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Congratulations to Mehr Fairbanks’ Partner, Elizabeth Thornsbury, on being selected to the 2024 Kentucky Rising Stars List by Super Lawyers!
Elizabeth is listed as a top rated Employee Benefits attorney in Lexington, Kentucky. Selections are determined on 12 indicators of peer recognition and professional achievement on an annual, state-by-state basis. Being named to the Rising Stars list is a prestigious distinction that only the top 2.5% of attorneys receive.
It is common for employees to obtain long-term disability coverage through their employment as an employee benefit. These policies are typically governed by a federal law called ERISA (this stands for the Employee Retirement Income Security Act). Having access to this coverage should provide comfort to employees in case the unthinkable happens: some life altering event that leaves you disabled and unable to continue working – physically or mentally. However, typically insurance policies contain language that employees aren’t often aware. For example, most disability insurance policies limit how long benefits will be paid for any conditions that the insurance company considers to be a “mental illness” or “mental health condition.” Most disability policies limit the maximum disability benefit period for mental health conditions to a maximum period of 24 months of benefits (although it is possible some policies have a shorter, or even longer, benefit period – every policy is different). Opposite of this, most policies have a much longer disability benefit period for conditions that are considered “physical” conditions (for example, most policies pay benefits to ages 65 or 67 for physical conditions).
Why is there such a disparity in how physical and mental conditions are treated by disability insurance carriers? There shouldn’t be – and other types of coverage (such as health insurance) do not have this disparity. However, action is now being taken to try and make this change for disability policies. The 2023 ERISA Advisory Council has taken a focus on this very issue this year. Their goal has been to “study the scope and impact of employee benefit plans’ limitations on disability benefits for mental health and substance use conditions.”
The ERISA Advisory Council has now urged Congress to pass legislation for mental health parity in disability policies. And, since this news, a large disability insurance carrier – Sun Life – has vocalized support for mental health parity. Sun Life, in a press release, stated:
Like many other employee benefits, ERISA disability law is designed to protect employees who have paid for or been promised these benefits through their employer. These benefits include:
The federal District Courts are beginning to adjust their views on how to best handle ERISA denial-of-benefits cases. Some courts use a modified summary judgment standard unique to ERISA denial-of-benefits cases that are based exclusively on an administrative record and the non-moving party is generally not entitled to the usual inferences in its favor (unlike the traditional summary judgment standard). In Anderson v. Liberty Lobby, Inc., the Supreme Court stated that “at the summary judgment stage the judge’s function is not himself to weigh the evidence… but to determine whether there is a genuine issue for trial.” Therefore, if material facts are in genuine dispute, then summary judgment may not be appropriate. Some courts have concluded that when fact-finding is required, or there is genuine issue related to material facts, then a bench trial is best. The 4th Circuit has held that this situation may arise when there is a necessity “to resolve competing factual contentions within the administrative record about the cause, severity, or legitimacy of an individual’s impairment.” Tekmen v. Reliance Standard Life Ins., 55 F.4th 951, 960 (4th Cir. 2022) (citation omitted).
Of note, the 6th Circuit, which is relevant Kentucky, has discussed not using summary judgment procedures or bench trials to decide ERISA actions, but instead reviewing the merits of the action based solely upon the administrative record with findings of fact and conclusions of law. It was suggested that the courts only consider evidence outside of the administrative record for limited exceptions. Wilkins v. Baptist Healthcare Sys., 150 F.3d 609, 619 (6th Cir. 1998) (Gilman, J., concurring).
For example, when insurance companies try to determine whether or not to award disability benefits, they may seek to hire their own physicians to review the medical records on file to reach a determination. This determination may or may not conflict with the medical opinions of the treating physicians. When there are conflicting opinions between the physicians hired by the insurance company and the treating physicians, however, this will likely lead to material facts in dispute. This is when a bench trial may be the most appropriate way for courts to rule on ERISA denial-of-benefits cases. Like in the example outlined below:
Disability insurance is a unique type of insurance that protects a person’s ability to earn a paycheck if that person experiences a serious injury or illness. Disability insurance is meant to provide employees with a way to receive a portion of their expected income if they later become unable to work. Disability insurance is often categorized as either short-term or long-term. The primary difference between short-term and long-term disability plans are the periods of time a person may receive benefits due to her inability to work. Short-term disability plans usually work in tandem with long-term disability plans. Generally, once short-term benefits are exhausted, then a long-term disability policy would become effective in an effort to continue providing an employee with income until she is able to return to work. Some long-term disability plans may last for the lifetime of the policyholder, most will usually provide coverage for approximately thirty-six (36) months.
Most employers provide some type of disability insurance coverage for their employees. It might be time to refresh your memory on what your employer provides you with specifically. In an unpublished opinion, the Ninth Circuit recently determined that an employer provided disability insurance company was within its rights to reduce an employee’s disability benefits by $800,000. The $800,000 came from a recent personal injury settlement the employee received on a completely unrelated matter. Haddad v. SMG Long Term Disability Plan, No. 16-CV-01700-WHO, 2021 WL 2187979 (E.D. Cal. May 28, 2021).
The case turned on the legal distinction between “offsets” and “exclusions” and “limitations” in regard to long-term disability plans. This marginal difference may be the difference between receiving the anticipated total value of long-term disability benefits or having that total value later diminished. Exclusions and limitations carve out areas from the scope of an insurance policy’s coverage. Offsets reduce the total amount owed for covered claims.
Simply put: Yes, but with limitations. It is important to speak to an attorney to know your rights and to ensure that you do not miss any deadlines related to your specific claim. To our current clients and to those seeking our services for short-term and long-term disability claims and appeals, we are still here to help you every step of the way.
On May 5, 2020, Mehr Fairbanks posted a blog that outlined how COVID-19 can impact the claims and appeals process for both our short-term and long-term disability clients. That blog post can be found here. However, since the original post, the Department of Labor has updated the guidance on the deadlines and extensions that may impact short-term and long-term disability claims and appeals under ERISA.
Because ofthe COVID-19 National Emergency, it was first announced that deadlines related to filing and appealing claims under ERISA were tolled until a certain amount of time after theNational Emergency ended. Originally, ERISA deadlines were suspended until 60 days after the end of the National Emergency. However, because of certain restrictions in the authority to extend deadlines for longer than a period of one year, the suspension of ERISA deadlines has been clarified.
Recently, a federal judge in Texas court ruled in favor of retired NFL player, Michael Cloud, determining that the administrators of The Bert Bell/Pete Rozelle NFL Player Retirement Plan (“Plan”) violated their fiduciary duties under ERISA in denying Cloud a full and fair application review. Cloud’s appeal concerned his eligibility for the highest level of disability benefits under the Plan, which was subsequently denied by the Defendants.
Cloud boasts an impressive NFL career, playing 7 seasons, including for the New England Patriots during their 2004 Super Bowl winning year. Cloud additionally played for the Kansas City Chiefs and the New York Giants between 1999 and his retirement in 2006. During his career, Cloud states that he injured “virtually every aspect of his body” as well as endured numerous cases of head trauma known as “dings” (an instance where a player’s vision goes black due to a hard hit to their head). One of Cloud’s last head injuries sustained in 2004 led to his early retirement, as the frequency and severity of the injuries had caused “cumulative mental disorders.” In 2010, Cloud began receiving benefits under the retirement Plan, and was found to be “totally and permanently” disabled in 2014. Subsequently, in 2016 Cloud applied for reclassification under the Plan but was denied both initially and on appeal.
Cloud brought an action against the Plan in 2020, alleging that his application for reclassification was never fully reviewed by the Defendants. He alleged that the Defendants (including six board members for the Plan) did not adequately review his over 1000-page application. Instead, a paralegal was made to write a summary of the application for the administrators. It has been speculated that the decision on the matter was already drafted before the administrators viewed the summary of the new appeal, as it cited to incorrect documents that belonged to the wrong benefits plan. Further, the denial letter included contradicting information with written minutes taken at the board meeting during their deliberation; the minutes state that the only reason for the denial was the Cloud did not show by clear and convincing evidence the existence of a new injury, while the letter additionally states that the application was made outside of a 180-day deadline among other timing issues. During closing arguments, counsel for Cloud stated that the issue of unfair denial is not new nor exclusive to Cloud, and that the Plan consistently failed to fully review applications by reviewing as many as 50 at a time with no discussion of the specific cases.
Recently, a federal judge in Texas court ruled in favor of retired NFL player, Michael Cloud, determining that the administrators of The Bert Bell/Pete Rozelle NFL Player Retirement Plan (“Plan”) violated their fiduciary duties under ERISA in denying Cloud a full and fair application review. Cloud’s appeal concerned his eligibility for the highest level of disability benefits under the Plan, which was subsequently denied by the Defendants.
Cloud boasts an impressive NFL career, playing 7 seasons, including for the New England Patriots during their 2004 Super Bowl winning year. Cloud additionally played for the Kansas City Chiefs and the New York Giants between 1999 and his retirement in 2006. During his career, Cloud states that he injured “virtually every aspect of his body” as well as endured numerous cases of head trauma known as “dings” (an instance where a player’s vision goes black due to a hard hit to their head). One of Cloud’s last head injuries sustained in 2004 led to his early retirement, as the frequency and severity of the injuries had caused “cumulative mental disorders.” In 2010, Cloud began receiving benefits under the retirement Plan, and was found to be “totally and permanently” disabled in 2014. Subsequently, in 2016 Cloud applied for reclassification under the Plan but was denied both initially and on appeal.
Cloud brought an action against the Plan in 2020, alleging that his application for reclassification was never fully reviewed by the Defendants. He alleged that the Defendants (including six board members for the Plan) did not adequately review his over 1000-page application. Instead, a paralegal was made to write a summary of the application for the administrators. It has been speculated that the decision on the matter was already drafted before the administrators viewed the summary of the new appeal, as it cited to incorrect documents that belonged to the wrong benefits plan. Further, the denial letter included contradicting information with written minutes taken at the board meeting during their deliberation; the minutes state that the only reason for the denial was the Cloud did not show by clear and convincing evidence the existence of a new injury, while the letter additionally states that the application was made outside of a 180-day deadline among other timing issues. During closing arguments, counsel for Cloud stated that the issue of unfair denial is not new nor exclusive to Cloud, and that the Plan consistently failed to fully review applications by reviewing as many as 50 at a time with no discussion of the specific cases.
How do I apply for long-term disability benefits?
You must follow the process and procedure outlined by your long-term disability plan. Your employer’s human resource department is required to provide you with a summary of your plan and its benefits. They may be able to help you fill out the forms.
I received a letter saying my long-term disability benefits were denied. What should I do?
Kentucky ERISA Disability & Life Insurance Claim Lawyers