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Chicago Bad Faith Insurance Law Blog

Obtaining LTD benefits for Multiple Sclerosis can be complex

Multiple Sclerosis is a serious neurological disorder that is often disabling.  The Multiple Sclerosis Foundation estimates that more than 400,000 people in the United States suffer some level of symptoms from the condition. Not all cases lead to disability. However, the condition can progress to the point that continuing to work is no longer an option for some people. Unfortunately, a diagnosis alone does not automatically lead to a long term disability benefit approval and insurers may resist paying benefits if they deem the evidence of functional impairment inadequate. 

The disease does not follow a linear direction, and progression of the condition can vary widely. Symptoms are often episodic, with exacerbations and relapses. Because symptoms wax and wane, this often presents a potential pitfall for individuals seeking LTD benefits.

Is Death Resulting from Autoerotic Asphyxiation "Accidental"?

Anecdotally, the most litigated accidental death insurance claims involve drunk driving. The next most prevalent type of litigated accidental death claim are cases involving autoerotic asphyxiation. The recent ruling in Tran v. Minnesota Life Ins. Co., 2018 WL 1156326 (N.D. Ill. March 5, 2018) was one such case.

The plaintiff was the widow of an individual who hung himself while engaging in an act of autoerotic asphyxiation. Although the police were called to the decedent's home "for suicide by hanging," the medical examiner determined the cause of death was "[a]sphyxia due to hanging, autoerotic in nature" and further deemed the manner of death was an "accident." The defendant's consulting physician also concluded that the decedent's death was due to autoerotic asphyxiation; however, the claim for accidental death insurance was denied on the ground that it fell within an exception in the policy for "suicide or attempted suicide or other self-inflicted injures." The insurer deemed the death the result of a self-inflicted injury and therefore excluded. The denial was upheld following the plaintiff's appeal. The court reversed

The 5th Circuit finally gets de novo review right (somewhat)

In Ariana M v. Humana Health Plan of Texas, Inc., 2018 WL 1096980 (5th Cir. March 1, 2018), a divided Fifth Circuit issued an en banc ruling that fiinally overturned Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552 (5th Cir. 1991) and concurred with every other Circuit that Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) applies the default de novo standard of judicial review to both legal and factual determinations, thus paving the way for the Texas ban on discretionary clauses (TEX. INS. CODE § 1701.062(a), along with similar bans by 25 other states - Nat'l Ass'n of Ins. Comm'rs, Prohibition on the Use of Discretionary Clauses Model Act ST-42-3-6 (2014), http://www.naic.org/store/free/MDL-42.pdf.) to trigger de novo review of benefit denials of health and disability benefit claims.

The Importance of Medical Records in LTD Insurance Claims

When a person is unable to work due to a disabling injury or medical condition, obtaining benefits under an individual disability income insurance (IDI) policy or a group long-term disability (LTD) insurance policy is of a major concern for financial stability. The claims process is often foreign for disabled claimants. Filling out the forms and continuing to receive medical tests and treatment often seem like the only steps a person needs to take to obtain LTD benefits for a valid claim.

The insurance companies, however, are not necessarily going to accept the opinions of the claimant’s treating doctors at face value.  Medical doctors employed by the insurance companies who have never treated, or even spoken to the claimant or the treating doctors review not only the claim forms, but also the entire medical file. Your doctor’s notes compiled during the course of treatment are part of the medical evidence being considered. For that reason, it is critical to work with your doctor to help insure that the medical file is complete and documents all relevant symptoms and clinical findings.

Beware of social media when applying for disability insurance benefits

A recent article published by Bloomberg Law offers a stark warning to disability insurance claimants who use social media.  The article by Jacklyn Wille entitled "Facebook Has a New Friend: Disability Insurers" (https://www.bna.com/facebook-new-friend-n73014475033/) discusses insurers' use of social media to investigate disability insurance claimants.  And it is becoming more common that social media posts are cited as the basis for denying disability insurance payments. 

As social media usage has grown, disability insurers have increased their reliance on claimants' postings to furnish grounds for challenging disability claims.  Facebook or Instagram postings of photographs of vacations can be fodder for suspicious insurers.  Linked In posts may also create a false impression that someone is continuing to work while claiming to be disabled.

The Importance of ERISA Claim Appeals in Disability Benefit Claims

Qualifying for disability benefits often requires claimants to face many hurdles. An initial claim denial is not the end of the road, though. If you have group coverage, it is likely governed by ERISA, the Employee Retirement Income Security Act. One of the benefits of ERISA is that if a claim is denied, the claimant is statutorily entitled to a full and fair review of the denial. Taking advantage of that right and appealing the benefit denial is not only of critical importance in ultimately achieving success; it is a necessary precursor to filing a lawsuit to challenge the denial of benefits. And if done right, the claim will often be approved without the need for litigation. But even if the appeal is not immediately successful, it will set the stage for a successful benefit recovery in court. 

Be aware of timeframes

Mental versus Physical Disabilities

DeBofsky, Sherman & Casciari attorney William Reynolds recently won a significant victory on behalf of one of the firm's clients.  In Watson v. Reliance Standard Life Ins. Co., 2017 WL 5418768 (N.D. Ill. November 14, 2017), the court overturned a disability insurer's finding that Cheryl Watson suffered from a psychiatric impairment; thus, her benefits were limited to a maximum 24-month duration. After an earlier portion of the proceedings resulted in a remand and ultimately an award of benefits for 24-months, the plaintiff returned to court to challenge Reliance Standard's invocation of the mental or nervous disorder limitation.  The matter was heard by the court as a trial on the papers pursuant to Rule 52 of the Federal Rules of Civil Procedure accompanied by oral argument; and the court entered findings of fact and conclusions of law in favor of the plaintiff based on the evidence presented.

Common Problems People Encounter when Seeking Long-Term Care Benefits

Given the high cost of nursing home care, assisted living, or home health care, many people have purchased long-term care insurance with the expectation that it will cover the costs of their care should they ever need such services. Unfortunately, those expectations have not always been met because insurance companies have challenged claims and shown reluctance to pay benefits under long-term care policies.

There are a wide range of reasons that insurance companies may raise as the basis for denying claims; and while some excuses are valid, in other situations, insurers have unfairly delayed payments, denied claims altogether, or discontinued paying benefits under long-term care insurance policies. It is important to note that not all LTC insurance policies are identical. As the senior health care industry has developed, many older policies did not include services such as assisted living facilities or even home health care aides. Poorly drafted contracts can create ambiguities that the insurance provider may try to use to serve their own interests, at the expense of policyholders who have paid premiums in good faith for years.

The Complexity of ERISA Preemption

A recently issued appellate court decision illustrates the complexity of ERISA preemption.  Williby v. Aetna Life Ins. Co, 2017 WL 3482390 (9th Cir. August 15, 2017) involves the interplay between ERISA's preemption provision and the savings and deemer clauses found in 29 U.S.C. § 1144.  The underlying matter concerned a claim for short-term disability benefits under Boeing's self-funded STD plan.  Although the plan contained a clause giving Aetna, the plan's administrator, discretion to determine benefit eligibility, the district court applied the de novo standard of review based on its interpretation of the applicability of California Ins. Code § 10110.6, which disables discretionary clauses insurance policies, certificates and in "contracts."  The court of appeals reversed that finding.

What happens when anticipated medical improvement never happens?

That question was answered in a recently reported federal court ruling from Michigan, Sun v. United of Omaha Life Ins. Co., 2017 WL 3050477 (E.D. Mich. July 19, 2017).  The case involved Julia Sun, who worked as a registered nurse caring for quadriplegic patients. After she injured her foot in 2010, and because she also suffered from lupus, Sun qualified both for long-term disability benefits as well as for Social Security disability insurance benefits.  However, in February 2013, despite prior findings that there were no occupations Sun could perform that met the policy's wage requirements, United terminated her benefits.  The court overturned that decision.

DeBofsky, Sherman & Casciari, PC