speaker A [00:11:56]:
First, let's take a break.
Speaker B [00:12:02]:
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Speaker A [00:12:39]:
Welcome back to winning isn't easy. I'm going to talk about why you have to exhaust your administrative remedies by filing an appeal in your disability claim and why you just can't blow up your case and go right to federal court without passing go the Employee Retirement Income Security Act ERISA requires that a denied disability policyholder or beneficiary file an appeal of the denial and do so on a timely basis. If you don't file the appeal or you don't file it timely, you are going to lose. And it's as simple as that. But let me explain. In the case of Tyce versus at T Corporation, Tyce was paid short term disability benefits. Her claim was then denied. The plan had a two level appeal process and Tyce did not file the second level appeal.
Speaker A [00:13:31]:
So when she filed a lawsuit, the disability plan said, hey, she hasn't exhausted her administrative remedies. Judge dismiss this claim and the judge said, you're right, Tyson made two mistakes. First, she didn't exhaust her administrative remedies by filing the second level appeal. And secondly, she didn't file her lawsuit within the time frame provided in the plan. So either mistake one or mistake two were fatal to her claim and the judge upheld the denial of the claim. And this is a reason why a denied policyholder really needs the help of an experienced ERISA disability attorney. The appeal must be filed. Must be filed timely.
Speaker A [00:14:14]:
It's the trial of your case. Nothing new can be added once the appeal period has run. So you can really make three mistakes, not exhaust your remedy, not file the appeal, and just basically ignore the whole claims process, which is central to the EriSA claims process. And what will happen is, regardless of how legitimate your claim is, the judge will dismiss this on what appears to you to be a technical basis, but which is really an important component of the ERISA disability appeals process, fair or not. So you need the help of an experienced ERISA disability attorney. Timely if your claim has been denied. Otherwise, you've just killed your case. I hope you've enjoyed this week's episode of winning isn't easy.
Speaker A [00:15:05]:
If you've enjoyed this episode, consider liking our page, leaving a review, or sharing it with your friends and family. Also, why don't you subscribe to this podcast that way, you're going to be notified each time one of these great new episodes comes out. I hope you tune in to next week for another insightful and exciting episode of Winning isn't easy.