New Jersey Disability Lawyer Blog

A four year Targeted Market Conduct Examination of CIGNA and Life Insurance Company of America (LINA),'s Disability Income Insurance Claim Handling Practices was just concluded by the Departments of Insurance of Maine, Massachusetts, California, Connecticut and Pennsylvania. Review the Regulatory Settlement Agreement of May 13, 2013. See CIGNA's discussion of this in its SEC filing. As a result of this close examination, significant changes must be made in their handling of disability claims, as set forth in the Regulatory Settlement Agreement. Cigna will pay significant fines and set aside 77 million dollars to pay disabled claimant's whose claims were denied.

This agreement is far-reaching in its application to ongoing disability claims managed by CIGNA because it creates a baseline of claims handling protocols which must be followed. We will use this benchmark in our review of our client's claims, not only administered by CIGNA and LINA, but all other companies, including Hartford, Reliance Standard, Prudential and Unum, to name a few.

The last time this occurred was in 2005, when all 50 states joined in a massive Market Conduct Study of Unum's claims handling practices. What emerged was the Multistate Regulatory Settlement Agreement, and the review of hundreds of thousands of claims denied during a certain time period.

Today, the plan of corrective action for CIGNA and LINA requires a remediation program applied to previously denied claims from Jan. 2009 through December 2010 for citizens of the states that participated in this examination.

In addition, CIGNA and LINA must take immediate corrective action which will apply across the board to all claims, no matter where the claimants reside. The corrective actions include:
1) giving the awards of SSDI benefits "significant weight" in a claimant's favor,
2) enhancing the procedures utilized for gathering of medical information, reviewing the medical information provided and documenting the claim personnel's conclusions,
3) establishing guidelines for the use of external medical resources in the use of IME or FCE evaluations. This includes utilizing individuals to conduct these examinations without regard to the results of previous IMEs and FCEs conducted by these individuals.
4) Additionally the companies will give "clear and express notice to claimants of the information to be provided by the claimants during claim review and on appeal.

Importantly, the "enhanced claim procedures" require that the companies will provide all professionals providing evaluations of the claimant's impairment all available medical, clinical and vocational evidence in the Disability Claim File, both objective and subjective concerning impairment.
The Monitoring States will conduct a re-examination of the issues addressed by the Agreement in March, 2015.
The agreement states that it does not constitute an admission of liability nor that CIGNA committed any wrongdoing or represented a pattern and/or business practice that would violate any insurance laws, statutes or regulations.

While we applaud this agreement as a step in the right direction, we wonder why all of the states including New Jersey did not participate in this action. We have handled hundreds of CIGNA/LINA claims at our firm, and there is a clear pattern of unjust denials of claims for disabled consumers of our state. We have appealed the wrongful denials, and even with significant evidence in support of the claims, CIGNA would often uphold the denials, forcing us to file litigation in Federal Court, where, we always have been able to obtain justice for our clients. Maybe CIGNA will now pay closer attention to its claims handling and less attention to the bottom line, saying themselves the obligation to pay claims.

Contact us at Bonny G. Rafel LLC to review your claim and help you obtain the long term disability benefits you deserve. We can help you with the Reassessment of your claim if you qualify under the Reassessment Program.

The Supreme Court of the United States recently granted certification in the matter of Heimeshoff v. Hartford Life & Accident Ins. Co., 496 Fed. Appx. 129 (2d. Cir. 2012), in which the Second Circuit determined that Heimeshoff, who had been denied disability benefits in 2005, had no remedy against Hartford because she was in violation of her policy's three-year time-limit--known as a statute of limitations--for bringing suit to contest the denial of her benefits. The applicable policy contained a statute of limitations requiring Heimeshoff to file suit within three years of after her "proof of loss" was required to be given. Heimeshoff applied for and was denied Short Term Disability benefits in 2005. She filed an administrative appeal contesting the denial as required under the policy, and received a final denial in 2007. She filed suit in 2010, less than 3 years after the final denial. Although Heimseshoff contended that the three years did not begin to run until she received the final denial and her right to sue was triggered, the Second Circuit read the limitations provision literally and concluded that "it does not offend the statute to have the limitations period begin to run before the claim accrues."

The Supreme Court will resolve a split in the law amongst Circuit Courts nationwide. For example, recent cases in the Third Circuit have held that in the case of an insurance company denying disability benefits upon a finding that the insured is not medically disabled under the terms of the policy, the statute of limitations does not accrue until the plaintiff receives a final denial of benefits on administrative appeal. In Whittaker v. Hartford Life Ins. Co., 2012 U.S. Dist. LEXIS 166983 (E.D. Pa Nov. 26, 2012), the court found Whittaker's claim timely by holding that the statute of limitations began to run at the time of Hartford's final denial. Among other considerations, the court explained, "Although Whittaker's benefits were first terminated on August 7, 2008, her case would have been dismissed for failure to exhaust her administrative remedies had she filed this lawsuit before her administrative appeal was denied on June 2, 2009. To start the running of the limitations period before the conclusion of the administrative appeals process would encourage plan administrators to drag their feet in deciding administrative appeals so as to minimize the amount of time a plaintiff has to prepare her case." In Rumpf v. Metropolitan Life Ins. Co., 2010 U.S. Dist. LEXIS 74388 (E.D. Pa. Jul. 23, 2010), the initial denial of Rumpf's benefits stated that she had the right to appeal the denial and to file an ERISA suit in the event the appeal was denied. The letter upholding the denial on appeal stated that Rumpf had the right to file an ERISA suit at that time. When Rumpf filed suit four years after the final denial, the defendants claimed that the statute of limitations had lapsed by calculating from the time of the initial denial. The court disagreed, finding that Rumpf's claim did not accrue until the final denial and was therefore timely. The court explained, "In this case...the Court concludes it would be unfair and inequitable to hold Plaintiff to any disadvantage because she followed the instructions in the letter she received...denying her benefits. Consistent with the Plan, this letter specifically noted that Plaintiff could appeal, and stated that...she would...have the right to bring a civil action [if her appeal was denied]; in turn, Plaintiff justifiably filed the internal appeal on January 13, 2004, which was denied on February 16, 2005. Plaintiff, meanwhile, received no document mentioning any limitations period or any specific timetable within which she must file her lawsuit."

As is evident from Heimeshoff and other similar decisions, ERISA is full of traps for the unwary, such as time limitations and various other contractual provisions that a typical consumer would be unaware of. Do not handle your claim on your own and simply trust the insurance company to "do the right thing." Contact us at Bonny G. Rafel for a consultation to ensure that your ERISA rights are protected.

- By Sara E. Kaplan, Esq.

Disability insurance policies provide benefits if you cannot perform the duties of your occupation. How does this apply to nurses working in a specialty? The insurer may categorize nurses as a registered nurse and overlook the demands of the medical specialty. A neonatal nurse or emergency room nurse needs mobility and exemplary multitasking skills to engage in their specialized nursing field. By categorizing these nurses as general RN's the insurer erroneously disregards the special skill set required of these nurses.

In the recent case of Samper v. Providence St. Vincent Med. Ctr., 675 F.3d 1233 (9th Cir. 2012) the Ninth Circuit Court of Appeals offered some commentary on this issue. Samper, although focused on the Americans with Disabilities Act (ADA) and not specifically on long term disability insurance, dealt with a neonatal nurse who worked in the NICU of a hospital. The issue was the denial of Samper's request for additional accommodations under the ADA. The court notes that the patient population that a neonatal nurse interacts with "cries out for constant vigilance, team coordination and continuity." Id. at 1238. It is further acknowledged by the court that "NICU nurses must have specialized training, and it is very difficult to find replacements." Id.

In Peck v. Aetna Life Ins. Co., 495 F. Supp. 2d 271, 274 (D. Conn. 2007) Aetna applied a generalized RN job description to the claimant who was an operating room nurse at a hospital. Aetna chose to freely interpret "own occupation" since no definition was contained within the policy but the court stated that when "own occupation" is not defined, it "shall be a position of the same general character as the insured's previous job, requiring similar skills and training, and involving comparable duties." Considering Peck to be a generalized RN was arbitrary and capricious because her role required a different skill set and her duties included "10-hour shifts, spending nearly all of her time on her feet, and assisting everyone in a particular operating room," vastly different than the responsibilities of a general RN.

Schofield v. Metro. Life Ins. Co., 297 Fed. Appx. 697 (9th Cir. Cal. 2008), Schofield was a Certified Registered Nurse Anesthetist but in their analysis, Met Life determined that she was capable of performing "more-sedentary nursing duties." The court found this analysis flawed because the policy was an own occupation policy and the analysis was if Schofield could perform her job as a Certified Registered Nurse Anesthetist.

While an insurer may try to classify a specialized nurse as an RN that is rarely acceptable as the positions are different. While a specialized nurse certainly could perform the duties of a generalized registered nurse that is not the occupation that the specialized nurse engages in. Additionally, the skill set required of the specialized nurse while rooted in the same skills required of an RN, necessitates additional specialized skills and potential training. If covered under an own occupation definition in a policy it is patently unfair for the insurer to generally categorize a specialized nurse as an RN because while trained as an RN that is not the nurses occupation.

We at Bonny G. Rafel have experience handling a variety of issues with "own occupation" terms of disability policies. If you have been denied due to an "own occupation" issue or need help interpreting the terms of your policy contact our office so we can put that experience to use in helping you receive the benefits that you deserve.

--By Alexander C. Schaffel, Esq. and Bonny G. Rafel, Esq.

As a general rule, litigation over matters of insurance coverage should take place in the Federal or State forum in which the insurance contract is signed. However, disabled claimants are sometimes surprised to learn that their policy contains a "forum selection clause"--a provision in the policy dictating that any litigation regarding the contract must take place in a specific jurisdiction, regardless of where the contract was signed or where the claimant lives.

In the groundbreaking decision of Coleman v. Supervalu, Inc. Short Term Disability Program, 2013 U.S. Dist. LEXIS 13372 (N.D. Ill. Jan. 31, 2013), the Northern District of Illinois recently held that forum selection clauses in ERISA policies are per se invalid. Coleman resided in Illinois, yet her disability policy contained a forum selection clause requiring all litigation related to her policy to be filed in the United States District Court for the District of Minnesota. The Court found the clause unenforceable, emphasizing ERISA, 29 U.S.C. 1132 (e)(2)'s provision that litigation under the Act may be brought in the district where the alleged breach of contract occurs (meaning where the individual denied benefits resides). The Court noted that this "is not a neutral provision," since ERISA's policy declaration states that ERISA is meant to protect the interests of plan participants by providing "ready access to the Federal courts" and Congress' intent as expressed in the legislative history was "to remove jurisdictional and procedural obstacles which in the past appear to have hampered effective enforcement of fiduciary duties." Citing 29 U.S.C. § 1104(a)(1)(D), which provides that "[A] fiduciary shall discharge his duties with respect to a plan...(D) in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of [ERISA]," the Court concluded that since forum selection clauses deprive claimants of ready access to the Courts, they are unenforceable as inconsistent with the provisions and rights provided by ERISA.

The Coleman decision departs from caselaw in other jurisdictions upholding forum selection clauses in ERISA contracts. In Klotz v. Xerox Corp., 519 F. Supp. 2d 430 (S.D.N.Y. 2007), the court upheld the clause in Klotz's disability policy, stating that the clause furthered ERISA's public policy objectives by mandating litigation take place in the Western District of New York, since it "allows one federal court to oversee the administration of the LTD Plan and gain special familiarity with the LTD Plan Document, thereby furthering ERISA's goal of establishing a uniform administrative scheme." The court in Smith v. AEGON USA, LLC, 770 F. Supp. 2d 809 (W.D. Va. 2011) reached the same result, finding that mandating jurisdiction in the Northern District of Iowa where the company's headquarters were located "was [not] fixed as a way to discourage potential plaintiffs from pursuing legitimate claims." Hopefully the Federal Courts-- including the Third Circuit--will embrace the outcome in Coleman based on the court's novel and in-depth rationale.

We at Bonny G. Rafel, LLC have a successful track record of ensuring fairness for our clients who are forced to litigate. If you are concerned that your policy contains language jeopardizing your legal rights, contact us for a consultation.

- By Sara E. Kaplan, Esq.

If you are suffering from fibromyalgia or chronic fatigue syndrome (CFS) and need to go on disability, chances are that you will receive push back from your short term or long term disability insurer. Insurers often resist claims based on fibromyalgia and CFS. More often than not, insurers will require claimants to provide "objective evidence" of these conditions and evidence of the symptoms experienced. As these are conditions that cannot be proven through traditional clinical testing, it is important to take steps to protect yourself to present the strongest case possible to your insurer.

Third Circuit courts have repeatedly held that it is arbitrary and capricious for an insurer to require that a claimant provide "objective medical evidence" in the context of a claim for LTD benefits when that claim is due to fibromyalgia or CFS. Balas v. PNC Fin. Servs. Group, 2012 U.S. Dist. LEXIS 26027 (W.D. Pa. Feb. 29, 2012); See Mitchell v. Eastman Kodak Co., 113 F.3d 433, 442-443 (3d Cir. 1997); Steele v. Boeing Co., 225 Fed. Appx. 71, 74-75 (3d Cir. 2007); Kuhn v. Prudential Ins. Co. of Am., 551 F. Supp. 2d 413, 427 (E.D. Pa. 2008). It is well known that both fibromyalgia and CFS are diseases that cannot be verified through traditional objective testing and therefore requiring a claimant to do so creates an impossible hurdle that cannot be overcome. Id. Other Circuits have reached a similar consensus that it is improper for an insurer to require objective evidence to justify fibromyalgia and CFS. See Burkhead v. Life Ins. Co. of N. Am., 2012 U.S. Dist. LEXIS 52040 (D. Colo. Apr. 13, 2012); Ayers v. Life Ins. Co. of N. Am., 2012 U.S. Dist. LEXIS 55814 (D. Or. Apr. 19, 2012); Solomon v. Metro. Life Ins. Co., 628 F. Supp. 2d 519 (S.D.N.Y. 2009); Holler v. Hartford Life & Accident Ins. Co., 737 F. Supp. 2d 883, 891 (S.D. Ohio 2010); Rodriquez v. McGraw-Hill Companies, 297 F.Supp 2d 676 (S. D. NY 2004).

In Balas, the court distinguished between requiring objective proof of a condition and requiring objective proof ofa loss of functional capacity causing the claimant to be disabled. Balas, 2012 U.S. Dist. LEXIS 26027 at *25. However, as the court in Heim v. Life Ins. Co. of N. Am., 2012 U.S. Dist. LEXIS 38257 (E.D. Pa. Mar. 21, 2012) points out, there is an inherent problem "in requiring objective evidence of the symptoms or bases of diagnoses for which there are no objective tests." The Heim court found it improper when the insurer sought objective evidence that the claimant's symptoms of fatigue and pain rendered her unable to work. Id. at *28.

You should still take steps to document your condition. For fibromyalgia ask your doctor to make a clear record of your tender points, a measure of fibromyalgia that courts have found to be "objective evidence of the condition." For CFS ask your doctor to track the other conditions that they have ruled out, and the history of the symptoms that have led to confirming your diagnosis. It is also important that you keep a strong record of the symptoms you experience, and why each symptom prevents you from performing your job or any other job, and what causes an exacerbation of your symptoms.

If you are suffering from fibromyalgia or CFS and have been denied benefits due to a lack of "objective evidence" of your medical conditions or symptoms, there is a strong chance that your insurer has acted in an arbitrary and capricious manner. We at Bonny G. Rafel have extensive experience dealing with this issue and frequently help clients with fibromyalgia and CFS fight for the benefits they deserve.

--By Alexander C. Schaffel, Esq.

As disability attorneys, we often meet with individuals who have continued working after developing a disabling condition for various reasons, both financial and professional. Insurance companies will often refuse to find a claimant disabled until he or she stops working entirely. However, some individuals may have a legitimate disability claim that begins prior to leaving work, which can potentially increase the amount of benefits payable.

The Courts have recognized that an individual who works while disabled is not necessarily precluded from collecting total disability benefits. See Rabbat v. Standard Life Ins. Co., 2012 U.S. Dist. LEXIS 142336 (D. Ore. Oct. 1, 2012). The court ruled that Rabbat was disabled by these symptoms despite continuing to work for a period of time, based on his doctors' reports of the severity of his condition; his frequent need to miss work when having a flare-up; and his supervisor documenting Rabbat's observable severe symptoms and increasing difficulty performing his job during his final year at work. The court stated, "A desperate person might force himself to work despite an illness that everyone agreed was totally disabling. . . . Yet even a desperate person might not be able to maintain the necessary level of effort indefinitely. The claimant may have forced himself to continue in his job for years despite severe pain and fatigue and finally have found it too much and given it up even though his condition had not worsened. A disabled person should not be punished for heroic efforts to work by being held to have forfeited his entitlement to disability benefits should he stop working." Similarly, in Bray v. Sun Life & Health Ins. Co., 838 F. Supp. 2d. 1183 (D. Co1. 2012), the court found that Bray was disabled prior to leaving work due to a then undiagnosed brain tumor, as it was clear from his performance that his symptoms prior to diagnosis severely impeded his work performance such that it could not be said he was truly capable of performing his job.

Caselaw aside, some disability income policies contain a partial disability provision for a continued percentage of benefits while the insured is disabled but working in a limited capacity. While this typically applies to residual rather than total disability, it is an alternative avenue to explore for individuals who are ill but continue to work in a certain capacity due to their particular circumstances.

While the notion of working while disabled has been useful in cases involving individual disability income policies, it is far less useful to insureds covered by group policies since poor performance or excessive absences due to a disabling condition can lead to termination and loss of coverage.

If you have been denied disability benefits based on your professional persistence in the face of illness or are concerned for your future and struggling to decide on a disability plan, contact us at Bonny G. Rafel for an expert consultation. We may be able to help.

- By Sara E. Kaplan, Esq.

As the Wall Street Journal recently discussed, residual benefits might be a useful option in the case of a professional who becomes ill and, after a period of recovery returns to work on a reduced schedule and therefore loses incomes. If the policy was issued in the 80's or 90's, it may even compensate for a loss in income until the insured reaches ages 65.

However, the Wall Street Journal article fails to address the potential pitfalls of purchasing a disability income policy with a residual benefit provision. A strict total disability policy will pay the insured a flat monthly benefit upon disability, regardless of whether he or she suffers a loss of income due to disability. Such a policy will generally pay benefits so long as the insured is restricted from performing one or more material duties of his or her occupation. However, residual disability provisions--while seemingly offered to benefit the insured in the event of partial disability--generally provide that an insured will qualify as residually disabled if he or she can perform some of the duties of his her occupation, but not all. As residual benefits compensate the insured only for income lost due to disability and not the full monthly benefit available under the total disability provision, an insured may be left with a lower benefit amount as a result of paying extra premium dollars for residual coverage.

We have frequently challenged insurance companies classifying our client's claims as residual. The dispute often centers on the terms of the particular policy. In Klay v. AXA Equitable Life Ins. Co., 2010 U.S. Dist. LEXIS 10288 (W.D. Pa. Sept. 28, 2010), Klay was a cardiothoracic surgeon who ceased performing cardiac surgeries due to his disability. The policy in question defined residual disability as an inability to "do one or more of the main duties of your occupation," and total disability as an inability to "do the main duties of your occupation." The Court found that since Klay continued working in a reduced capacity as a vascular surgeon, his claim could only be classified as residual. By contrast, the policy in Bybel v. Metropolitan Life Ins. Co., 2010 U.S. Dist. LEXIS 122367 (E.D. Pa. Nov. 18, 2010) contained language very similar to that in Klay, yet the court determined that Bybel could be entitled to total disability benefits. Bybel was an OB/GYN who was forced to cease her obstetrical practice when she became disabled, and the Court reasoned that since she was terminated from her position as an OB/GYN and unable to deliver babies on her own, a refusal to find her totally disabled "would contradict the intent of the parties and the purpose of a disability insurance policy."

Insurance companies must act in good faith to differentiate between a true residual claim and one in which the claimant continues working but is nonetheless totally disabled under the terms of the policy and therefore entitled to the full monthly benefit amount.

If you are a professional whose occupational duties or schedule have changed as a result of illness or injury, we at Bonny G. Rafel are available for expert consultation on how to maximize your benefits under your disability income policy.

- By Sara E. Kaplan, Esq.

Often employees are offered individual disability policies at a discounted rate if purchased with other employees. The employee may deal directly with a broker or the insurance company to purchase the policy, with the only employer connection a payroll deduction for premiums. The employees expect they have purchased an individual disability policy that is not part of an employer benefit plan. Only when their claim is denied or they are forced into litigation against the insurer due to a denial of benefits does the employee learn that the litigation may be governed under ERISA and not state law.

The recent case of McCann v. Unum Provident, 2013 U.S. Dist. LEXIS 13132 (D.N.J. Jan. 31, 2013), illustrates this situation, and how courts in the Third Circuit apply the safe harbor provision of ERISA. In McCann, a medical fellow purchased a policy that was offered to him at a discount through his employment. McCann paid the premiums directly. The policy took effect when his fellowship had ended. Benefits were denied and Unum argued that ERISA applied. The court ultimately agreed with Unum and held that the policy in question fell under ERISA and the "safe harbor provision" did not apply.

The safe harbor provision of ERISA removes a disability insurance plan from ERISA coverage if:

(1) No contributions are made by an employer or employee organization; (2) Participation the program is completely voluntary for employees or members; (3) The sole functions of the employer or employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs and to remit them to the insurer; and (4) The employer or employee organization receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with payroll deductions or dues checkoffs.

See 29 C.F.R. § 2510.3-1(j).

In the Third Circuit, an action by the employer other than permitting an insurer to publicize a plan or collecting premiums through payroll deductions, displays "such a degree of control over a plan that an objectively reasonable employee would consider it part and parcel of the company's own benefits package." See McCann, at *33. This additional action signifies endorsement by the employer which defeats the safe harbor provision of ERISA. The actions of the employer could be simple, such as in McCann, where the hospital indicated that it would provide disability insurance as part of its standard benefits package, and the broker's marketing material indicated that the hospital selected the insurer to provide disability insurance benefits.

Third Circuit courts have also held that when an employee receives a group discount in purchasing a disability insurance policy, that discount is considered an employer contribution because the employee could not have received that benefit if not for the employer, and that contribution also assists in defeating the safe harbor provision. See McCann, at *29. This view however is not shared by all of the Circuits as courts in the Eleventh Circuit have determined that a discount on premiums offered only due to employment with the specific employer did not constitute a contribution. See Letner v. Unum Life Ins. Co., 203 F. Supp. 2d 1291, 1301 (N.D. Fla. 2001) (Discount provided to employee due to his payment of premiums being deducted from his paycheck did not constitute a contribution by the employer.).

Contrary to McCann, another scenario arises when an employer purchases and "list bills" an individual policy for its key employees, paying all of the premiums. When one of those employees leaves his company and begins paying premiums for his policy ERISA no longer applies. In a recent decision, the court in Weinrauch v. N.Y. Life Ins. Co., 2013 U.S. Dist. LEXIS 8105 (S.D. N.Y. Jan. 15, 2013) determined that ERISA does not apply to a policy when an employee insured under an individual policy leaves his company and assumes the payment of premiums. The policy is no longer under ERISA control because the employer as in the other cases cited above, "has no role in the administration or maintenance" of the employee's current policies. Id. at *22. Individual policies commonly permit the policy holder to make changes related to the premium payments, riders on the policy, and the amount of benefits. The Weinrauch court analyzed the policy and determined since it allowed changes to be made which Mr. Weinrauch took advantage of, it is an individual policy and is not subject to ERISA. Id. at *20.

While each situation is different and the application of the safe harbor provision is on a case by case basis, it is important to remain cognizant that your individual disability policy could be governed by ERISA and not state law. We at Bonny G. Rafel can help you evaluate your policy to determine if it would be considered an ERISA plan or not. We have extensive experience dealing with the safe harbor provision of ERISA and can advise you of your rights even if you have not been denied benefits or even applied for benefits yet.

--By Alexander C. Schaffel, Esq.

In December 2012, we posted a blog regarding laws protecting Long Term Care Insurance consumers. Long Term Care is becoming an increasingly important area of focus as our population ages. However, the data inescapably indicates that LTCI is far more of a women's issue than a men's issue.

The New York Times recently published an article highlighting the special issues that women face as LTCI consumers. From a financial perspective, the Long Term Care Insurance market has been shrinking--with many carriers ceasing to sell policies altogether and others raising premiums by significant amounts--as the aging American population has increasingly come to call on benefits and insurers realize the true cost of the policies to their bottom lines. This issue is magnified in the case of women, who statistically live longer than men and consequently cost insurers the majority of money in LTCI benefits. Genworth Financial, the top LTCI carrier in the country, has announced that it will be raising premiums by up to 40% for single women applying for coverage. This "gender-distinct" pricing is legal in 48 states, including New Jersey. Statistics cited in favor of such pricing increases center around the fact that women have, on average, longer life spans than men. They are therefore more likely to be widowed and living alone by the time they are elderly, or to reside in nursing homes whose costs are covered by LTCI. These difficulties are in addition to increasing stringencies in the underwriting process, including home visits rather than telephone interviews, reduced inflation protection, and longer elimination (waiting) periods. More cynical speculators opine that the true reason is lower interest rates set by the Federal Reserve, which reduces insurers' returns on invested premiums.

Despite the intensified shift toward gender-distinct pricing and stricter underwriting, insurers in New Jersey are bound by the terms of the New Jersey Long Term Care Insurance Act, which regulates the underwriting and pricing schedules of LTCI policies.

We at Bonny G. Rafel are experienced in advocating for the rights of LTCI policyholders. Contact us for a consultation if you or a loved one is experiencing difficulties in dealing with an LTCI carrier.

- Sara E. Kaplan, Esq.

The issue of whether a claimant with a relapsing and remitting condition is entitled to benefits arises fairly frequently in the disability context. Insurance companies often justify a denial of benefits on the fact that a claimant is in remission, or on the fact that a claimant's variable symptoms have abated for a period of time.

In Colby v. Union Security Insurance Company & Management Company for Merrimack Anesthesia Associates Long Term Disability Plan, the First Circuit affirmed the District Court's ruling that Colby, who suffered from opioid dependence, was entitled to LTD benefits due to her risk of relapse. Colby was an anesthesiologist whose practice allowed her ready access to opioids. Both her own doctors and several of the insurance company's physicians had concluded that she was at a severe risk of relapse and that her returning to work would exacerbate this risk due to her occupation as an anesthesiologist and her comorbid back pain and mental health conditions. These opinions were supported by Colby's continued struggle with addiction after leaving a treatment facility. The court concluded that, since the disability policy in question did not contain an exclusion for risk of relapse and that such a risk was a presently disabling condition, the District Court acted properly in awarding her benefits.

The risk of relapse is an issue in cases based on physical illnesses as well, particularly in cardiac cases where the stress of one's occupation threatens to precipitate another cardiac event. See Dimsdale, "Psychological Stress and Cardiovascular Disease." The Third Circuit addressed this issue in Lasser v. Reliance Standard Life Ins. Co., where Lasser, an orthopedic surgeon, had a diagnosis of coronary artery disease and had suffered a heart attack. Lasser argued that the stress of his occupation, including on-call and emergency duties would put him at risk for another heart attack. The Court agreed, finding that Lasser's risk of relapse was a present disability under his policy based on his treating doctors' opinions on the gravity of the risk.

We at Bonny G. Rafel have an in-depth understanding of cardiac and risk-of-relapse cases. We can assist you in working to protect your claim by ensuring that your insurer has a full understanding of your medical history and the science behind your case.

- By Sara E. Kaplan, Esq.

Fibromyalgia remains an enigmatic condition, as its symptoms are entirely self-reported and there is no objective testing that can confirm the presence of the disease. See MD Guidelines. This often makes it extremely difficult for claimants with fibromyalgia to get their disability carriers to pay their claims.

Fortunately, the Social Security Administration came out with a ruling this summer that provides guidance in determining whether a claimant is functionally impaired due to fibromyalgia. See SSA Ruling of July 25, 2012. Instead of the objective testing--such as x-rays and lab reports--which can substantiate other diagnoses, the SSA will here focus on the quality of the evidence documented by a claimant's treating physicians. The SSA has provided that proofs may come in the form of medical records, so long as the physician conducts a physical exam and documents symptoms of fibromyalgia as prescribed by the American College of Rheumatology including pain, tender points, and the absence of any other objectively diagnosable disorder. The SSA will then look to see whether the pattern of the symptoms the physicians document is consistent with a diagnosis of fibromyalgia.

The SSA's emphasis on the importance of treating physician's opinions and documentation in fibromyalgia disability cases buttresses the holdings of many federal courts in ERISA cases who have maintained that an insistence on objective symptoms and the rejection of consistently documented subjective symptoms is an inappropriate basis on which to deny a fibromyalgia claim. See Brown v. Continental Casualty Co., 348 F. Supp. 2d 358, 369-70(E.D. Pa. 2004) (even if an ERISA administrator may sometimes impose a requirement for "objective" medical evidence that does not appear explicitly in a plan's terms, it would be unreasonable to do so here . . . Such a requirement would effectively preclude any fibromyalgia patient from qualifying as totally disabled on the basis of the disease . . . Such a requirement would merit reversal here even if CNA's administrative decisions were entitled to deference); Duperry v. Life Ins. Co. of North America, 2009 U.S. Dist. LEXIS 83532, *40-1 (E.D.N.C. Aug. 10 2009), aff'd at 632 F. 3d 860 (4th Cir. 2011) (finding the administrator's denial arbitrary and capricious where it relied on the report of a physician who "recognize[d] plaintiff's diagnoses of rheumatoid arthritis and fibromyalgia...[but went] on in each report to summarily state that pain associated with plaintiff's fibromyalgia is not disabling").

We at Bonny G. Rafel frequently handle cases involving fibromyalgia, rheumatoid arthritis, and other conditions characterized largely by self-reported symptoms. We understand the difficulties in substantiating these disorders to the insurance companies, and will work with you to ensure the best possible chance for success with your disability.

- By Sara E. Kaplan, Esq.

On November 27, 2012, the Supreme Court of the United States heard oral argument in the matter of U.S. Airways, Inc. v. McCutchen. The question is simple -- can an insurer require an ERISA beneficiary to reimburse it for health coverage payments made if the individual recovers money from the responsible party? In the usual circumstance, the individual is "made whole" by a recovery from the tortfeasor for his injuries and has enough to pay back the health insurer for the medical payments. But that does not always occur. If the injured person does not fully recover for his damages, must he still turn over money to the insurer who is contractually liable to pay for other benefits, such as medical coverage or disability benefits?

McCutchen was catastrophically injured in a car accident, but paid only a small sum from the case since the tortfeasor carried meager insurance. Despite the small settlement which did not fully compensate him for his damages, U.S. Airways claimed reimbursement out of the settlement proceeds for the full amount that it had paid on McCutchen's behalf. It relied on the plan's subrogation reimbursement provision which required reimbursement for any amounts recovered from a third-party tortfeasor. U.S. Airways also refused to pay its share of attorney fees associated with obtaining the resolution of the underlying case. See the Third Circuit's Opinion at 663 F. 3d 671 (3d. Cir. 2011).

The Third Circuit overturned the District Court's ruling based on equitable principles. Even though the plan gave U.S.Airways the contractual right to collect every dollar it had spent regardless of whether McCutchen or his attorney received a dime, the Court held that "appropriate equitable relief" under Section 502(a)(3) necessarily meant that any equitable remedy of reimbursement available to the insurer "must, absent other indication, be deemed to contain the limitations upon its availability that equity typically imposes." The Third Circuit found that it would be unjust to require McCutchen to reimburse the full cost of his medical bills because it would leave him without full compensation for his medical expenses and would provide a windfall to the Plan.

On certiorari, McCutchen argues that by allowing insurers only "appropriate equitable relief" under Section, 502(a)(3), ERISA is intended to prohibit enforcement of plan terms that offend principles of fairness and equity. State law historically limits reimbursement rights. See Perreira v. Rediger, 169 N.J. 399 (N.J. 2001). In Perreira, amicus briefs were filed with the New Jersey Supreme Court by Health Plans arguing that the Court is not free to substitute its own views of what is fair for the words of the plan and further, that the plans incorporated reasonable expectations of reimbursement claims into its pricing of plan rates and premiums.

We at Bonny G. Rafel are experienced in protecting our client's disability benefits from third-party lienholders. If you are concerned about the effect of a third party settlement or award on your benefit amount, we are able to provide consultation to help protect your rights.

-By Sara E. Kaplan, Esq. and Bonny G. Rafel, Esq.

According to the National Institute on Aging and Alzheimer's, early identification of Alzheimer's may lead to earlier medical treatment. This is due in part to two things: 1) medical advances allowing a better understanding of cognitive decline due to age versus Alzheimer's and 2) new criteria from expert panels of the National Institute on Aging and Alzheimer's, for clinical diagnosis of mild cognitive impairment due to Alzheimer's. The new criteria helps identify people who are in the symptomatic predementia phase of Alzheimer's, known as mild cognitive impairment. The new diagnostic guidelines replaces previous techniques for identifying early stages of Alzheimer's, and provide medical professionals with a new tool to assess their patient's cognitive impairments. This evolved criteria for diagnosing mild cognitive impairment is crucial as early stages of the disease can only be determined by a clinician. The criteria used will allow a medical provider to differentiate between cognitive issues from age, other causes, and that of Alzheimer's.

The Alzheimer's Association predicts that by the year 2050, the presence of Alzheimer's will triple, affecting more than 13.6 million people in the U.S. The rise is estimated to create medical costs up to $1.1 trillion by that time. With early detection techniques, health care providers can implement critical treatment to provide important options to those in need.

We at Bonny G. Rafel have worked with many people suffering from Alzheimer's to help them receive disability benefits that they are entitled to. If you have been diagnosed with Alzheimer's and are unable to continue working, we can help you apply for the disability benefits you deserve.

--By Alexander C. Schaffel, Esq.

The American Psychiatric Association has recently approved the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSMV. The New York Times reports that after an extensive debate, the Association compiled a manual that provides new criteria for addressing some of the most common and controversial mental disorders. In certain instances, new definitions may alter, limit, or enhance insurance coverage for mental disorders previously considered behavioral or biological.

Notably, the authors of the DMSV have devised a more inclusive definition of depression. The Fourth edition of the DSM contained a "bereavement exclusion," which held that grieving a person's passing did not qualify as a mental disorder. The DSMV eliminates that exclusion; thus, individuals who exhibit the symptoms of depression due to the grieving process will qualify for the diagnosis. This is controversial because it places a potentially stigmatic label on the bereaved. From a disability perspective, however, those rendered unable to work following the traumatic experience of loss will now have a diagnostic basis for claiming benefits.

The committee working on Autism also re-structured the way the disorder is characterized, which is a development we discussed in February 2012. While Autism and related syndromes have previously been broken down into categories including Asperger's and pervasive developmental disorder not otherwise specified, all of the categories will now come under the unified heading of "autism spectrum disorder." However, criteria for this new category are predicted to exclude some of those who previously would have qualified for a diagnosis. This raises concerns regarding disability resource availability--including private insurance and social security benefits--for those who no longer fall under the definition of autism.

Another controversial decision was to create a new category for "disruptive mood dysregulation disorder," or D.M.D.D., which will now include many children who had been previously diagnosed as bipolar. D.M.D.D. will be used to diagnose children who display "extreme hostility and outbursts beyond normal tantrums." The committee working on D.M.D.D. created this new category to avoid placing the lifetime label of "bipolar" on children where researchers have found that most children diagnosed as bipolar are not truly suffering from the disorder. It remains to be seen how the creation of this new diagnosis and the removal of the bipolar label will affect pediatric patients' rights to insurance benefits, including disability and social security benefits later in life if symptoms do not improve.

The affect of any paradigm shifts within the DSMV on patients' ability to obtain resources necessary to deal with their disorders had yet to be determined. We at Bonny G. Rafel can provide consultation if you are concerned with how changes in the DSM's diagnostic criteria may impact your entitlement to disability benefits.

- By Sara E. Kaplan, Esq.

With the American population aging and the future of the already-limited Medicare and Medicaid programs uncertain, private Long Term Care Insurance may be the best remedy for ensuring that elderly and chronically ill citizens receive suitable care to fit their medical and quality-of-life needs. However, the cost of LTCI remains out of reach for many middle-income families, and policyholders remain subject to unfavorable terms in their policies.

The Massachusetts State Legislature recently passed a Bill entitled "An Act Establishing Standards for Long-Term Care Insurance" in order to better protect LTCI consumers. Massachusetts has pioneered a Long-Term Care exemption, which allows Medicaid recipients with private Long Term Care Insurance policies to insulate their homes from Medicaid liens, and the new act enhances consumer protection under that law. Another protection that the Massachusetts law provides is the adoption of the National Association of Insurance Commissioners' Long-Term Care Insurance Model Act, which provides various protections including prohibitions on deceptive sales practices and the cancellation of policies due to age or medical deterioration, disclosure requirements, and limitations on pre-existing condition exclusions. 46 other states, including New Jersey, have already passed legislation adopting all or part of the Model Act. New Jersey has incorporated the Act in its own Act on Long Term Care Insurance, N.J.S.A. § 17B:27E-1, et. seq., which regulates issues such as sales of policies, rescission, and grounds for denial.

Unlike Massachusetts, New Jersey has not passed a law exempting individuals with long term care policies from Medicaid Liens. New Jersey citizens applying for Medicaid cannot own more than $2,000 worth of assets in order to qualify for benefits. Passage of a law such as the Massachusetts Act would serve the simultaneous and worthwhile goals of preserving state resources with regard to long term care and providing incentives for seniors to remain in their homes to obtain care for as long as possible.

We at Bonny G. Rafel have experience handling Long Term Care Insurance claims, and are able to provide consultations and representation to LTCI policyholders seeking the best possible care to preserve their quality of life.

- By Sara E. Kaplan, Esq.