Life, Health, Disability Insurance & ERISA

Graybill & Hazlewood, LLC represents individuals in employee benefit matters, principally Long Term Disability insurance claims, appeals, and litigation. We also represent individuals in disputes involving pension plans, health insurance, life insurance, and COBRA. People typically obtain these products through their employment.

We have experience dealing with large insurance companies such as: Aetna, Blue Cross, Cigna, Guardian, Hartford, Lincoln, Mutual of Omaha, Metlife, Prudential, Reliance Standard, and Unum.

ERISA is a federal law that probably affects your claim to life, health, and disability insurance benefits. We are familiar with the ERISA litigation process.

People often think that disability insurance is like any other type of insurance; for example, automobile and homeowner’s insurance. Nothing could be further from the truth. The Employee Retirement Income Security Act of 1974 (ERISA) governs the claim and litigation process for most employer-sponsored insurance. Congress intended for ERISA to help employees. But many would say those good intentions have not been realized. ERISA allows insurance companies to set short deadlines for appealing claim denials. The failure to appeal a claim on time can bar a subsequent lawsuit for benefits. ERISA also protects benefit plans from laws that affect nearly every other enterprise in America (for example, fraud and consumer protection laws). ERISA also takes away the right to a jury trial in employee benefit lawsuits. These observations are not just from the claimant’s perspective. Consider this once-privileged memorandum authored by a UnumProvident executive that says “the advantages of ERISA coverage in litigious situations are enormous.”

The typical ERISA lawsuit is brought by a plan participant against the benefit plan, the relevant insurance company, and sometimes other entities. The typical claim is brought under a provision of the statute that allows a participant to “recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” ERISA 502(a)(1)(B). But ERISA also allows courts to enjoin plan administrators and fiduciaries from violating their statutory obligations, and it allows courts to award civil penalties and attorneys fees under certain circumstances. There are several other aspects to ERISA that may be of assistance to claimants in employee benefits matters, which can be overlooked by many attorneys.

Case Study: Meyer v. UNUM

We stay up to date on legal developments that affect the rights of individuals in employee benefit disputes. Consider the case, Meyer v. UNUM Life Insurance Company of America, et al, Case No. 12-CV-1134-KHV-KGG, United States District Court, District of Kansas. We represented John Meyer, who is disabled from a 2010 stroke. UNUM denied Meyer’s claim by applying the plan’s preexisting condition exclusion. The Complaint we filed on Mr. Meyer’s behalf alleges that UNUM’s decision was wrong because there is no evidence to support the application of that exclusion, and that UNUM’s financial conflict of interest tainted the decision-making process. The conflict of interest arises from UNUM’s dual role (i.e., it “wears two hats”) in that it decides eligibility for benefits under the Plan, and also pays for approved claims–out of its own pocket. The Court agreed with our arguments and, on March 31, 2015, ruled that UNUM wrongfully denied Meyer’s claim. Meyer was awarded benefits and UNUM was ordered to pay Meyer’s attorneys fees.

According to a 2008 United States Supreme Court decision, UNUM’s documented history of biased claims administration (law review article) is an important factor in evaluating whether, and the extent to which, UNUM’s conflict of interest tainted its decision to deny benefits. In the Meyer case, we discovered that the “independent” cardiologist earned hundreds of thousands of dollars per year reviewing files for UNUM (click here for 1099’s reflecting all the money UNUM had paid this file reviewer over the years). This was a major red flag indicating bad faith in the decision to deny benefits.

We discovered that in a similar 2012 case, Lafferty v. UNUM, the same cardiologist/file reviewer involved in Meyer’s claim had equated Mr. Lafferty’s treatment for risk factors with the existence of underlying disease. UNUM denied Mr. Lafferty’s claim, like Mr. Meyer’s claim, on the basis of the preexisting condition exclusion. The Lafferty court, like the Court in Mr. Meyer’s case, rejected UNUM’s analysis. The file reviewer testified that UNUM had never followed up with him to explain that the prophylactic treatment of risk factors is not the same as care for the disability itself. Instead of telling this file reviewer that he is not supposed to equate the treatment of risk factors with the treatment of the disease itself, UNUM tried to erase the Lafferty opinion from history.

The settlement that UNUM entered into with the plaintiff in the Lafferty case required the plaintiff to join in a motion to the court to vacate its decision so that no one would know about it. The court blessed this request and ordered online legal research services not to publish the opinion. Fortunately, we obtained a copy of the Lafferty opinion before UNUM tried to erase it from history.

Proof of bias can take many forms, even in the face of insurance company attestations that insurance companies make to the contrary. Consider this set of emails that was filed on public record in a Massachusetts ERISA lawsuit. The emails show that Sun Life Assurance Company of Canada offered a lottery to its employees — with each employee receiving additional chances to win based on the number of claims they denied.

Please contact the ERISA attorneys at Graybill & Hazlewood, LLC, to discuss your life, health, or disability insurance matter.