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Benefits Law Blog

Exercise Your COBRA Rights Without Getting Snake-Bitten

By Martina B. Sherman

If you lose your health insurance as the result of job loss (resignation or termination), divorce, death of a spouse, or other qualifying event, the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") can provide a welcome bridge while you work to secure new health coverage. Yet there are many complexities and pitfalls to COBRA of which you should be aware.

The biggest consideration when deciding whether to elect COBRA is cost. Most employers subsidize their employees' health insurance by 50 to 90%, meaning that employees only bear 10 to 50% of the actual cost. Under COBRA, the employee bears up to 102% of their health insurance premiums (the additional 2% is for administrative fees). That increased cost often presents a financial hardship at a time when employees and their families are already vulnerable due to job loss, divorce, or the death of a loved one.

FAQs you should be asking about disability insurance

Obtaining disability insurance is tricky. If you are purchasing coverage to supplement employer-supplied insurance or seeking insurance because you have no other coverage, there are a lot of variables to consider. 

It’s a sad fact, but many Americans give little thought to disability insurance coverage until it is needed. Understanding the following information will strengthen your knowledge of disability insurance and chances of being approved.

Why it's important to 'make your record'

If your long-term disability claim has been denied, you should not take "no" as the insurance company's final answer. In most circumstances, you have the right to submit an appeal challenging the benefit denial; and if the appeal is unsuccessful, a wrongfully denied claim may be litigated in court.

What most people don't realize, though, is that the pre-suit appeal may be their last opportunity to present evidence that a court will consider. Therefore, since a well-prepared appeal is critical to a successful outcome in court, the time to seek assistance is immediately after you receive a denial. Waiting until the appeal is denied to start looking for representation may be too late. An experienced representative will recognize what needs to be included with the appeal such as additional medical evidence or input from a vocational rehabilitation consultant.

How To Challenge a Disability Insurance Denial?

The rationale behind the purchase of disability insurance is to provide an economic safeguard against unforeseen sickness or accidental injury.. When misfortune occurs, economic hardship results.  And if benefits are denied without justification, the premiums invested in insurance coverage appear worthless.  All is not lost, though, because there are ways to fight back.

Step 1: Create an Evidentiary Record

A Primer on Behavioral Health Residential Treatment Cases

Our firm recently won the case of Dominic W v. Northern Trust Co. Employee Welfare Benefit Plan, 2019 WL 2576558 (N.D. Ill. June 24, 2019), which took a health benefit plan to task for denying residential treatment behavioral health claim. The case involved coverage for Sofia W, the daughter of a Northern Trust employee, who experienced severe behavioral problems beginning at age 10 that necessitated psychiatric treatment and prescriptions for antipsychotic and antidepressant medications. Despite treatment, Sophia's condition worsened. The court described the following, which occurred at age 12:

She cried uncontrollably at home and at school, refused to take her medication, entered periods of extreme rage during which she would scream at the top of her lungs, and expressed suicidal thoughts. Her emotional outbursts reached an apex when she swung a hammer at her mother's head. Soon thereafter, Sofia told her mother that she planned to kill her in her sleep.

Deficient vocational review leads to remand

DeBofsky, Sherman & Casciari recently won a victory in the U.S. Court of Appeals for the Seventh Circuit in a case entitled Lacko v. United of Omaha Life Ins. Co., 2019 WL 2439786 (7thCir. June 12, 2019). The plaintiff, Shirley Lacko, stopped working as an senior auditing manager for an accounting firm when the effects of multiple chronic impairments cumulatively rendered her unable to continue working.  Among other conditions, Lacko suffered from gastroparesis, diabetes, rheumatoid arthritis, congestive heart failure, breathing difficulties, anxiety, musculoskeletal impairments, and cognitive difficulties related in part to the medication needed to manage the other conditions.  Although Lacko's short-term disability claim was initially approved and found to be ongoing on two review periods that followed, the STD benefits were terminated before the maximum STD period was reached, and long-term disability benefits were denied altogether.  After unsuccessfully challenging both the STD and LTD denials, Lacko filed suit, but lost on summary judgment in the district court.  She won on appeal, though.

What is the Meaning of "Regular Occupation" in a Disability Insurance Policy?

Most people assume that if they become unable to perform their usual work on account of sickness or injury, that they would qualify to receive benefits under their work-sponsored long-term disability insurance coverage. That may not be the case, though. In Nichols v. Reliance Standard Life Ins. Co., 2019 WL 2223614 (5th Cir. May 23, 2019), the court permitted a disability insurer to classify the work of an inspector in a poultry processing plant as that of a "sanitarian," a quite different occupation. Although the district court delivered a blistering indictment of Reliance Standard's review of Juanita Nichols's claim for disability benefits (2018 WL 3213618 (S.D. Miss. June 29, 2018)), the Court of Appeals reversed and awarded judgment to the insurance company. The lower court was so incensed by the insurer's behavior, it cited over 100 examples of Reliance Standard's arbitrary and capricious conduct in other litigation and found similar misconduct in its treatment of Nichols. The Fifth Circuit had a different view, though.

Is death resulting from autoerotic asphyxiation a self-inflicted injury?

Is death resulting from autoerotic asphyxiation gone wrong an accident or is coverage under an accidental death insurance policy precluded by the policy's "self-inflicted injury" exclusion. A recent appellate court ruling overturned a lower court's determination that the language of the exclusion is ambiguous and therefore had to be resolved in favor of the insured under the doctrine of contra proferentem. In Tran v. Minnesota Life Ins. Co., 2019 WL 1894769 (7th Cir. April 29, 2019), the insurer denied benefits, claiming the insured's unintended self-strangulation was an "intentionally self-inflicted injury," an exclusion under the policy. The court of appeals, disagreeing with the lower court and with rulings from the Second and Ninth Circuits on this issue, reversed the district court's decision holding that a reasonable person would interpret [the decedent's] cause of death, autoerotic asphyxiation, to be an "intentionally self-inflicted injury."

Social media no substitute for sound medical records

When used appropriately, social media may sometimes prove to be a valuable tool to investigate personal injury and disability insurance claims. However, when an insurer improperly denies a claim for benefits based on an unjustified reliance on social media postings, the claimant may be able to turn the tables on the insurance company.

In Williamson v. Aetna Life Insurance Co., 2019 WL 1446957 (D. Nev., March 31, 2019), a federal court in Nevada took an insurance company to task for terminating a disability insurance claimant's benefits without verifying the accuracy of information contained in the plaintiff's social media postings. 

Post-Traumatic Stress Disorder and LTD Benefits

In recent years, there has been greater recognition of post-traumatic stress disorder, commonly referred to as PTSD. Many veterans returning from overseas conflicts experience PTSD, but the condition is not limited to former military. PTSD may occur following a significant injury or psychological shock and results in persistent mental or emotional distress. According to the Sidran Traumatic Stress Institute, 20 percent of Americans will cope with PTSD in their lifetime with 13 million people experiencing it at any given time.

If you have experienced a severe injury or traumatic event in your life, the effects of PTSD are very real and may affect your ability to work. Despite increased awareness of PTSD, though, disability claims resulting from that condition are often complex and difficult to prove.

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