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Chicago Bad Faith Insurance Law Blog

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.

HB 1332 Provides Hope for Eating Disorders. Contact Governor Rauner to Show Your Support

Individuals who suffer from eating disorders often run into difficulties securing coverage from their health insurers for treatment, especially for residential care. Last year, ERISA lawyer Mark DeBofsky of DeBofsky, Sherman & Casciari, PC contacted Illinois State Representative Laura Fine and Illinois State Senator Julie Morrison with an idea to amend the Illinois Insurance Code to provide health insurance coverage for eating disorders in line with the mental health parity law. That idea ultimately became HB 1332, introduced in the Illinois House of Representatives by Representative Fine and in the Illinois Senate by Senator Morrison. Both houses of the Illinois General Assembly recently passed HB 1332 and it awaits signature by Illinois Governor Bruce Rauner in order to become law.

HB 1332 Brings Eating Disorders in Line with Mental Health Parity Law

A patient who requires residential care to receive therapy and rehabilitation after undergoing surgery will likely receive those services. Group health insurance policies provide reimbursement for necessary care related for physical conditions. The idea behind the mental health parity law is to give individuals with mental health conditions similar respect. However, coverage for residential care related to eating disorders often falls through the cracks and claims for such necessary treatment are often denied.

Headaches and Disability

Proving an entitlement to disability benefits on account of headaches can be extremely challenging.  Unlike many other disabilities that can be objectively diagnosed by MRI, x-ray, or blood tests, "objective" proof of headaches can be elusive.  The proof difficulties can be even more challenging if the benefit plan requires objective medical evidence.  How then can a claimant establish disability on account of severe headaches?  A recent appellate ruling Corey v. Sedgwick Claims Mgmt. Svcs., Inc., 858 F.3d 1024 (6th Cir. 2017), offers some helpful guidance and instruction.

Worker files lawsuit to fight denial of LTD insurance for PTSD

Awareness of Post Traumatic Stress Disorder has increased in recent years, especially in light of news reports about veterans and warriors suffering from the condition after serving our country. What many people are not aware of is the fact the PTSD is not solely linked to military service. Any terrifying or traumatic event can serve as the basis for PTSD – ranging from being in a car accident to witnessing the death of a loved one.

Professionals estimate that 70 percent of adults have experienced at least one traumatic event during their lives. Most events do not lead to PTSD. However, roughly 20 percent of people who experience these events develop some level of PTSD. When the effects of this mental health condition begin to impact a person’s ability to continue working, it is important to evaluate whether the worker has long-term disability insurance coverage.

Fibromyalgia recognized as a disabling impairment

Attorneys Mark DeBofsky and Bridget O'Ryan secured a victory in the U.S. Court of Appeals on May 18, 2017 in a disability benefit case involving fibromyalgia - Kennedy v. Lilly Extended Disability Plan, 2017 WL 2178091 (7th Cir. May 18, 2017)(available at Final Opinion). The court began its ruling by announcing that this case is about fibromyalgia, and then proceeds to explain the nature of the condition, its chronicity, and the severity of the pain it causes. Cathleen Kennedy was a senior human resources executive at Eli Lilly & Company, one of the world's leading pharmaceutical companies, before she became disabled due to fibromyalgia. Lilly is very familiar with fibromyalgia since it markets Cymbalta to treat the disease.  Lilly has also retained Dr. Daniel Clauw, a professor of rheumatology at the University of Michigan, as a consultant on fibromyalgia.  Dr. Clauw has publicly stated that many persons who suffer from fibromyalgia "end up needing to stop working because of this condition" and has also remarked that fibromyalgia "is not only very common but is typically also very disabling." 

Despite Lilly's initial approval of Kennedy's claim for disability benefits, which she submitted when she stopped working in 2008 after a 26-year career of steady advancement at the company, benefits were terminated after several years following a determination that she was no longer unable "to engage, for remuneration or profit, in any occupation commensurate with the Employee's education, training, and experience." The district court overturned that finding; and the court of appeals affirmed the lower court.

Surveillance, social media investigations, and tactics insurance companies use to deny disability insurance claims

Insurance companies often hire private investigators to find ways to deny or discontinue payment of disability insurance benefits. The tactics that big business uses to develop evidence seems to expand as technology changes. For years, insurance companies have sent investigators to conduct undercover surveillance stake outs, hoping to secure video evidence that a claimant is not really disabled, or is less injured than he or she claims. However, in a court ruling obtained several years ago by our firm, Skibbe v. Metro. Life Ins. Co., No. 05 C 3658, 2007 WL 2874035, at *11 n. 3 (N.D. Ill. Sept. 24, 2007), the court pointed out: 

The Fifth Circuit Opens the Door to De Novo Review

A recent decision issued by the U.S. Court of Appeals for the Fifth Circuit illuminates the importance of the standard of judicial review applied to resolution of cases seeking benefits under ERISA.  In Ariana M v. Humana Health Plan of Texas, Inc., 2017 WL 1423765 (5th Cir. April 21, 2017), although the court of appeals upheld the benefit plan's denial of coverage for a continued partial hospitalization for mental health treatment, the court issued a concurring opinion that suggested the Fifth Circuit should grant an en banc rehearing to determine the proper standard of judicial review, which, if granted, could very well change the outcome of this case.

DeBofsky, Sherman & Casciari, PC