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I previously blogged about the 10th Circuit’s decision in Murphy v. DeLoite & Touche and the permissible scope of discovery in claims governed by the Employee Retirement Income Security Act (“ERISA”). (Click here for prior post.) Although many of our local judges in the federal court in Colorado previously allowed at least some discovery sought on behalf of our clients, the gate has clearly been pushed further open. More recently, this office received favorable orders in Erickson v. Lincoln National and Bottoms v. Liberty Life. The decision issued by Magistrate Judge Shaffer in the Bottoms case has been published by Westlaw at 2011WL6181423.
In this case, Liberty Life argued that Plaintiff was not entitled to conduct discovery. Plaintiff’s discovery request sought information concerning the insurance company’s conflict of interest in rendering ERISA claim decisions, information concerning bias of the reviewing physicians retained by Liberty Life to perform a paper review of Plaintiff’s medical records, the incentive pay plans of Liberty Life employees who rendered the claim decision, and related information. Ultimately, the judge concluded Plaintiff was entitled to obtain much of this information from the insurance company.
Finally, after years of pushing this Issue, which required extensive briefing and attendance at numerous hearings, our clients’ rights to seek discovery under our federal rules of civil procedure on behalf of our clients is becoming more and more clear. Such discovery “battles” should be far less contentious in the future. Disability insurance carriers (such as Unum, Hartford, MetLife, Liberty Life, CIGNA, Sun Life, Prudential, Standard, and the others) will be required to produce information which should have always been readily available to Plaintiffs whose benefits have been denied under this biased and tainted method employed by disability carriers in rendering decisions. Judge Shaffer made it clear at the hearing and in his written decision that the days of insurance companies opposing all forms of discovery in these types of cases are over.
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Every employer-provided long term disability policy I have reviewed in the past ten years contains some sort of limitation on conditions for which disability benefits can be granted or the duration of those benefits. The most common type of limitation seen in a long term disability policy relates to “mental disorders,” “substance abuse,” and a general provision typically referred to as “other limiting conditions.” The payment of LTD benefits is often limited to 24 months for the lifetime of a claimant’s disability if it is caused or contributed to by any of these conditions.
Over the years, the “other limiting conditions” provisions we have seen have grown ever more inclusive. We suspect that employers buying these group policies from the various insurers are quite unaware of the nature of these limiting provisions and the reality that many types of disabling illnesses are not actually covered or are seriously limited. A particularly onerous provision recently found in a policy issued by Standard Insurance includes the following:
Other Limiting Conditions means chronic fatigue conditions (such as chronic fatigue syndrome, chronic fatigue immunodeficiency syndrome, post-viral syndrome, limbic encephalopathy, Epstein-bar virus infection, herpes virus type 6 infection, or other myalgic encephalomyelitis), any allergy or sensitivity to chemicals or the environment (such as environmental allergies, sick building syndrome, multiple chemical sensitivity syndrome, or chronic toxic encephalopathy), chronic pain conditions (such as fibromyalgia, reflex sympathetic dystrophy, or myofacial pain), carpal tunnel or repetitive motion syndrome, temporalmandibular joint disorder, crainomandibular joint disorder, arthritis, diseases or disorders of the cervical, thoracic, or lumbosacral back and its surrounding soft tissue, and sprains or strains of joints or muscles.
Are you kidding me!? Why doesn’t the insurance policy just say “we will pay you a monthly benefit for your disability, but you should be aware that we don’t actually cover most disabling disabilities or conditions.”
The employer who purchased this policy on behalf of its employees should have paid better attention to the product it was buying. This particular limiting provision would rule out the payment of benefits beyond 24 months for perhaps 30-40% of the individuals who contact our office suffering from a disabling illness, condition, or disease. This particular employer likely had no idea this type of provision had been included in its policy. Claimants seeking disability benefits under a group policy have a difficult enough time actually receiving those benefits given the protections afforded to employers (not employees as intended) and insurance companies by the Employee Retirement Income Security Act (“ERISA”). Such onerous provisions make it that much more difficult. Frankly, such a policy rises to the level of being illusory – meaning the policy promises a benefit that really isn’t there.
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As mentioned elsewhere on this website and in our various blogs, Unum Life Insurance Company assumed the role as the Disability Program Administrator for the Colorado Public Employees Retirement Association’s (PERA) Disability Program. Unum became the administrator on January 1, 2011. If a PERA Member submitted a claim for disability prior to the end of 2010, but the claim decision was not rendered until 2011, then Standard Insurance Company decided the short term disability (STD) claim while Unum was charged with the responsibility of determining potential entitlement to “disability retirement.” Our office has assisted many PERA Members through this claim process. We were recently informed by the Unum claims representative that another one of our client’s claim for disability retirement benefits was successful. As a result, our client is now deemed entitled to disability retiree benefits to be paid by PERA based upon 50% of her “Highest Average Salary.”
Please feel free to contact our office if you require assistance with your Colorado PERA disability retirement claim or have received a denial of benefits from either Standard Insurance Company or Unum for which you most likely need to file an internal appeal with either company. Click here if you would like to read more about the Colorado PERA Disability Retirement Program.
Signed, Shawn McDermott
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As a reader of this blog site, you are likely aware of the class action lawsuit filed by the Law Office of Shawn E. McDermott against Standard Insurance Company and the Colorado Public Employee Retirement Association (PERA). This case is pending in Denver District Court. The basis of the lawsuit is our firm conviction that the PERA Rule 7.45(E) and the PERA short term disability policy issued by Standard Insurance for the benefit of all PERA members does not comply with the law. See my previous blog posts for a more detailed description of this lawsuit by clicking here.
As counsel for Plaintiff in the class action lawsuit filed by our client, Tracey Lawless, we have filed a motion to certify the case as a class action under Rule 23. The issue is now fully briefed and awaiting the court’s decision. Perhaps more importantly, we have also filed our dispositive motion and extensive legal brief asking Judge Hood to agree with our position that the “second prong” of the short term disability (STD) definition found in the policy must beremoved as it is not supported by and is entirely inconsistent with the PERA statute defining when a PERA member is entitled to STD payments. As of earlier this week, the dispositive motions filed by all parties are also now fully briefed. We simply await the Judge’s determination.
As a reminder to all who may be affected, if you believe your case fits within this proposed class or if you have any other questions regarding your Colorado PERA disability retirement claim or denial, you can always contact the disability insurance lawyers at our office for an initial, free consultation.
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We recently learned that Standard Insurance Company has agreed with the position we took on behalf of a client whose claim for long term disability benefits had been denied. Our client’s claim was somewhat unique in that she had been receiving long term disability benefits for several years due to her chronic cardiac condition and related medical issues including a diagnosis of bi-polar disorder. Hoping that she had regained some stamina and because she was frustrated with living too simplified of a life, basically staying at home, our client wanted to attempt a return to employment. Wisely, before doing so, she spoke with the claims representative at Standard Insurance who ensured her that she had a 180-day window within which to attempt to return to work and that if she was unable to do so, her disability benefits would recommence, a.k.a a recurrent disability claim. Relying on this representation our client returned to work for a couple of months and quickly realized her medical condition did not allow her to do so. In contacting her claims representative after the return-to-work failed, she was shocked to learn that the reinstatement of disability benefits would not occur, because she had not returned to her former employer for the trial return to work period. (more…)
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Our disability clients are often surprised to hear that their life insurance coverage may continue in full force and effect even if they are disabled and cant work. Most individuals have coverage in the event of disability or death through benefits or policies of insurance provided by their employer. If so, such claims are likely governed by ERISA (Employee Retirement Income Security Act). Most group life insurance policies contain what is often called a “waiver of premium” provision which provides that the life insurance protection continues without having to pay a premium (more…)
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On Monday, March 7, 2011, our office filed a class action lawsuit against The Standard Insurance Company and Colorado Public Employees Retirement Act (PERA). The basis of this class action lawsuit is discussed in several prior blogs on this website. You may want to review our prior blog from August 26, 2010 as well as our blog on January 19, 2011. Click here for a link to our website further describing PERA disability benefits.
The amended complaint in Lawless v. Standard and PERA, pending in the Denver District Court, seeks certification of a class whose members are defined as those PERA members whose claim for short term disability benefits have been denied (more…)
The Texas Department of Insurance has adopted a new rule prohibiting discretionary clauses in disability insurance policies. Texas now joins the growing list of a number of states which have undertaken similar action. The ban applies to group life and disability policies and is similar to Colorado’s ban on discretionary clauses as found in C.R.S. § 10-3-1116. For a brief description of Colorado’s ban on discretionary clauses, see our prior blog post by clicking here. (more…)
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The disability insurance attorneys at the Law Office of Shawn E. McDermott prevailed in a recent ERISA appeal filed on behalf of their client when Life Insurance Company of North America (LINA), a subsidiary of CIGNA, wrongfully terminated his long term disability benefits.
In the claim against LINA, Mr B was originally rendered disabled by bladder cancer which had gone into remission. However, at the time of the termination of long term disability benefits, he began suffering from (more…)
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The disability insurance lawyers at the Law Office of Shawn E. McDermott prevailed in a recent ERISA appeal filed on behalf of their client when Hartford Life & Accident Insurance Company wrongfully terminated her long term disability benefits.
In the claim against Hartford Life & Accident Insurance Company Ms. H suffered from the following conditions: (more…)