In newer life insurance, disability insurance, and health insurance polices (less than 2 years old) insurers attempt to avoid paying claims by performing what is known as "post claim underwriting." When you purchase a health, disability or life policy, you fill out an application that asks questions about you and your family's health, give the insurer a medical authorization, and sometimes undergo a medical exam. Instead of using the authorization to get the applicant's medical history before wrting the policy, the insurance company waits until a claim is made. At that time, they obtain your medical records to determine if your statements on the application for insurance was 100% absolutely accurate. If not, then the insurance company rescinds (retroactively cancels) the policy, refunds your premiums, and denies your claim.
On the surface, it sounds reasonable for an insurance company to rescind a policy where the insured obtained the policy through material misrepresentations. But, the insurance company's applications are full of run-on sentences, ambiguities, and traps for the applicant, who is filling out a form that asks for detailed medical information going back 10 years or more while the agent is telling you "we only need the important stuff."
A policy holder's honest mistake, inadvertent errors, and other inconsistencies about his medical history in the application should not be a basis to deny claims. Particularly, where the inconsistencies are apparent on the face of the application but the insurer does not investigate the flaws until after a claim is made.
Blue Cross of California has taken a positive step in avoiding the inequities of post claim underwriting in their health insurance policies. Blue Cross has agreed, pursuant to the settlement of a class action lawsuit, to rescind policies only where there is a finding of a willful misrepresentation in the application. Blue Cross has also agreed to use a new application form designed to minimize mistakes.
Hopefully, this is a step that all insurers will take or the legislature will require insurance companies to take in the future. For more information about improper insurance claim denials see our web site at StennettCasino.com.
Tuesday, June 19, 2007
Tuesday, May 8, 2007
What is an Administrative Appeal?
You have applied for benefits under an employee benefit plan and you have received a letter from the insurance company or plan administrator informing you that your application for benefits is denied. Whether you are applying for disability, life, health or other benefits the letter advises you that you have a right to an administrative appeal or review of your claim. This article is about that process - what is an administrative appeal or administrative review; what are your rights and obligations; and generally how should you approach this process.
The administrative appeal/review is your opportunity to convince the insurer/administrator that you are entitled to benefits without having to file a lawsuit. Most people's knee-jerk reaction when they receive the denial letter is to immediately request an appeal, sending a letter to the insurance company telling them how wrong its determination was, that they truly are disabled, and that their doctor has already advised them of that fact. As you will see below, this is the wrong approach to take.
You have certain rights and obligations under the employee benefit plan and the laws regulating these plans. You have a right to a "full and fair review" of your claim by the claims administrator. Part of the entitlement to a full and fair review includes the right to examine all documents relied upon or reviewed by the plan in denying your benefits and an opportunity to respond to those documents. Thus, your first step is to obtain those documents. Write to the adjuster and request a copy of the entire administrative file (claims file). The file contains all the communications and internal memos on your claim, the insurance carrier's physicians, vocational consultants, nurses and others' opinions and reports regarding your claim, not to mention all of your medical records. These documents must be provided to you within 30 days at no cost to you. Once you receive this file, then you will know what the claims administrator does and does not have which becomes important when it comes to deciding what additional documents should be submitted to the claims administrator.
In addition to the administrative file you should also obtain a copy of the Plan itself, which may be in the form of an insurance policy, a summary plan description (SPD), or an employee handbook. These documents define the specific contractual obligations of the Plan and its participants. Thus if you are looking for the definition of "disability" or "pre-existing condition" it will be in the Plan.
Another aspect to your entitlement to a "full and fair review" is the obligation by the Plan to tell you (1) the specific reasons for the denial; (2) reference the plan provisions on which the denial is based; (3) a description of any additional material or information necessary for you to perfect your claim, and an explanation of why such material or information is necessary; and (4) the steps you need to take in order to submit your claim for appeal or review. Thus, if you look at your denial letter closely you will discover the Administrator's reasons for denying your claim and what additional information you need to present in order to get your claim approved.
Typically, you are given 180 days from the receipt of the denial letter in which to submit an administrative appeal. There is no rush in submitting the appeal. You should take advantage of this opportunity to fully document your claim. If you are unsuccessful in the appeal process, then your only option is filing suit against the Plan. The court in reviewing your case is generally limited to reviewing the evidence contained in the administrative file. If your evidence was not put into the file during the administrative process the court will generally not consider it.
What you should submit differs depending on the facts of your claim. This is the point in your claim where I highly recommend that you contact an attorney experienced in handling ERISA or employee benefit claims to at least discuss your options. If your claim is denied after the appeal process is concluded then your only option thereafter is litigation. If you have not contacted an attorney before you have exhausted your administrative remedies you are at a tremendous disadvantage.
If you would like to discuss your particular claim with an attorney with expertise in employee benefit plans, visit our website at stennettcasino.com. To see examples of cases that began with a denial and ended with a judgment for the beneficiary, please see our "Successes" page.
The administrative appeal/review is your opportunity to convince the insurer/administrator that you are entitled to benefits without having to file a lawsuit. Most people's knee-jerk reaction when they receive the denial letter is to immediately request an appeal, sending a letter to the insurance company telling them how wrong its determination was, that they truly are disabled, and that their doctor has already advised them of that fact. As you will see below, this is the wrong approach to take.
You have certain rights and obligations under the employee benefit plan and the laws regulating these plans. You have a right to a "full and fair review" of your claim by the claims administrator. Part of the entitlement to a full and fair review includes the right to examine all documents relied upon or reviewed by the plan in denying your benefits and an opportunity to respond to those documents. Thus, your first step is to obtain those documents. Write to the adjuster and request a copy of the entire administrative file (claims file). The file contains all the communications and internal memos on your claim, the insurance carrier's physicians, vocational consultants, nurses and others' opinions and reports regarding your claim, not to mention all of your medical records. These documents must be provided to you within 30 days at no cost to you. Once you receive this file, then you will know what the claims administrator does and does not have which becomes important when it comes to deciding what additional documents should be submitted to the claims administrator.
In addition to the administrative file you should also obtain a copy of the Plan itself, which may be in the form of an insurance policy, a summary plan description (SPD), or an employee handbook. These documents define the specific contractual obligations of the Plan and its participants. Thus if you are looking for the definition of "disability" or "pre-existing condition" it will be in the Plan.
Another aspect to your entitlement to a "full and fair review" is the obligation by the Plan to tell you (1) the specific reasons for the denial; (2) reference the plan provisions on which the denial is based; (3) a description of any additional material or information necessary for you to perfect your claim, and an explanation of why such material or information is necessary; and (4) the steps you need to take in order to submit your claim for appeal or review. Thus, if you look at your denial letter closely you will discover the Administrator's reasons for denying your claim and what additional information you need to present in order to get your claim approved.
Typically, you are given 180 days from the receipt of the denial letter in which to submit an administrative appeal. There is no rush in submitting the appeal. You should take advantage of this opportunity to fully document your claim. If you are unsuccessful in the appeal process, then your only option is filing suit against the Plan. The court in reviewing your case is generally limited to reviewing the evidence contained in the administrative file. If your evidence was not put into the file during the administrative process the court will generally not consider it.
What you should submit differs depending on the facts of your claim. This is the point in your claim where I highly recommend that you contact an attorney experienced in handling ERISA or employee benefit claims to at least discuss your options. If your claim is denied after the appeal process is concluded then your only option thereafter is litigation. If you have not contacted an attorney before you have exhausted your administrative remedies you are at a tremendous disadvantage.
If you would like to discuss your particular claim with an attorney with expertise in employee benefit plans, visit our website at stennettcasino.com. To see examples of cases that began with a denial and ended with a judgment for the beneficiary, please see our "Successes" page.
Thursday, April 12, 2007
HOW MUCH HOMEOWNERS INSURANCE SHOULD I HAVE?
With all of the recent publicity regarding insurance companies denying or limiting claim payouts on homeowners’ policies, many people are asking how they can protect themselves from being a victim of their own insurance company at a time when they most need the protection.
Here are a few thoughts on how to make sure you at least have adequate insurance. When you purchase insurance coverage for your home it is your intent to cover yourself for;
1) the cost of rebuilding your home,
2) the cost to replace your personal possessions within your home, and
3) the cost of having to live elsewhere while your home is being rebuilt.
First, decide how much it will cost to rebuild your home. This is not the price you paid for your home nor is it the amount of your mortgage. If you are unsure of how to determine this amount ask your agent since he has more expertise in this area. Give him the exact square footage of the residence, the specific location of the residence, the type of construction, whether the house is a custom home and any other unusual features of your home. Once your agent has this information, have the agent determine the cost per square foot to rebuild your home. In order to determine the amount of dwelling coverage you should carry just multiply the square footage by the cost per square foot. Always confirm in writing what figures the agent quoted you so that if the question of adequate coverage or co-insurance becomes an issue you are protected since you relied upon the agent’s expertise. However, beware that insurance agents typically under estimate the cost of rebuilding your home. Agents want to sell you insurance and to do so they believe they need to keep the premiums as low as possible which means keeping the coverage low.
In addition to determining how much coverage you need you must decide what kind of insurance to buy. A homeowners policy protects you against numerous perils, such as fire, windstorm, theft, etc. A fire policy is limited to protection only against fire. There are various types of homeowners policies and each type needs to be explored with your agent. Remember, policies that insure you for anything less than replacement cost will not cover the cost of rebuilding your home.
With regard to the amount of coverage you should carry for the personal possessions in your home, a typical homeowner policy will calculate that amount based upon a percentage of the dwelling coverage. Policies will vary as to whether the personal property coverage will be replacement cost or actual cash value (which applies depreciation). Immediately after you take out your policy and for every year thereafter, videotape the contents of your home (open drawers and videotape what is in them). When you have a loss, insurance companies will require you to file a proof of loss in which you will have to make a list of your personal property. A video recording will not only help you remember what was in your home but it will also prove to an insurance company that you had the item and the specifics of the item. Remember most homeowners' policies have a limit on items such as furs, jewelry, silverware, etc. If you want full coverage for those items ask your agent about a floater policy.
If you have a loss and are displaced from your home the additional living expense coverage on your policy will reimburse you for hotel bills, restaurant meals and other items that are over and above what you would have spent if you were living in your home. Additional living expense coverage is limited in your policy to a set maximum amount and limited in the time you are covered. Thus if you have 12 months of coverage and it takes 18 months to rebuild your house you will not have coverage for the last 6 months. Know your coverages and plan accordingly.
For more information on Homeowners Insurance and what you need to do when you have a loss see our insurance law website.
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Here are a few thoughts on how to make sure you at least have adequate insurance. When you purchase insurance coverage for your home it is your intent to cover yourself for;
1) the cost of rebuilding your home,
2) the cost to replace your personal possessions within your home, and
3) the cost of having to live elsewhere while your home is being rebuilt.
First, decide how much it will cost to rebuild your home. This is not the price you paid for your home nor is it the amount of your mortgage. If you are unsure of how to determine this amount ask your agent since he has more expertise in this area. Give him the exact square footage of the residence, the specific location of the residence, the type of construction, whether the house is a custom home and any other unusual features of your home. Once your agent has this information, have the agent determine the cost per square foot to rebuild your home. In order to determine the amount of dwelling coverage you should carry just multiply the square footage by the cost per square foot. Always confirm in writing what figures the agent quoted you so that if the question of adequate coverage or co-insurance becomes an issue you are protected since you relied upon the agent’s expertise. However, beware that insurance agents typically under estimate the cost of rebuilding your home. Agents want to sell you insurance and to do so they believe they need to keep the premiums as low as possible which means keeping the coverage low.
In addition to determining how much coverage you need you must decide what kind of insurance to buy. A homeowners policy protects you against numerous perils, such as fire, windstorm, theft, etc. A fire policy is limited to protection only against fire. There are various types of homeowners policies and each type needs to be explored with your agent. Remember, policies that insure you for anything less than replacement cost will not cover the cost of rebuilding your home.
With regard to the amount of coverage you should carry for the personal possessions in your home, a typical homeowner policy will calculate that amount based upon a percentage of the dwelling coverage. Policies will vary as to whether the personal property coverage will be replacement cost or actual cash value (which applies depreciation). Immediately after you take out your policy and for every year thereafter, videotape the contents of your home (open drawers and videotape what is in them). When you have a loss, insurance companies will require you to file a proof of loss in which you will have to make a list of your personal property. A video recording will not only help you remember what was in your home but it will also prove to an insurance company that you had the item and the specifics of the item. Remember most homeowners' policies have a limit on items such as furs, jewelry, silverware, etc. If you want full coverage for those items ask your agent about a floater policy.
If you have a loss and are displaced from your home the additional living expense coverage on your policy will reimburse you for hotel bills, restaurant meals and other items that are over and above what you would have spent if you were living in your home. Additional living expense coverage is limited in your policy to a set maximum amount and limited in the time you are covered. Thus if you have 12 months of coverage and it takes 18 months to rebuild your house you will not have coverage for the last 6 months. Know your coverages and plan accordingly.
For more information on Homeowners Insurance and what you need to do when you have a loss see our insurance law website.
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Tuesday, April 10, 2007
What Is ERISA
In 1974, Congress passed a law that regulates your employee benefits. Known as ERISA (the Employment Retirement Income Security Act) this law covers your retirement, disability, health, life and other employment-related benefits. It details the responsibilities of your employer regarding your employee benefit plan, and it outlines the steps you can take if you believe your rights are being violated. ERISA is a Federal law. State laws will not apply since they are preempted by ERISA. However, if you are employed by a governmental entity then ERISA does not govern your employment benefits. (State laws of insurance "bad faith" may then apply).
ERISA has a two-step claims procedure. You first must file a claim, with proof that you qualify for benefits, with the Plan's Administrator. Typically, your employer will provide you with the claim forms. Most disability, life and health Plans are underwritten by an insurance company. (Unum, Prudential, Met Life, Hartford, etc.). In these cases your claim will be reviewed by the insurance company (referred to as the Claim Administrator). Both the Plan Administrator (employer) and the Claim Administrator (insurer) have a fiduciary responsibility "to act solely in the interest of the [Plan] participants and beneficiaries." However it may be fatal to your claim to assume that the Administrator will assist you in proving your claim. You are responsible for proving your own claim.
If the Plan denies your claim, you have the right to an administrative appeal. The Claim Administrator will review your claim a second time. You have a right to obtain a copy of the administrator's file. Get it! This file will tell you what they have reviewed and what their own internal consultants (medical reviewers, vocational analysts, surveillance video) are saying about your claim.
The appeal process is a critical point in your claim. A time when you should at least talk to an attorney with expertise in ERISA. The reason being that if your appeal is also denied your remaining remedy is to file suit in Federal court. ERISA limits your rights in court. You have no right to a jury and virtually no right to perform discovery. Thus all of your discovery needs to be done during the administrative appeal process. When the judge reviews your case he will be limited to reviewing what is in the administrative file. You can not hold back the "good stuff" for trial. If it was not presented during the administrative review then the judge will not consider it. There are many things that can be done to bolster your claim. See the article, "Excuses...", for ideas.
There are usually deadlines both for submitting your claim and filing your appeal, although it may be possible to obtain a deadline extension. Make sure you comply with these deadlines.
It is highly recommended in these technical ERISA cases that you speak to an ERISA attorney early in your case. If you retain an attorney make sure he/she has specialized knowledge in ERISA and insurance company practices. An attorney can help you to fully document your claim by gathering all the documents, seek out additional experts or specialists, interview witnesses and compile legal and factual support for your claim. If you want to obtain more information about ERISA or wish to email or talk to an expert about your claim visit our web site at stennettcasino.com
ERISA has a two-step claims procedure. You first must file a claim, with proof that you qualify for benefits, with the Plan's Administrator. Typically, your employer will provide you with the claim forms. Most disability, life and health Plans are underwritten by an insurance company. (Unum, Prudential, Met Life, Hartford, etc.). In these cases your claim will be reviewed by the insurance company (referred to as the Claim Administrator). Both the Plan Administrator (employer) and the Claim Administrator (insurer) have a fiduciary responsibility "to act solely in the interest of the [Plan] participants and beneficiaries." However it may be fatal to your claim to assume that the Administrator will assist you in proving your claim. You are responsible for proving your own claim.
If the Plan denies your claim, you have the right to an administrative appeal. The Claim Administrator will review your claim a second time. You have a right to obtain a copy of the administrator's file. Get it! This file will tell you what they have reviewed and what their own internal consultants (medical reviewers, vocational analysts, surveillance video) are saying about your claim.
The appeal process is a critical point in your claim. A time when you should at least talk to an attorney with expertise in ERISA. The reason being that if your appeal is also denied your remaining remedy is to file suit in Federal court. ERISA limits your rights in court. You have no right to a jury and virtually no right to perform discovery. Thus all of your discovery needs to be done during the administrative appeal process. When the judge reviews your case he will be limited to reviewing what is in the administrative file. You can not hold back the "good stuff" for trial. If it was not presented during the administrative review then the judge will not consider it. There are many things that can be done to bolster your claim. See the article, "Excuses...", for ideas.
There are usually deadlines both for submitting your claim and filing your appeal, although it may be possible to obtain a deadline extension. Make sure you comply with these deadlines.
It is highly recommended in these technical ERISA cases that you speak to an ERISA attorney early in your case. If you retain an attorney make sure he/she has specialized knowledge in ERISA and insurance company practices. An attorney can help you to fully document your claim by gathering all the documents, seek out additional experts or specialists, interview witnesses and compile legal and factual support for your claim. If you want to obtain more information about ERISA or wish to email or talk to an expert about your claim visit our web site at stennettcasino.com
Sunday, April 8, 2007
Accidental Death Benefits Denied Because Insured Was Drinking and Driving
An accidental death insurance policy will pay benefits when the insured dies as a result of an accident. But when the insured dies in an auto accident with a high blood alcohol rate is that an accident? Metropolitan Life Insurance Company recently denied a widow life insurance benefits when her husband died in a single car accident while driving home from his brother's house. Met Life claimed that since decedent had been drinking beer before driving that the accident was not an accident under the law.
Met life interpreted "accident" to mean "not reasonably foreseeable." Met Life claimed that it was reasonably foreseeable that one would become involved in a serious accident when combining drinking with driving. Thus since the accident was reasonably foreseeable it was not an accident under the law. Met Life cited court decisions from Illinois (Cozzie v. Metropolitan Life, 140 F.3d 1104 (7th Cir. 1998)) and Wisconsin (Weatherall v. ReliaStar Life Insurance 398 F.Supp.2d 918 (W.D.Wis. 2005)) to support its position.
Fortunately, the auto accident occurred in California. In California, the courts recognize that accident insurance is purchased to protect insureds from their own miscalculations, misjudgements and careless conduct. Thus, California courts interpret the term accident to include accidents where the insured did not perceive the resulting death or injury to be a "substantially certain result of his conduct." (Padfield v. AIG Life, 290 F.3d 1121 (9th Cir. 2002)). The widow retained the law firm of StennettCasino who are attorneys experienced in handling life insurance and accidental death benefit claims. They pointed out the difference between Illinois and California law, and presented Department of Transportation statistics that illustrated that there is a less than 1% correlation between drinking and highway deaths. Since most drivers do not believe that combining drinking with driving is "substantially certain" to result in death then (at least in California) a resulting accident is an accident.
The widow in this case prevailed once the law was persuasively pointed out to Met Life. The accidental death benefits were paid. For more information visit our insurance law web site at StennettCasino.com.
Met life interpreted "accident" to mean "not reasonably foreseeable." Met Life claimed that it was reasonably foreseeable that one would become involved in a serious accident when combining drinking with driving. Thus since the accident was reasonably foreseeable it was not an accident under the law. Met Life cited court decisions from Illinois (Cozzie v. Metropolitan Life, 140 F.3d 1104 (7th Cir. 1998)) and Wisconsin (Weatherall v. ReliaStar Life Insurance 398 F.Supp.2d 918 (W.D.Wis. 2005)) to support its position.
Fortunately, the auto accident occurred in California. In California, the courts recognize that accident insurance is purchased to protect insureds from their own miscalculations, misjudgements and careless conduct. Thus, California courts interpret the term accident to include accidents where the insured did not perceive the resulting death or injury to be a "substantially certain result of his conduct." (Padfield v. AIG Life, 290 F.3d 1121 (9th Cir. 2002)). The widow retained the law firm of StennettCasino who are attorneys experienced in handling life insurance and accidental death benefit claims. They pointed out the difference between Illinois and California law, and presented Department of Transportation statistics that illustrated that there is a less than 1% correlation between drinking and highway deaths. Since most drivers do not believe that combining drinking with driving is "substantially certain" to result in death then (at least in California) a resulting accident is an accident.
The widow in this case prevailed once the law was persuasively pointed out to Met Life. The accidental death benefits were paid. For more information visit our insurance law web site at StennettCasino.com.
Excuses Used By Insurance to Deny Disability Claims
Every denial of disability benefits includes the language "your medical records do not support a claim for disability as defined in the Plan." What does that mean and what can you do about it? Plenty. First you must understand that there are two issues presented in that often used excuse to deny benefits. The definition of disability in the Plan and your medical records. (The issues are the same in an ERISA Plan, Governmental Plan and Individual Plan).
How is "disability" defined in your Plan? You must read it to know. For example is it "the inability to perform the material duties of your own occupation" or "the inability to perform the material duties of any occupation"? If it is "your own occupation" then get a copy of the job description from your employer. If it is incorrect or incomplete then tell the Plan. Once the job duties are defined then determine how your illness/injury prevents you from performing those duties. If your job requires you to sit at a computer terminal 7 hours a day and you can only sit 2 hours a day then make sure your medical records reflect that fact.
How do you control what is in your medical records? The doctor performs the examination orders the diagnostic tests and makes the diagnosis. But the diagnosis alone does not necessarily define what your limitations are in a work setting. One person with a bulging disc may not even know he has a problem while another with the same diagnosis may be totally disabled. Each person is unique and each person reacts differently. To determine how an injury/illness affects you the doctor has to rely on what you tell him.
Do not just tell the doctor that your back hurts and you cannot work. Tell the doctor that your job requires you to sit at a computer 7 hours a day and you can only sit for 30 minutes before the pain gets so bad that you need to lay down for 20 minutes to lessen the pain. Every time you see the doctor and he asks "how are you doing" give him something interesting to write in the medical record so that it supports your inability to perform the material duties of your occupation. Tell him that you really want to return to work but at work you have to get on your knees all the time and you cannot do that yet. Tell him it bothers you that you cannot invite friends over for dinner because you cannot sit at the dinner table long enough to be social. Tell the doctor how your injury/illness affects your life. Let the medical record support your disability
There are many other methods to fully document your disability as well as many other excuses insurers like Unum, Prudential, Hartford, Met Life, Reliance Standard and others use to deny disability claims. Please visit our insurance disability web site at StennettCasino.com for additional information or to contact a disability attorney who can answer your questions whether you are dealing with an ERISA disability plan or a private disability plan.
How is "disability" defined in your Plan? You must read it to know. For example is it "the inability to perform the material duties of your own occupation" or "the inability to perform the material duties of any occupation"? If it is "your own occupation" then get a copy of the job description from your employer. If it is incorrect or incomplete then tell the Plan. Once the job duties are defined then determine how your illness/injury prevents you from performing those duties. If your job requires you to sit at a computer terminal 7 hours a day and you can only sit 2 hours a day then make sure your medical records reflect that fact.
How do you control what is in your medical records? The doctor performs the examination orders the diagnostic tests and makes the diagnosis. But the diagnosis alone does not necessarily define what your limitations are in a work setting. One person with a bulging disc may not even know he has a problem while another with the same diagnosis may be totally disabled. Each person is unique and each person reacts differently. To determine how an injury/illness affects you the doctor has to rely on what you tell him.
Do not just tell the doctor that your back hurts and you cannot work. Tell the doctor that your job requires you to sit at a computer 7 hours a day and you can only sit for 30 minutes before the pain gets so bad that you need to lay down for 20 minutes to lessen the pain. Every time you see the doctor and he asks "how are you doing" give him something interesting to write in the medical record so that it supports your inability to perform the material duties of your occupation. Tell him that you really want to return to work but at work you have to get on your knees all the time and you cannot do that yet. Tell him it bothers you that you cannot invite friends over for dinner because you cannot sit at the dinner table long enough to be social. Tell the doctor how your injury/illness affects your life. Let the medical record support your disability
There are many other methods to fully document your disability as well as many other excuses insurers like Unum, Prudential, Hartford, Met Life, Reliance Standard and others use to deny disability claims. Please visit our insurance disability web site at StennettCasino.com for additional information or to contact a disability attorney who can answer your questions whether you are dealing with an ERISA disability plan or a private disability plan.
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