New Jersey Disability Lawyer Blog

A Congressional investigation released last month found that the four largest U.S. for-profit health insurers denied policies to one in every seven applicants based on prior medical history. The Wall Street Journal reported the companies - Aetna, Inc., Humana, Inc., UnitedHealth Group, Inc., and WellPoint, Inc. - denied coverage to more than 651,000 people over the three-year period from 2007 to 2009 based on pre-existing medical conditions. The numbers indicated a 49% rise in the number of people who were denied coverage based on a pre-existing condition over the last two years.

Bloomberg reported that while most Americans have health coverage through their employer or Medicare, there is an estimated 15.7 million adults under age 65 who receive coverage through an individual health insurance policy. These are the customers directly affected by pre-existing condition coverage denials. During the same three-year period of 2007 to 2009, the four carriers combined to deny 212,800 medical claims based on the companies' claims that these claims resulted from a pre-existing condition.

While this number is alarming, it is important to note that under the newly passed health-care legislation, insurers will no longer be able to deny coverage because of a pre-existing health condition beginning in 2014.
Contributed by Charles Kellett, Esq. associate with Bonny G. Rafel

When a disabled employee is denied benefits by an insurance company, Federal Regulations, ERISA law requires that they submit a "mandatory" appeal of that denial to the insurance company. The insurance company will typically review the appeal and decide whether to reverse or uphold their decision. Only after the appeal is denied does the claimant have the right to initiate litigation in federal court.

Sometimes a second level "voluntary" appeal is offered to the claimant. When deciding whether to file a second voluntary appeal, claimants must weigh the benefits of this process. If the denial lacks evidential support, it may be worthwhile to skip the voluntary appeal, especially if the same reviewer who already denied your case would get another chance to fortify his denial.

ERISA requires an insurer who offers voluntary appeals to provide "sufficient information relating to the voluntary level of appeal to enable the claimant to make an informed judgment about whether to submit a benefit dispute to the voluntary level of appeal." 29 C.F.R 2560.503-1(c)(3)(iv). This information should "includ[e] a statement that the decision of a claimant as to whether or not to submit a benefit dispute to the voluntary level of appeal will have no effect on the claimant's rights to any other benefits under the plan and information about the applicable rules, the claimant's right to representation, the process for selecting the decisionmaker, and the circumstances, if any, that may affect the impartiality of the decisionmaker, such as any financial or personal interests in the result or any past or present relationship with any party to review process." Id.

Recently, the Court in DaCosta v. Prudential Ins. Co. of Am., 2010 U.S. Dist. LEXIS 120511 (E.D.N.Y 2010) found that the Defendant's failed to provide "sufficient information" concerning the voluntary appeals process where the Defendant's did not tell the Plaintiff that, in processing voluntary appeals, Defendant: "(1) typically selected the same decisionmaker who handle the original appeal (even though presumably, that decisionmaker might not be fully impartial); (2) typically assigned the same physicians who handled the original appeal; and (3) applied no 'hard and fast' 'applicable rules,' except that the review was not de novo." Id.

The law offices of Bonny G. Rafel can help you with these difficult decisions.