Winning Isn't Easy: Long Term Disability ERISA Claims

Carrier Spotlight Series: What Disability Insurance Policyholders Insured Through United of Omaha Need To Know About Their Claims Denial Tactics

November 15, 2021 Nancy L. Cavey Season 2 Episode 39
Winning Isn't Easy: Long Term Disability ERISA Claims
Carrier Spotlight Series: What Disability Insurance Policyholders Insured Through United of Omaha Need To Know About Their Claims Denial Tactics
Show Notes Transcript

Episode 39 Season 2: United Of Omaha Carrier Spotlight

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Nancy L. Cavey:

Hey, I'm Nancy Cavey national ERISA and individual disability attorney welcome to Winning Isn't Easy. Before we get started, I have to give you a legal disclaimer. This podcast is not legal advice. The Florida bar association says, I have to say it. So I've said it, but nothing will ever prevent me from giving you an easy to understand overview of the disability insurance world, the games that disability carriers play and what you need to know to get the disability benefits you deserve. So off we go, do you have a United of Omaha short-term or long-term disability insurance policy, or are you the beneficiary of an employer provided United of Omaha or mutual of Omaha disability plan? If so today's podcast is for you. If not, and you're insured by another carrier, you can still learn lessons from this podcast because carriers play from the same denial game playbook. I'm going to talk about four things today. If your short-term disability claim is denied, do you have to exhaust your administrative remedies before you file a claim for long-term disability benefits? Two , I'm going to talk more about the fertility doctrine and what it is three, a late diagnosis in a secondary Parkinson's disease, disability insurance claim, and the games that mutual of Omaha will play with late diagnosis . And for Halla , Alabama court rejected the businesses . Usual claims denial because the treating physician didn't respond to the night of a home was request for comment. We've got a lot to cover today, but let's take a quick break. Before we get started.

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Nancy L. Cavey:

All right, you ready to get started? Welcome back. If your short-term disability claim is denied, do you have to exhaust your administrative remedies before you can file a claim for long-term disability benefits? Well, let me set the stage here. One of the fundamental principles in an ERISA disability insurance policy or plan is that you have to exhaust all of your administrative remedies before you can file a lawsuit in federal court. Let's first talk about what is an ERISA plan or policies who can figure out whether or not you have to exhaust your administrative remedies. If your employer has offered you a group disability insurance policy, by either buying a insurance policy from a company like United of Omaha, or they sponsor a plan to provide disability benefits, most likely your policy or plan is going to be covered under the ERISA statute. Now, there are two exceptions. If your employer is a church-based plan or your employer is a governmental entity, the policy or plan is governed by state law, not federal law. If your policy or plan is governed by the ERISA law, as I said, you have to exhaust all your administrative remedies before you're allowed to file a lawsuit in federal court, challenging the denial or termination of your benefits, but what happens in the case of a denial of a short term disability claim? Do you have to exhaust your administrative remedies? Well, often what will happen is that the short-term disability plan or policy will pay short-term disability benefits. Once you satisfy, what's called an elimination break . It's a period of time in which you have to be disabled. Um, and I think of it as a waiting period. And once you've satisfied that weighty print, you can get your benefits. Now, one of the first lines of defense to a short-term disability claim is that the carrier is going to argue that you haven't met the elimination rate . You weren't totally disabled or met the disability requirements during this elimination period . And the second line of defense is to deny the full payment of the period of short term disability benefits on the basis that there has been improvement. But then the question is, well, where does that leave you? If you have a long-term disability claim, do you have to appeal the denial of the short-term disability benefits before you file a claim for your long-term disability benefits? Can you ignore the denial of the balance of the short-term disability claim and just file a lawsuit in federal court for your long-term display benefits? Now, a good example of this dilemmas found in the case of , uh , [inaudible] versus United of Omaha, it's a Southern district, California case, and this person worked for children's physicians group , uh, as a financial analyst and accountant, she had both short and long-term disability coverage through her employer. And as a result, her case was governed by what law, if you set ERISA you're right now, she applied for and was paid her short-term disability benefits because of a need to alternate sitting and standing and the need to elevate her legs. And of course, visual Omaha had her medical records reviewed by a clinical nurse consultant who applied that for only a short period of time. Did she have these functional restrictions and limitations that prohibited her from performing her own occupation? And as a result, mutual of Omaha only paid a limited period of the short term disability benefits and then denied the balance she appealed and that was denied. And of course, importance was the fact that she didn't file a separate claim for her long-term disability benefits. And she then filed a lawsuit asking for both our short and long-term disability benefits. And at that point, the carrier pay the balance of the short-term disability benefits. But what happened to the long-term disability benefits mutual Omaha defended the claim on the basis that that claim was not properly before the court, because she had no standing and she had failed to exhaust her administrative remedies by filing an appeal on w filing an application , uh, and then ultimately filing an appeal , um, in her long term disability claim. So what did the court do about the standing and exhaustion of remedies arguments? Now, I'm going to explain a concept called standing, and it doesn't mean you're standing on your feet. Um, mutual of Omaha first argued that she didn't have the ability or standing to claim a long term as we've been. And it's because she never filed a claim for those benefits. And the court said, well, she has a concrete stake in this dispute because she was claimed entitlement to monetary , um, benefits. And the fact that she was seeking money, gave her a stake . We're standing in the outcome. Now the next line of defense that mutual Omaha through up to this was exhaustion of remedies. And they argued this since she never filed a claim for long-term disability, benefits submitted any medical reports in support of her claim . And that mutual law had never had an opportunity to decide her claim that she hadn't exhausted her administrative remedies. And they said, because you didn't file, the time has run and your claim is barred. Now this argument is generally successful, but in this case, she argued that mutual of Omaha is treatment of her short-term disability claim doomed any longterm disability claim. Now we're going to get into a little bit of legal ease here and bear with me because this is important. The court looked at the ERISA history of exhaustion of remedies doctrine. And as a rule, the claimant has to avail themselves of the plan's own internal application and review process. Before suing in federal court, the exhaustion of administrative remedies serves several important policy considerations, including the reduction of frivolous litigation, the promotion of consistent treatment of claims, the provision of non-adversarial methods of claim settlement, the minimization of costs of claim settlement, and a proper reliance on administrative expertise. So the disability care in deciding a claim. Now, the judge noted there was an exception to the exhaustion rule. And one of the most common exceptions is what's called the futility argument, which means that the claimant doesn't have to go through the administrative process. If it would be futile . In other words, you'd be banging your head against the wall and it , you have to however, demonstrate that following that route, that administrative route by filing the claim or an appeal is doomed to fail. Now, each case is fact specific in this case, the court noted that mutual of Omaha handled both the short and the long-term disability claim. And the definition of total disability was the same for both the short and long-term disability benefits. But the court noted that the elimination periods were different. So under the terms of the short-term disability plan, she had to be fully disabled for 14 days. The LTD plan required an elimination period of 90 days. Now she argued that if the claims administrator determined, she didn't satisfy the 14 day short-term visible elimination grid, she would never have ever, ever met that long-term disability 90 day elimination period. In other words, the claims administrator would have concluded that she didn't satisfy the same definition of disability for an even longer period of time. And that following the claims process for long-term disability was feudal amazingly the court agreed and found that her failure to exhaust her administrative remedies was excused under the futility argument and allow her longterm disability claim to proceed. Now, I think that rolling the dice and hoping that you're lucky is not a strategy for getting your disability insurance benefits. In my opinion, she was very lucky, lucky to get the right judge who accepted the fertility argument. But luck, as I've said is not a strategy. And more often than not, the federal judge would say too bad. So sad. What I do in my cases is I want my, I want to file an appeal on the short-term disability appeal denial as she did here. And when it's denied, I want my client to file a long-term disability application. Because when that claim is denied, we will obviously file the appeal, which most likely will be , um, feudal . And at that point, I want to shoot for both the short and long-term disability benefits. I don't want there to be any, any question whatsoever about the exhaustion of remedies. Now, I think that , um, that is a better strategy than just hoping that you get the right judge, because I will tell you, as I've said, it's rare that a judge will do with this particular judge did again, is fact specific , but luck is not a strategy. I'm going to take a quick break and let you digest this because we're going to talk more about fertility and why it's important. Welcome back to winning. Isn't easy. Now, in my first segment, I talked about the fertility argument and how the claimant in that case was darn lucky to get a judge who , uh, excused the failure to exhaust administrative remedies. But I'm going to tell you the story about , uh, another person who couldn't pass, go and file a lawsuit for the long-term disability benefits, because he had never claimed them. And this is the flip side of the story that I just told you in our first segment. So if your claim for short term disability benefits has been denied and your appeal has been denied, can you go into court and Sue and also claim long-term disability benefits? And you'll see this case that I'm going to talk about is the more common result and it results in a fatal mistake. Now, when you file the lawsuit , uh , and you have not filed a claim for long-term disability benefits , um, but you're claiming that in your lawsuit, I want to be paid my short-term disability benefits and my long-term disability benefits. And while I didn't file a long-term disability claim, they never would have paid it anyway. I don't have to exhaust my administrative remedies. Well, in the case of Anderson versus United of Omaha, a Michigan case, Mr. Anderson was employed as a forklift driver. He claimed he was disabled as a result of obesity, diabetes, and neuropathic pain. He filed a claim for short-term disability benefits, which was denied and denied on appeal. He never ever applied for long-term disability benefits. Before you filed a lawsuit in federal court, claiming both your short and his long-term disability benefits, what did United of Omaha do? What they always do? They ask the court to dismiss the long-term disability, counter the lawsuit on the basis that Anderson had never filed a claim for long-term disability benefits and exhausted the administrative remedies. As I talked about before, one of the fundamental principles of ERISA is that a policy holder has to exhaust the administrative remedies before filing a lawsuit. A court can only excuse the , the failure to exhaust administrative remedies, if it would be futile to pursue the administrative remedy or that the remedy is inadequate. Now, what do you have to do to prove for tail fatality? That is that you have to prove that it's certain, absolutely certain that your claim would be denied on appeal. Not merely that you death at the appeal would be denied, but that it would be denied now as a result. And as a practical matter, I find that the futility argument really only works when the policy holder is questioning the plan's legality or whether the policy holder challenges the plan or discipline carries authority to decide the claim, the purpose of an appeal. And the exhaustion of remedies is to let the planner , the disability carrier correct their mistakes, interpret the plan or the policy gather records that will assist in the decision-making process. And most courts will accept that position. Now, Anderson responded by saying, look, filing a claim for long-term disability benefits, getting a decision appealing, that decision that all had been futile , because the very same evidence that I submitted in support supported my short-term disability claim supported my long-term disability claim. He reasoned that if mutual of Omaha denied his short-term disability claim on the evidence that they had, that mutual of Omaha will also have denied his long-term disability claim. But where's the proof just because you think it's so does it make it? So the court obviously did not buy that argument and said that that didn't fall within the two fertility , uh , scenarios in which the exception applied as a result, the court denied his long-term disability claim with prejudice. That means that Anderson killed his long-term disability claim. And couldn't go back and file a long-term disability claim, file an appeal, and then file a suit. His case was done. So, as I've explained, and as I believe strongly, what you should be doing is if your short-term disability claim is denied, you file an appeal. If that appeal is denied. So be it. But while you are filing that short-term disability appeal, you also want to be filing a longterm disability claim. So you , you obviously you're doing a timely. What will happen generally is that the long-term disability claim is going to be denied for lots of reasons that impart or related to the short term disability claim. And once that longterm disability claim is denied, then you're going to file an appeal. If that appeal is denied, as it probably will be then, and only then do we file a lawsuit for both the short and the long-term disability benefits. Now I know that can be financially painful for you to go without income, but otherwise you can see the traps that , um , were came before you, if you're just filing a lawsuit involving the short-term disability claim, and you never proceed on a claim for long-term disability benefits. Got it. All right, let's take a break.

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Nancy L. Cavey:

Welcome back to Winning Isn't Easy. Let's talk about how a late diagnosis in a secondary Parkinson's disease, disability insurance claim , uh , can work to the advantage of disability carriers like mutual of Omaha. Parkinson's disease can be difficult to diagnose, and that difficulty is used by disability cares as an excuse to delay a decision or even deny the claim. If that isn't enough, the disability carriers will often question whether or not the symptoms result in impairment. So they are questioning not only the diagnosis, but they're questioning whether or not your symptoms result in a disabling impairment as defined by the terms of your particular policy. So I'm going to tell you the story about how mutual of Omaha used these excuses to deny legitimate claim and how one federal judge said no way. Now, Ms. Withers was employed by a Denta as the director of supported employment, and that job required a high degree of cognitive functioning. She provided oversight to individualized placement and support for support through the employment programs. She did training and supervision. She monitor staff in the field. She implemented quality improvement plans, and she acted as a liaison to other departments and agencies with her employer. Now, obviously this job required effective written and verbal communication, and she had to function with team members. She had to adapt to new and changing situations. She had to respond to emergencies and she had to deal with safety compliance. Her employer wrote a letter in support of her disability claim saying that she could not interact with the employees and clients at the capacity that was safe for her and those around her. Now, over the years, she had been diagnosed with manure's disease Hashimoto's syndrome and an excessive sweating disorder. She underwent a tilt table test for postural orthostatic tachycardia on his pot , which yielded borderline abnormal results. Now you can see there's a question as to really what her diagnosis is, but in March of 2018, physical examination showed hyper reflexes of the knee with blurred vision and right hand issues with , um, with tremors. And she also had head tremors, but with Brady kinesia, now she was diagnosed with unspecified tremors and secondary Parkinson's without a clear diagnosis, she continued to present for evaluation treatment with the ongoing tremors and positive exam findings. And it wasn't really until April of 2018, that she got the diagnosis of secondary Parkinson with tremors. But the etiology wasn't clear by may of 2018, her symptoms had progressed and she had even had decreased arm swing. However, the physicians wouldn't make a clear diagnosis, even though she presented with all the common symptoms of Parkinson's. And finally it, August of 2018, she was diagnosed with Parkinson's disease. So what did she do? She applied for received her short-term disability benefits through mutual of Omaha. But when she applied for long-term disability benefits, her claim was denied, not withstanding the fact that her Parkinson's symptoms had progressed. Omaha had her file reviewed by several liar for hire physicians. Who of course didn't agree with the diagnosis of Parkinson's. They didn't feel that the physical exam findings supported any specific restrictions, limitations. The mutual of Omaha doctors argue this since there wasn't a specific diagnosis, there was insufficient evidence to justify the restrictions and limitations assigned by her doctor. So in other words, they're saying no diagnosis, no restrictions or limitations. Now, if that wasn't bad enough mutual of Omaha objected to the letter written by her employer on the basis that our employer was relying on her subjective complaints, they insisted that the letter had no value because the employer didn't specifically comment on the symptoms that impacted her job duties and our inability to perform the duties. Now, this is the employer who has purchased this mutual of Omaha policy. Really? So what did the judge do? Uh , the judge in this Western district of Kentucky case weathers versus unit , uh , United of Omaha, was not impressed with the pure review doctors. Then it considered the mental or physical requirements of her job mutual of Omaha's liar for hire doctors, never addressed the requirements of her position, and they never explained how she would, could allegedly be able to continue working. The judge criticized Omaha's failure to consider the objective findings of the Parkinson's, including her tremors , um , her gait issues and their impact on her ability to work. The judge saw through the no diagnosis in the no impairment game and awarded back short and long-term disability benefits. So the lesson here is that , uh, you don't necessarily have to have a diagnosis, but certainly you do have to have objectively documented restrictions and limitations that would prevent you from doing the material and substantial duties of your own occupation or any occupation. And I think having the support, not only of your physician to explain that, but the support of your employer to explain the symptoms that you're having and how they impact your ability to do your work is crucial. Got it. All right . Let's take a quick break. Welcome back to winning. Isn't easy. How, what Alabama court rejected a business as usual claims denial because the treating physicians did not respond to United of Omaha request for comment. What are the new denial games in the world of ERISA is for disability carriers to have their liar for higher peer review doctors opine that the disability policy holder can work. And then they'll send a letter to the treating physician for comment. If the treating physician doesn't respond, the carrier will treat that silence as an agreement that the policy holder can work. Despite the treating physicians earlier opinions, the carrier will say, gotcha, your doctor didn't respond now. That's not fair. And the United of Omaha got called out as it should have been for its behavior. In the case of Wiley vs United of Omaha life insurance company in this Northern district of Alabama case , uh , Wiley was a senior business analyst and he could not maintain the attention and concentration that was required to perform analytical task on a sustained basis. This was corroborated by Mr. Wiley's physicians, objective medical testing, and multiple spinal surgeries with postoperative neuropathy, which is tingling and numbness yet United of Omaha is liar for hire doctors concluded he could work and they sent out a report with their conclusions to Wiley's treating physicians asking. Do you agree with our conclusion that while they could perform his occupational duties as a senior business analyst, I'm trying to be fair. And I want your input. What do you say doctor? Well, when the doctors didn't respond United of Omaha used that lack of response as justification for the claims denial. When Wiley sued, the court said not so fast and they outlined in a 56 page decision with an extensive appendix to the administrative record that the court on its own created detailing in chronological order, the medical facts of the case, the court ruled that the treating physician's lack of response was entitled to little weight . And there was no reason to ignore the extensive medical records and evidence that supported this claim. In fact, the court said ignoring the breadth and depth of such objective evidence allows insurance companies to subvert meritorious claims by simply increasing the paperwork burden on claimant's physicians. Don't you just love that. So treating physicians who fill out attending physician statements and have to put up with carrier harassment are in my view, the true heroes of the long-term disability claim world. I would prefer a horse that your doctor respond with input from me and , uh, a conference with me. Uh, and normally I do this in the form of a statement from the doctors , uh , because I don't want to leave their liar for hires self-serving conclusions to go unrebutted. What do you think? Well, what are the lessons that we've learned today? Well, first we've learned if your short-term disability claim is denied, you have to file a long-term disability claim immediately. Secondly, we learned you really need to unexperienced ERISA display trade help you with your claim. Thirdly, we've learned that you needed a timely file , uh , that appeal of your short-term disability claim. Cause you only have 180 days. And if you were long-term disability claim is denied. You'll have to timely file an appeal that which is normally 180 days. And if you are long-term disability appeal is denied. Then we want to timely file a lawsuit on both your short and long-term disability claims. And we've learned that we don't want a disability carrier to Rob you of your peace of mind within non diagnosis, not impairment denial. And we've lastly learned that your physician is the key to getting your benefits. I hope that you've enjoyed this week's episode. If you liked this podcast, I would love it. If you would like our page, leave a review and share it with family and friends. Remember my podcast comes out weekly. So tune in next week for another insightful episode of winning isn't easy.