COVID-19 Update: Impact on Long Term Disability/ERISA Claims

Articles Posted in New and Newsworthy

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We are often asked by our disabled clients if they must stop all cease or limit their daily activities in order to prove they are unable to work in their occupation.  The answer is no.  Insurers do poke around, asking claimants on “Activities of Daily Living” forms questions such as how far they can travel, what computer devises they operate, whether they tend to their yard, or clean their home or exercise at a gym.  Detailed prodding often seeks information about how the claimant spends their day from the moment they awaken to when they go to sleep at night.

We have handled appeals for clients who suffer from chronic pain but are able to mow their lawn, or clean their own home, or care for children.  Hartford, Cigna, Unum and Prudential often deny claims of individuals whose lives outside of work appear to be too busy or too “normal” to justify a disability claim.  However when rushing to deny a claim, the insurer does not ask how often the person is able to perform these activities, or under what conditions.  We have successfully appealed cases where the insurers have challenged our client’s claim because they admit to using a computer or smart phone. The insurer simply concludes that the person surely can perform the duties and demands of their sedentary job which requires sitting at a computer during the normal work day.    We have established the key difference between using a mobile device and computer periodically to check emails, or the news,  and functioning in an executive capacity, performing cognitive demanding, time sensitive work duties on a daily basis.   We advise our clients to be careful when completing insurer forms and to place their acitvities into the proper context.

A recent case by a Software engineer, disabled by cognitive and depression symptoms outlines the courts analysis on this issue.  In Chapin v. Prudential Ins. Co. of Am., Prudential alleged that Mr. Chapin was not disabled due in part to his doctor’s noting that he continued to exercise, ski and hike. The court noted “Being able to ski, hike and work out in no way transfers into or supports performance as a software engineer.”  Evidence supported that he was disabled from his cognitively demanding occupation despite his continued attempts to remain physically active.

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Recently our firm has seen a significant upsurge in disability insurance companies including Hartford, Cigna, Aetna and Unum suddenly denying long term disability claims that have been paid for many years.  It is the burden of the disabled claimant to remain under medical care for their disabling condition and to periodically provide updates to the insurance company.  But often, after years of being on claim, and reaching the point of medical care that is palliative, many people reduce their doctor visits and learn to live with their condition with minor medical care.  A recent legal case reminds us that being on claim for a long time does not automatically mean your claim will not be challenged.  In  Skinder v. Fed. Express Long Term Disability Plan      Aetna found Ms. Skinder, a FedEx account executive totally disabled from working in any occupation in 2004 due to a back condition and paid her ever since. Suddenly, Aetna’s medical consultant performed a paper file review and decided that Mr. Skinder was no longer unable to work! The court examined the evidence and determined that the paper reviewer failed to thoroughly review all of the evidence and cherry-picked favorable medical records to support his biased view. Aetna was admonished for failing to advise Skinder of exactly what medical evidence they needed to continue to approve the claim after so many years.  The court reasoned, “a denial without new medical information to justify that decision should be treated with significant skepticism.” Aetna’s failure to “get to the truth of the matter undermines its claim that it used a deliberate, principled reasoning process.”

The lesson of this case is, to stay on top of your medical proofs, be sure that you keep up with periodic medical evaluations and provide your doctor with all of your symptoms and continuing medical problems so their records are complete.  Do not assume that since you have been on claim for a long time, the insurer will just put your file away and not question your disability in the future.

We at Bonny G. Rafel LLC monitor our clients’ cases to be sure that their medical proofs remain supportive of their disability. We are prepared to update the disability insurers periodically to advocate for our clients, as the Voice of The Disabled.

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The Department of Labor Employee Benefit Security Administration just established by Federal Regulation an extension of certain timeframes under ERISA for group health plans, disability and other welfare plans during the COVID-19 National Emergency.  On March 13, 2020, the government declared a National Emergency Concerning COVID-19 in effect as of March 1, 2020.  As a result of the National Emergency, participants and beneficiaries covered by these plans “may encounter problems in.. filing or perfecting their benefit claims.. and the EBSA has taken steps to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established time frames.

Subject to the statutory duration limitation in ERISA section 518 and Code section 7508A, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notice (the “Outbreak Period”)8 for all plan participants, beneficiaries, qualified beneficiaries, or claimants wherever located in determining the following periods and dates—

(6) The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure pursuant to 29 CFR 2560.503-1(h),

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Many individuals with chronic permanent medical conditions reach a level of treatment that is palliative, that will not improve their symptoms or effect their prognosis. Continuing to visit a medical provider to monitor your condition  that does not provide any medical benefit may seem pointless, and can use up valuable time and money resources. The disabled may reduce the frequency of medical visits, especially when the provider advises that no treatment is necessary.  Nonetheless, claimants on long-term disability must fulfill the burden of proof showing that they remain disabled over time. Such a requirement includes furnishing continuing proof of disability, such as medical notes or disability forms signed by a current treating medical provider.

The incompatibility of these two situations clash when the insurer to your disability claim requires “appropriate treatment” for the disabling condition in order to continue the claim.  The recent court decision in Griffin v. Hartford Life & Accident Ins. Co., 898 F.3d 371 (4th Cir. 2018) makes clear that continuing medical visits are necessary. Griffin stopped working due to pain from a herniated disc and saw his medical provider from September 2011 to June 2013. Since there was o feasible medical treatment to improve his condition, he stopped active treatment. Griffin explained to Hartford that he was unable to afford continuing visits to his medical provider, yet Hartford still required that a physician remark on functionality in order to continue paying Griffen long-term disability benefits. Since no treating physician could speak confidently on Griffin’s current disability the court upheld Hartford’s denial of Griffin’s long-term disability claim despite his contention that he remained disabled.

I advise all clients experiencing a chronic medical condition to remain under the care of a physician with at least quarterly visits, even if the physician maintains that the condition remains unchanged. Clients should have disability claim forms completed by their treating provider and keep up to date with any necessary claim materials, so that disability is continuously supported. While it may seem unnecessary to spend resources on visiting a provider when no tangible benefit comes from doing so, previous cases such as Griffin v. Hartford Life show that courts are likely to view, as insurance companies do, a lack of continuing medical history as congruent with improvement in one’s condition or absence of disability altogether.

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An action taken by the U.S. Department of Labor to protect the disabled fortunately passed on December 19, 2016, on the eve of the Obama’s departure and will go into effect January 1, 2018.  Claimants counsel breathed a sigh of relief when the amendments to the Employee Retirement Income Security Act of 1974 (ERISA) remained intact despite the new administration’s clawing back on many consumer rights.

We will issue several blogs on the important changes to the regulations to demonstrate how significant the changes are to repair fundamental flaws in ERISA.  The Department of Labor explained that the regulations were enacted

“to promote fairness and accuracy in the claims review process and protect participants and beneficiaries in ERISA-covered disability plans by ensuring they receive benefits that otherwise might be denied by plan administrators in the absence of the fuller protections provided by this final regulation.”

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Multiple sclerosis is a serious and unpredictable medical condition which effects the central nervous system (brain and spinal cord). Most people are diagnosed between the ages of 20 and 50. Worldwide, more than 2.3 million people are affected by MS and every week approximately 200 people are diagnosed. Over 400,000 Americans live with MS. The National Multiple Sclerosis Society recognizes that “Symptoms range from numbness and tingling to blindness and paralysis. The progress, severity, and specific symptoms of MS in any one person cannot yet be predicted, but advances in research and treatment are moving us closer to a world free of MS.” While the root causes of MS are still being researched and debated, it is believed that some form of virus or environmental trigger causes the body’s immune system to target benevolent cells in the myelin sheath.  The myelin sheath is a protective fatty tissue around the nerve fibers that serves as a form of insulation to protect the electrical impulses traveling the nerves of the CNS. The Institute for Neurodegenerative Disorders explains how with MS, the myelin is destroyed, and “forms scar tissue (sclerosis), which gives the disease its name”, appearing in the CNS and bringing with it an abundance of symptoms.

There is no known cure for MS. The National Multiple Sclerosis Society recommends that people with MS begin treatment with Avonex, Betaseron, Copaxone, or Rebif as these “drugs help to lessen the frequency and severity of MS attacks, reduce the accumulation of lesions in the brain, and slow progression of disability.” Many therapies are also available to treat MS symptoms.

Many individuals can continue to work for a long time before the symptoms associated with this disease, often fatigue, cognitive deficits, pain, spasticity, bladder problems, and muscle weakness impair their ability to continue working. People with MS may request work accommodations, such as: moving a workstation closer to the bathroom, allowing for longer breaks, allowing to work from home, allowing a flexible work schedule, parking closer to the work-site, adjusting desk height if a wheelchair or scooter is used. Once symptoms progress, many people with MS are unable to continue working and file for disability benefits.

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Debra Rose worked for a company which provided health benefits to its employees. Due to severe illness, she needed a liver transplant. The company handling the health claim required Debra to sign an authorization; with that authorization, the claim management continuously notified Debra’s employer of her health status without her express permission. Once Debra’s employer learned of her dire medical condition and the increased expense they would incur to continue coverage of her health benefits, she was fired. Debra brought a claim against the claim management company for invasion of privacy and unfair business practices. The case is pending in the district court in California. Rose v. HealthComp, Inc., 2015 U.S. Dist. LEXIS 104706 (E.D. Cal. Aug. 10, 2015).

Debra’s claim was brought under state law but the claim administrator tried to dismiss it as preempted by ERISA. Debra alleged that the claim management company received private health information while performing case management duties under the health plan and improperly disclosed them to her employer. She alleges that by providing personal health information to her employer the claim administrator did not act solely in the interest of the employees and the beneficiaries but rather in the “competing interest of the employer, to provide the employer with notice that the employee would likely be incurring high medical costs”. The court agreed that Debra’s privacy and unfair business practice cause of action could be brought as a breach of fiduciary duty under ERISA but decided that California’s Constitution providing a right of privacy was violated and this violation is not preempted by ERISA because it arises independent of ERISA or the plan.
This case is reminiscent of another right of privacy case for a disabled employee, brought in California, Dishman v. Unum Life Insurance Company of America, 269 F. 3d 974 (9th Cir. 2011). In that case, while on claim, Dishman’s privacy was invaded by an investigative firm who conducted surveillance, elicited private information about Dishman’s employment status by falsely claiming to be a Bank Loan Officer, solicited information from neighbors and friends, obtained credit information by impersonating him and committed other false acts. The 9th Circuit Court of Appeals in Dishman decided that this conduct was an independent tort committed by this company and thus Dishman could continue her lawsuit against them in state court. The court’s turning point was use of the “but for” test, which means that if the cause of action would remain independent of a claim for benefits under ERISA then the state law cause of action was proper. In this case, the state law cause of action for disclosure of plaintiff’s medical information would exist regardless of the case management undertaken in administering the health plan.

The takeaway from these cases is that ERISA does not provide a cloak of protection against a third party’s tortious actions. If the surveillance company, investigator, or even third party claim administrator violates your rights, an action separate from the ERISA claim may be viable. We at Bonny G. Rafel, LLC as the Voice of the Disabled, often uncover actions by third parties performing investigations of our disabled clients that shocks us. It is wonderful that the courts are recognizing this private cause of action is not preempted (or prevented) by ERISA. While we keep a close watch on authorizations signed by our clients, and cross out items such as “bank statements”, “driving records”, which is completely irrelevant to a disability claim and invasive! We inform our clients to keep social networking to a minimum as investigators can be relentless in their pursuit of some evidence to malign the credibility of our clients.

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Disability insurance is intended to provide financial protection for the individual who becomes unable to work due to a disability. There are two kinds of disability insurance coverage; one through individually purchased insurance policies and the other through employment at a company, or through an association or specific affiliation. Group policies are regulated through the Employee Retirement Income Security Act of 1974 (ERISA). ERISA was enacted to protect participants of an employee benefit plan but in practice, it often enables insurers to avoid their responsibility to pay valid claims. This is the focus of our practice at Bonny G. Rafel, LLC.

A group disability claim must be filed with the Plan and if denied, the claimant must first appeal the decision back to the insurer or claim administrator! Once this “administrative appeal” is exhausted, then and only then can the claimant have his/her day in court. A problem has arisen over when is the deadline for filing a lawsuit in these cases?

Most insurance contracts or plan documents contain a deadline for filing a lawsuit, known as a statute of limitations. Once this deadline has passed, a claimant cannot file the lawsuit. While most plans contain a three-year deadline for filing a lawsuit, we have come across several instances where the deadline is much shorter, in one case only providing the claimant six months after the decision to file a suit! This is a pothole into which many claimants unwillingly fall. They fail to recognize the deadline and thus do not hire legal counsel in time to protect their rights in federal court! To add further roadblocks to justice, the insurers rarely would notify the claimant, in the final denial letter of the deadline. Refer to our previous blogs which address when the clock starts to run for this strict deadline.

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Disabled attorneys have a specific challenge to overcome when filing for disability benefits. Due to the generally sedentary setting of the occupation, physical illness must impact one’s ability to work in an office at a computer and present cases in court. Often the insurers simply focus on whether an attorney can physically “sit” rather than whether they can continue to represent clients and perform the necessary duties inherent in the practice of law. See for example, Hertan v. Unum Life Ins. Co. of Am., 2015 U.S. Dist. LEXIS 75261 (C.D. Cal. June 9, 2015) where the Court found that “[r]ather than address the cognitive demands of Hertan’s occupation as an attorney, Unum consistently focused almost entirely on the physical requirements of what they concluded was a sedentary occupation. Hertan suffered from chronic pain and had to take narcotic pain medication. The court recognized that “[e]ven minimal loss of cognitive abilities could.. prevent her form working as an attorney will under the influence.” Both her pain and the use of pain medication impaired her cognitive skills.

Cognitive disabilities resulting from mental health issues, cardiac illness, Multiple Sclerosis, Parkinson’s disease, chronic pain, present unique challenges to overcome to obtain disability benefits. Cognitive decline for an individual may include difficulty concentrating, inability to process, retain or integrate information, impairments in memory, reduction of attention and processing speed. Such deficits are difficult to tease out when the attorney enjoyed a high baseline of functioning to begin with. We have represented many attorneys over the years, and know that insurance companies typically require objective evidence of cognitive decline to support a claim. Neuropsychological testing can be a valid and reliable tool to prove cognitive decline and is recommended where a claimant experiences an impairment that affects their brain functioning. Courts recognize how cognitive skills are vital to the practice of law.

In Teicher v. Regence Health & Life Ins. Co., 562 F. Supp. 2d 1128, 1140 (D. Or. 2008) the claimant attorney filed a claim based on cognitive decline following a traumatic closed head injury, post concussion syndrome and TBI. He scored within the average percentile on neuropsychological tests and benefits were denied. Yet, Mr. Teicher’s neuropsychologist opined that “the critical measure of impairment of an intelligent person such as Plaintiff is the relative change from his pre-injury abilities . . . a drop from the 99th percentile to the 50th percentile reflects a drastic change indicative of an impairment.” The court agreed, as “the record reflects Plaintiff’s high-level executive functions, including his ability to process and to learn new and complex information are, fundamentally impaired” and are so detrimental to his ability to practice law that he is totally disabled. The court further concluded that Mr. Teicher’s ability to read and write does not satisfy the requirements of his profession because “an attorney is not permitted to satisfy only some of the standards required by the profession.”

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Cognitive deficits are an important consideration when determining disability. However, insurance companies tend to undervalue the debilitating impact that pain medication can have on a person’s mental state. If a claimant is suffering from cognitive deficits, the insurance company will usually handle the claim in one of two ways.

First, insurance companies will ignore the claimant’s cognitive complaints and proclaim work capacity in a sedentary occupation. This claim mishandling was seen in Mossler v. Aetna Life Ins. Co., 2014 U.S. Dist. LEXIS 89046 (C.D. Cal. June 30, 2014), where the court reviewed the denial of Long Term Disability benefits to a Senior Vice President, who had become disabled due to symptoms including widespread pain, fatigue, side-effects of medications, and cognitive deficits. Aetna denied Mossler’s benefits based on the opinion that he could perform a “sedentary” occupation. However, the court rejected Aetna’s basis as incorrect, pointing out that “even assuming Plaintiff could perform sedentary work, [Mossler] has many other intellectual responsibilities that require both financial expertise as well as a high level of interpersonal skills.”

Second, insurance companies are quick to disregard cognitive complaints when attributed to necessary narcotic pain medication. Many of our clients suffer from chronic pain and treat with pain management specialists. Prescribed narcotic pain medication is problematic because it can impact cognition. Courts recognize that effects of narcotic medication cause disability. For example, a court in determining that Unum unreasonably denied a claim based on its assumption that Bencivenga’s medical condition had improved with his reduction in the number and strength of prescribed pain medication does not automatically mean that his chronic pain has improved. A change in a claimant’s “medication regimen is [not] evidence of any vast improvement to his underlying medical condition” given his prolonged use of narcotic medication. Bencivenga v. Unum Life Ins. Co. of Am., 2015 U.S. Dist. LEXIS 39117 (E.D. Mich. Mar. 27, 2015).

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