Technicalities, Traps, and Missed Deadlines

Welcome to Season 6, Episode 10 of Winning Isn't Easy. In this episode, we'll dive into Technicalities, Traps, and Missed Deadlines.

ERISA disability claims are governed by strict rules that can determine whether benefits are approved or denied. Filing deadlines, notice requirements, and appeal procedures often give insurance carriers leverage to delay or reject claims, even when a condition clearly prevents someone from working. Insurers don’t just evaluate medical evidence. They closely examine whether claimants complied with policy terms, including timely notice and proper filing of STD and LTD claims. Missing a deadline or failing to follow procedures can jeopardize benefits entirely. In this episode, we break down three key issues that frequently impact ERISA disability claims: how improper claim filing and notice failures can block benefits, how mental incapacity and delayed notice affect claim timing, and why pre-litigation attorney fees are often not covered even when a denial is wrongful.

In this episode, we'll cover the following topics:

One - If You Are on Short-Term Disability, What Notice Must You Give to Your ERISA Disability Carrier That You Want to File for Long-Term Disability Benefits?

Two - Written Notice of a Disability Claim at Issue in Provident Brain Cancer Case

Three - Does My ERISA Disability Carrier or Plan Have to Pay Pre-Litigation Attorney Fees?

Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.


Listen to Our Sister Podcast:

We have a sister podcast - Winning Isn't Easy: Navigating Your Social Security Disability Claim. Give it a listen: https://wiessdpodcast.buzzsprout.com/


Resources Mentioned in This Episode:

LINK TO ROBBED OF YOUR PEACE OF MIND: https://mailchi.mp/caveylaw/ltd-robbed-of-your-piece-of-mind

LINK TO THE DISABILITY INSURANCE CLAIM SURVIVAL GUIDE FOR PROFESSIONALS: https://mailchi.mp/caveylaw/professionals-guide-to-ltd-benefits

FREE CONSULT LINK: https://caveylaw.com/contact-us/


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Need help with your Long-Term Disability or ERISA claim? Have questions? Please feel welcome to reach out to use for a FREE consultation. Just mention you listened to our podcast.

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Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals.

Transcript

Nancy Cavey [00:00:08]:
 ERISA disability claims are full of technicalities and can trap even the most diligent and thoughtful policyholders. Missed deadlines, unclear notice requirements, and disputes can leave claimants without the benefits they deserve, even when their medical condition clearly prevents them from working. In today's episode, I'm going to talk about the small missteps that can have major consequences in the world of short and long-term disability claims. Hey, I'm Nancy Cavey, national ERISA and individual disability attorney, and I want to welcome you to Winning Isn't Easy. Before we get started, I have to give you a legal disclaimer. This podcast isn't legal advice. The Florida Bar Association says I have to tell you this, and now that I've said it, 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.
 
 Nancy Cavey [00:01:14]:
 Now, ERISA disability claims and policies are often filled with fine print that can make or break your claim, and what you'll find in disability policies or are filing deadlines, notice requirements, and appeal procedures. These can all give disability insurance carriers and plans tools to deny or even delay claims, even when your condition is clearly disabling. In today's episode, I'm gonna break down this into 3 parts. First, I wanna talk about the importance of properly filing a short-term disability and long-term disability claim, and how failing to follow notice procedures can result in the denial of benefits, such as in the case of Nicholas Ray. Next, I'm going to explore how a diminished mental capacity and delayed notice can impact your claim timing, and I'm gonna talk about the case of Angelica Nabi. Finally, I'm going to be talking about why ERISA plans are often not required to cover pre-litigation costs even when claims and appeals are wrongfully denied. So by the end of this episode, I want you to understand why attention to detail, timely action, and legal knowledge are essential to protecting your disability benefits. So let's dive in.
 
 Nancy Cavey [00:02:35]:
 I'm gonna talk about 3 specific things. Number 1, if you're on short-term disability, what notice you have to give to your ERISA disability carrier to file for long-term disability benefits. 2, written notice of a disability claim at issue in a Provident brain cancer case and lessons you can learn. And 3, does your ERISA disability carrier plan have to pay pre-litigation attorney's fees? But before we get started, let's take a break before we get into this episode.
 
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 Nancy Cavey [00:03:32]:
 If you're on short-term disability, what notice do you have to give to your ERISA disability carrier that you want to file a claim for long-term disability benefits? Now that sounds like a pretty simple question. But the answer is as complicated as a law school examination question, and I'm going to explain the answer by telling you the story of Nicholas Ray. He worked as a senior manager at a management and technology consulting company. He suffered from a rare autoimmune disorder that was characterized by an inflammation of the blood vessels. As his disease progressed, he stopped working and he applied for his short-term disability benefits. Now the short-term disability plan was administered by the Life Insurance Company of North America, LINA. The short-term disability plan was self-insured by Ray's employer, and that meant that the employer paid all of the benefits under the plan, but the plan delegated to LINA the discretionary authority to decide all benefit claims and appeals. They were the claims administrator.
 
 Nancy Cavey [00:04:35]:
 Similarly, LINA was responsible for making all claim determinations and paying all benefits under the long-term disability policy. Now, Lina had his medical records reviewed by their liar-for-hire peer review doctors who opined that there were no functional limitations that would prevent him from performing his own occupation. He appealed the denial of the short-term disability claim, and in his supplemental appeal letter, he advised that he wanted to apply for long-term disability benefits. And in the appeal letter, his attorney stated in part, as an initial matter, to the extent that LENA has not already opened a long-term disability claim for Mr. Ray, please let this letter serve as notice of his application for long-term disability benefits. For his long-term disability claim, we incorporate by reference all records from his short-term disability file, including but not limited to the documents that we're attaching with this appeal. If Lena requires any other forms or anything else to process his long-term disability application, please let us know as soon as possible. Now, to me, that was very reasonable, and I would not necessarily have had a problem with that being proper notice of a long-term disability claim.
 
 Nancy Cavey [00:05:52]:
 But as a result of what the court ruled in this case, I will tell you I've learned some lessons, and we've changed the way that we handle this type of a situation. Why? Well, LINA did not request additional information regarding the long-term disability claim. It once again determined that his symptoms weren't disabling and once again denied the short-term disability claim and never addressed the long-term disability claim. Now, ultimately, a lawsuit was filed in federal court by Ray seeking clarification of his right to past and future benefits under both the short- and long-term disability plan. One of the defenses that they raised was that Ray had failed to exhaust his long-term disability claim by failing to properly initiate the claim under the policy notice requirements. And they argued that Ray had failed to exhaust his administrative remedies and that the time to do so had passed. Unfortunately, the court agreed that Ray couldn't— could no longer timely file a claim for long-term benefits. And I think that was a horrible decision.
 
 Nancy Cavey [00:06:56]:
 So let's talk about some basic principles. One of the basic principles is, in the ERISA world, is that you must exhaust your administrative remedies before you can file a lawsuit. So you have to file a claim. If the claim has been denied, you have to timely file an appeal. And if the plan or policy gives you the right to a second level of appeal, You've got to do that and exhaust your administrative remedies before you can file a lawsuit. And that was one of the arguments that the carrier made, that, you know, you just didn't follow through. You never filed a long-term disability claim to begin with, and therefore there's no claim. And even if you had, you didn't exhaust your remedies.
 
 Nancy Cavey [00:07:42]:
 I think that is also a silly inaccurate argument. But what are the lessons that are— should be learned here? So first off, if you are filing a claim for short and long-term disability benefits, you should first file the claim for short-term disability benefits. If that claim is denied, then I think you should be filing an appeal of the short-term disability claim. and you should be doing that in a timely basis. And normally you will have, um, basically 180 days after the claim is denied in which to file the appeal. So if the short-term disability claim is denied, you should be filing an appeal and doing so within 180 days. Now the disability carrier has two 45-day periods in which to make a decision. And if they blow the first 45 days, or if they also blow the second 45 days, that can be really crucial.
 
 Nancy Cavey [00:08:46]:
 And what do I mean by that? Under the ERISA regulations, the disability carrier or plan has to make a decision in 45 days. And if they don't without good cause and notice, then you can actually run to the courthouse, file your lawsuit, and potentially change the burden of proof from what's called arbitrary and capricious to de novo standard, which is what you really want. Now, if they seek the extension, which is a 45-day extension, and then after 90 days they haven't made a decision, once again you want to be running to the courthouse and filing that lawsuit on the basis that you exhausted your administrative remedies and they failed to make a timely decision. And please, court, let's change the burden of proof, if you will, from arbitrary and capricious to the de novo standard of review. Now, once the short-term disability claim is denied, you want to file a claim for long-term disability benefits, so long as you are giving the long-term disability carrier timely notice. I will tell you that notice requirements can vary from short-term disability policies or plans to long-term disability policies or plans. So if the short-term disability policy or plan says you've got 90 days to file a claim, you might not be surprised or you might be surprised to learn that that's a different time frame in long-term disability. You only have 60 days to file a claim, so never rely on the same notice requirements.
 
 Nancy Cavey [00:10:17]:
 And obviously the best advice here is to get a copy of both the short and the long-term disability policy or plan to understand what's going on. Now what we do is we file the claim for the long-term disability benefits. And if the long-term disability claim is denied, then we file an appeal. And if that appeal is denied, then we have exhausted our administrative remedies. And at that point, we file a lawsuit on both the short-term and long-term disability claims. Now, obviously, if the long-term disability claim is approved, you simply want to file a lawsuit on the short-term disability claim. You can see that this can be obviously complex because you need to understand what the notice requirements are for putting the carrier or plan on notice of filing a short and a long-term disability claim. You need to make sure that you're complying with those deadlines.
 
 Nancy Cavey [00:11:14]:
 You need to make sure that you're exhausting your administrative remedies before you file a lawsuit. Now, I personally think that the lawyer did what they should have done. But obviously the court disagreed. So as a result, I am making sure in our cases that we are never, ever, ever combining the notice of a long-term disability claim in the context of a short-term disability appeal. What I would've done had I been in this situation, and now that I know what the court did, is I would've taken the comments that that lawyer made about, hey, I'm putting you on notice of a long-term disability claim, We're incorporating by reference everything that was in that short-term disability claim, and we also want you to look at the stuff we are including in this appeal. And I would have made a separate letter out of it, and I would have said, dear carrier, please accept— or plan— please accept this letter as notice of our claim for filing a long-term disability claim. We are incorporating by reference all of the material that is in the short-term disability claim of which you potentially are the administrator. And by the way, we've also enclosed additional information.
 
 Nancy Cavey [00:12:28]:
 If you don't have access to that short-term disability claim so that you couldn't incorporate it by reference, please let us know and we will provide you that information. And please acknowledge the receipt of our notice putting you on notice of our claim. And by the way, send us the next— the necessary claim file materials, the claim forms you want us to fill out to claim long-term disability. Now again, I learned a lesson in this case. And while I want you to understand that Nicholas Ray's case illustrates the importance of following notice rules and exhausting administrative remedies, that there are situations that— they're not often, but they happen where a claimant's diminished mental capacity due to illness can make that timely notice nearly impossible. And so in our next segment, I'm going to talk about how that plays out when we have a life-threatening disease that intersects with filing and legal deadlines. Let's take a break. Welcome back to Winning Isn't Easy.
 
 Nancy Cavey [00:14:13]:
 Written notice of a disability claim at issue in a Provident brain cancer case. Now, did you know that most disability policies or plans require that you give timely notice of your intent to file a disability claim? And by the way, that you also have to actually file the claim within a certain period of time. So two kind of time requirements here. There could be significant financial consequences for the failure to do both of those. But I want to tell you the story about Angelique Nabib, who was diagnosed with a fast-growing and aggressive brain cancer for which she underwent brain surgery, chemotherapy, and high-dose radiation. Now, the average life expectancy is just 2 years, but she not only beat the odds, but she continued to work as an office administrator until 2009. Her treatment resulted in radiation necrosis of the brain, leaving her with significantly diminished executive capacity that obviously resulted in an inability to do her occupational duties. Now, under the terms of the policy, she was required to give written notice of the claim and apply for benefits as soon as reasonably possible.
 
 Nancy Cavey [00:15:22]:
 She didn't remember she had a disability policy, and it wasn't until 2021 that her husband discovered that she in fact had a policy. So she filed a claim in 2021. And Provident only paid benefits from the date of the claim in 2021 and not as of the date she stopped working in 2009. So they said, well, you gave us notice in 2021, we'll pay forward, but you didn't give us notice back here in 2009, and we're not going to pay benefits from 2009 to 2021. You can imagine that they weren't happy, and this case ends up in federal court. She argues that because of her diminished executive capacity or mental capacity, she didn't recall that she had a policy, and then when she did, she gave timely notice as soon as possible. Now, of course, Provident disagreed, and this case ends up in federal court. The court was asked to accept the testimony of her treating neurosurgeon about her mental processing problems, and One of the issues in this case was this information was never submitted in the appeal process, and the carrier argued, well, since it wasn't submitted, you, the court, shouldn't be looking at it.
 
 Nancy Cavey [00:16:39]:
 Now, in the Second Circuit where this case was filed, courts have considerable discretion to consider evidence that is outside the administrative record when there's good cause to do so, and the court found that there was good cause given Prudential's financial conflict in the fairness and clarity of the decision-making process, and her physician's opinion that she lacked the mental capacity to file a claim following the treatment in 2009. The court allowed the neurosurgeon's opinion into evidence but then ruled that there were still genuine evidence of material fact as to whether she had filed her claim as soon as reasonably possible. Given that 12-year delay between the onset of her disability and the filing of her claim. And so this is an interesting situation because the case was then set for a bench trial and we don't have a decision, but I suspect that the parties settled the case. So what are the lessons here? Even when notice is given properly, technicalities don't end there. Fortunately, I think the court appreciated the extent and devastating nature of her cancer and treatment and was going to give her potentially a pass, if you will. That is not always the case. There is, of course, the mental incapacity argument, and normally that is more of a psychiatric issue as opposed to a cognitive impairment issue as a result of surgeries.
 
 Nancy Cavey [00:18:09]:
 So I think this case was a bit of an exception. To the general rule, but I think you also need to understand that even when proper notice is given, technicalities don't end there. And of course, that's what the court was going to be considering, was what, what's this delay all about. Now, I often get the question about legal costs and pre-litigation procedures, and the question always is, well, do "Do I pay your attorney's fee for all this pre-litigation work, or am I responsible for it?" And I will tell you that more often than not, claimants are left paying attorney's fees even when the plan's denial was clearly wrong. And our next segment is going to dive into the question of whether ERISA policies or plans are required to cover pre-litigation attorney's fees. So let's take a break.
 
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 Nancy Cavey [00:20:09]:
 Welcome back to Winning Isn't Easy. Does my ERISA disability carrier plan have to pay pre-litigation attorney's fees? Have you been denied your recent disability claim or have your benefits been terminated? Now, as we've discussed, you have the obligation to exhaust your administrative remedies by filing an appeal and doing so within 180 days. The appeal is the trial of your case. I can't overemphasize that. Just writing a letter that says you appeal is not going to cut it, because ultimately, if this case ends up in litigation, the court is going to be looking at what the carrier did and what your response was. Our appeal letters are 25 to 65 pages long, full of medical evidence, vocational evidence, statements, and of course, legal arguments. And we win many appeals, but it's frustrating for both of us to have to say, hey, we have to charge you an attorney's fee. You know, Kristi Modico, my associate, and I spend a lot of time writing these appeals, and we want benefits reinstated.
 
 Nancy Cavey [00:21:19]:
 But obviously we would prefer that the disability carrier plan be responsible for the payment of the fee because they more often than not have wrongly denied or terminated benefits. So does the ERISA disability carrier plan have to pay pre-litigation attorney's fees? So I want you— I'm going to give you a little bit of background here, and I'm also going to expand on this in view of a recent request that I was pleased to honor in which I was asked to do an attorney fee petition. So let's start out generically, if you will. The Tenth Circuit recently answered the case in that question in the case of Stark versus Reliance, and in the United States legal system, we have the American rule, which provides that each party to a lawsuit has to pay their own legal fees regardless of who wins or loses. However, there are fee-shifting provisions, and normally we will see these in the context of workers' compensation claims, and other types of litigation. So let's talk about potential fee shifting in the context of an ERISA case. 29 U.S.C. Section 1132(g) provides that in any action under this subchapter by a participant, beneficiary, or fiduciary, the court in its discretion can allow a reasonable fee and cost of actions to either party.
 
 Nancy Cavey [00:22:43]:
 Now under the ERISA— or I'm sorry, under the statute, when benefits are denied or terminated, you have to file that appeal within within 20 days of the date of denial. And in the Stark case, Reliance had paid benefits for several years before it terminated her benefits. Stark's attorney filed an appeal which was successful, and Reliance reinstated her benefits. Her attorney demanded that Reliance pay attorney's fees and costs for having to pursue the appeal and getting the benefits reinstated, and Reliance said, "Hell no." As a result, there was a lawsuit filed claiming entitlement to fees based on a breach of fiduciary duty failing to administer the plan in accordance with the law, and a breach of fiduciary duty by failing to inform and by providing misleading communications in the denial letter. Now, what did the 10th Circuit do? They reviewed the fee-shifting provisions and decisions of other circuits, paying particular attention to the word "action." Now, we lawyers sometimes make a mess out of the English language. Is an action filing an appeal, or is an action filing a lawsuit? Now, the Tenth Circuit agreed with other circuits who reviewed the issue and held that the word "action" in the context of an ERISA case refers to filing a suit and does not include pre-litigation proceedings like the appeal. Now, the court went even further, commenting that this interpretation promotes the soundness and stability of plans with respect to adequate funds to pay promised benefits. The court held that if benefit plans and insurers were potentially liable for attorney's fees for pre-suit proceedings, it might encourage plans to pay questionable claims in order to avoid paying fees.
 
 Nancy Cavey [00:24:30]:
 This incentive would reduce the plan's soundness and stability. Quite frankly, in my opinion— my legal opinion, that is bull. I think that that's a backwards interpretation of the provision and ignores what really happens in the context of ERISA. Disability carriers and plans have stables of doctors and other providers whose sole purpose it is, is to create a reason for denying or terminating benefits. They're not in the business of paying benefits, certainly for any length of time. They are in the business of creating reasons to deny a claim. Well, why would they want to do that? The almighty dollar and stock earnings. It comes down to profitability.
 
 Nancy Cavey [00:25:13]:
 If you don't have to pay benefits once you've collected the premium, you pocket not only the premium but the money you've made on that premium, and you don't have to pay benefits. You merely go on your way investing these ill-gotten profits to make more money for the disability carrier plan. So contrary to what the court held, if a disability carrier plan were liable for pre-suit proceedings, it would encourage them to pay claims and not create reasons by using a hired-for-lier peer review doctor, IME doctors, or their captive vocational rehabilitation counselor. Now, unfortunately, the 10th Circuit has now joined other circuits across the United States in confirming that pre-litigation work is not compensable, or, and/or in English, that the carrier plan doesn't have to pay an attorney's fee. You get the pleasure of paying for the greed of the disability carrier plans, even if the benefits were wrongfully terminated or suspended. But I recently was asked to submit an attorney fee affidavit in support of a pre-litigation attorney fee that was claimed. And it's a rare, rare situation, but the conduct of the carrier was so egregious that the court ordered not only that the carrier pay the fees due as a result of the filing of the lawsuit, but also to pay fees for the pre-litigation disputes and activities of the, of the resulting activities of the plaintiff's lawyer. That is extremely, extremely, extremely rare.
 
 Nancy Cavey [00:26:59]:
 So if you call up my office and say, well, is the carrier going to pay your fee for doing the appeal? My answer remains the same. No, this is the 1% outlier, and 99.9% of cases in which your benefits have been denied or terminated are gonna result in you being legally obligated to pay the attorney's fee. Do I like that? No, but that is the reality. As you have seen today, navigating disability claims is more than just filling out forms. It's a high-stake game of timing, notice, and legal strategy. From missed deadlines to delayed notice, due to diminished mental capacity. These cases show that understanding your rights, acting quickly, and getting professional guidance can and will make all the difference. So please stay informed, stay vigilant, and don't let the technicalities cost you the benefits you deserve.
 
 Nancy Cavey [00:27:58]:
 That's a wrap for today's episode of Winning Isn't Easy. Thanks for tuning in. If you found this episode helpful, please take a moment to like our page, Leave a review and share it with your family or friends. And we would love to hear from you. So at the beginning of each episode description, you can find a link that you can send us your questions or comments. And better yet, in addition to asking us questions, please subscribe to our podcast. Join us next week for another insightful episode of Winning Isn't Easy. Thanks.