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We have been following the Courts’ treatment of mental or nervous disorders limitations in group long term disability policies. (See blog, Disability Caused by Physical Impairment, July 2015)  Recently, the 6th Circuit Court of Appeals joined other courts holding that a claimant is disabled by physical conditions alone, then the mere presence of a psychiatric component does not justify application of a mental health limitation to a claim.  In Okuno v. Reliance Std. Life Ins.Co., 2016 U.S. App. LEXIS 16423 (6th Cir. Sept. 7, 2016),  Reliance applied the one year limit on benefits because there was the presence of a psychiatric component to her claim regardless of the physical component to her disability. The court rejected Reliance’s rationale that as so long as there is a comorbid psychiatric condition the limitation applies.

Every federal circuit court to consider the meaning of the phrase “caused or contributed to by” has read it to exclude coverage only when the claimant’s physical disability was insufficient alone to render him totally disabled. See George v. Reliance Standard Life Ins. Co, 776 F.3d 349 (5th Cir. 2015).  The insurer bears the burden to show that the exclusion applies to the case.  “The effect of an applicant’s physical ailments must be considered separately to satisfy the requirement that the review be reasoned and deliberate.”  See Okuno . In order to overcome the insurers’ application of this mental health limitation to continued benefits, the claimant must claim total disability as the result of a purely physical condition.

What if a physical condition is covered, but the symptoms include depression, which is a mental illness? Courts caution that policy terms and precise medical facts of the claim must be examined.  See, for example, Leight v. Union Sec. Ins. Co. 2016 U.S. Dist. LEXIS 68412 (D.Or. May 24, 2016).   Leight’s Aspergers’ Disorder is expressly exempt from the definition of “mental illness” in the policy but Union Security attempted to apply the mental illness limitation, since the disorder produces disabling symptoms of anxiety and depression.   The court determined that the mental illness limitation did not apply since Aspergers was a ‘covered condition.”

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Disability insurers love to deny claims based on their medical consultant’s conclusion that the claimant has “sedentary capacity.” The insurer’s vocational counselor swiftly identifies various jobs that the claimant can allegedly perform without performing a full or fair investigation of the transferable skills. Does the inquiry end at the point it is established that the individual can sit in a chair at a desk for a period of time?

Just as important is whether the individual has marketable skills to perform a “desk job”, since virtually every “sedentary” job requires strong computer skills.  In our experience, the qualifications related to real time computer and technology use are under investigated in the insurers’ rush to deny.

We have seen some changes in the collateral information the insurers collect regarding our clients.  For instance. on the “activities of daily living” forms they must complete, our disabled clients are asked whether they own a computer, whether it is a desktop or laptop, what they use the computer for (pay bills, read news, facebook).  Be prepared for these are not innocent questions. It’s direct purpose is to establish that the claimant has full use of a computer and a skill that is “transferable” to the workforce.   In short, claimants should not overstate their computer use at home.

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Insurance coverage is based on the provisions of the contract and the proofs submitted by the claimant. In medical claims, a full and fair investigation of the facts concerning the particular claim requires the insurer to consult with medical professionals who are supposed to independently apply their expertise to the case facts and determine if the medical treatment is covered.

When coverage is improperly denied, the claimant will seek information about the denial, including the investigation of the claim and the rationale of the medical professional involved in the decision. Often the insurers rely on third party vendors who provide medical doctors to review the cases. These doctors have no direct contact with the claimant, and simply review medical records. Of course these doctors are paid for their time, but the question becomes, can they afford to be independent if they rely on this stream of income from a vendor who is unlikely to continue to hire them if their decisions do not support the insurers’ decision. The insurer must take steps to reduce potential bias. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 116, 128 S. Ct. 2343, 2351; 171 L. Ed. 2d 299 (2008).

Discovery into the medical reviewers is a basic necessity, but insurers often hide behind ERISA laws and fail to disclose information about the reviewers. We who represent the consumers in these cases, seek the identity of the reviewers, their credentials, how much they are paid for their services, how often they are used by the insurer, whether they see any patients of their own, and basically, if financial incentives skewed their decision.

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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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Rochow v. LINA 2013 FED APP. 0338P(6th Cir 2013). In a groundbreaking decision, the 6th Circuit awarded the Rochow’s estate both disability benefits due plus equitable relief under 502(a)(3). Rochow had been due the benefits since 2002, but had been tied up in legal battles with LINA (a subsidiary of CIGNA) ever since. The disability claim was litigated which resulted in a finding by the district court in 2005 that LINA’s decision was arbitrary and capricious. LINA appealed; however the Sixth Circuit affirmed the district court’s judgment. Upon remand to determine the amount of money due to Rochow’s estate, Rochow demanded an equitable accounting and asserted that LINA must give up (disgorge) the profits that it realized by holding onto the disability benefits ultimately awarded to Rochow.
The court cited a recent Supreme Court case,CIGNA Corp. v. Amara, 1312 S.Ct. 1866 (2010) which found the “surcharge” remedy is available in equity to “provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.’ The court noted, “Insulating LINA from disgorgement in this case would exacerbate the existing systemic conflict of interest.” Here the court justified its award, reasoning “LINA breached its fiduciary duty by continually ignoring its own plan definitions which resulted in wrongly denying benefits for five years after the initial request.” Disgorgement of the profits CIGNA earned by holding Rochow’s money was required to prevent unjust enrichment. The court awarded $3,797,867.92.

We at Bonny G. Rafel LLC handle disability cases against Cigna and all insurers, focused on restoring disability benefits and all other ancillary benefits that ended with a claim denial. This case demonstrates a new direction the courts may take under Amara to disgorge profits the insurers earn by wrongly denying claims.

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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.

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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.

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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.

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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.

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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.

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