Aug 20, 2008

Frequently Asked Questions

Below are some initial questions many clients have when they first contact Brian S. King. The questions below may address many initial concerns you may have. If you don't find the answers here, you should contact us for answers to questions specific to your firm. The consultation is free.

Disability and Life Insurance Claims

  • Q: I have been awarded Social Security disability benefits. But the insurer of my disability policy has denied my claim. Can the insurer do that?

    A: Yes. Unfortunately, this happens regularly. Qualifying for Social Security doesn't mean an insurer for a group or individual policy is required to pay your personal claim. Meeting Social Security standards for proving permanent disability is not easy. But the definition for "disability" insurers require you to satisfy is usually different from the definition of permanent disability Social Security Administration uses.
  • Q: I already have a lawyer working on my social security disability claim. Can't that lawyer handle my disability insurance claim too?

    A: Perhaps. Ask the lawyer. However, you should know that most Social Security claimants representatives are not experienced or interested in pursuing disability claims that are provided by private insurers. While there are some similarities between the two areas, there are significant differences between Social Security disability claims and disability insurance claims.
  • Q: What issues do you see in life insurance claims?

    A: Interesting ones. Sometimes there is a question about whether a person's death was "accidental" as defined by the policy. Sometimes there is a dispute about whether a person's insurance was in effect at the time of death. Sometimes there are concerns about whether the appropriate amount of premium was paid. Sometimes there are issues about whether the insurer has received the premium. There are many others.

Medical Claims

  • Q: Why is it important for hospitals and patients to work together when an insurance company denies or reduces a legitimate claim for healthcare?

    A: When an insurance company wrongly denies a medical claim, the effect is to shift the cost of that treatment to either the healthcare provider or the patient or both. The best way to challenge the denial is for the provider and the patient to work together in coordinating their arguments and information as to why the claim should be paid. For various reasons, it isn't always possible for the hospital or doctor to work with the patient. But the best results usually occur when the provider and the patient work together rather than separately to challenge insurance denials.

General

  • Q: What is ERISA?

    A: The Employee Retirement Income Security Act of 1974, or ERISA, was designed to protect the pension and welfare benefits of most American workers. The Firm focuses its work on representing individuals whose medical, disability and life insurance benefits have been improperly denied. If you have health, disability or life insurance through your work, and you don't work for the government or a church, ERISA governs your rights. Since most of these insurance benefits are provided through group insurance policies sponsored by private employers, ERISA usually comes into play. Getting these improperly denied claims paid is a real challenge that requires the help of an attorney experienced in dealing with insurance and medical issues as well as a lawyer who understands the complexities of ERISA.
  • Q: How does ERISA protect my rights?

    A: It outlines what information your employer must give you about your medical, disability and life insurance benefits. It also sets up fiduciary duty requirements. Persons or entities that have any discretionary authority over your benefits or whether your claim is valid are fiduciaries under ERISA. They have strict obligations to carry out their duties with complete loyalty to you, as a prudent person acting in like circumstance would do and in compliance with the documents that govern the plan. Finally, ERISA requires employers or their agents to provide you with a full and fair review when you appeal a denied claim.
  • Q: Does ERISA do a good job of protecting consumers?

    A: No. You have the right to sue if you feel the insurer's denial was wrong. But often the court will reverse the denial from the insurer or payor of benefits only if that denial was "arbitrary and capricious." Basically this requires you to show that the insurer was completely unreasonable, a difficult burden of proof for claimants to carry. Insurers know this and they are likely to be more aggressive about denying ERISA claims than they are when they receive claims that are not governed by ERISA.

    In addition, while ERISA gives participants the right to sue to recover benefits that have been wrongfully denied and for recovery of losses to a group of employees if a fiduciary's breach of duty causes loss to the group, it doesn't allow for recovery of any "consequential" damages that result from the wrongful denial. For example, if a disability insurer improperly denies your benefits for several months and your car is repossessed or you lose your home, you can't recover anything to compensate you for the loss you suffer as a direct consequence of the insurer's wrongful denial. The best you can do is to recover your disability benefits.

    In addition, you can't recover punitive damages under the statute. There is very little in ERISA to deter an insurer from taking a hard line in dealing with employees and their family members. From the insurance company perspective, the worst thing that is likely to happen is that they will be ordered to pay the benefits they should have paid in the beginning. In the meantime, the insurer has been able to earn interest and investment income on the money you should have received months or years before.

    There is little question that, as a practical matter, consumers of health, disability and life insurance have fewer rights under ERISA than they had before that statute was passed in 1974.
  • Q: What is an ERISA Summary Plan Description?

    A: A Summary Plan Description (SPD) is the document employers must provide employees when a benefit plan is set up. It outlines the terms of the ERISA plan or insurance policy that provides you benefits. It must fairly disclose all the coverage, exclusion and limitation provisions of the ERISA plan.

    Usually the SPD is the policy the health, disability or life insurer prepares and distributes. But sometimes an ERISA plan is "self-funded." This means the employer pays the benefits out of its own assets. In that case the SPD may be the employee handbook that outlines your benefits.
  • Q: When should I get a lawyer involved to help me?

    A: There is no hard and fast answer. Insurance claims can sometimes be quite straightforward and are paid with little dispute. Generally speaking, there is no need to get an attorney involved before a claim is denied by the insurer. But once a claim is denied, it is very important to have experienced legal counsel involved as soon as possible. There are often short time frames involved for appealling denied claims. And if you don't present arguments or evidence in the appeal process BEFORE litigation begins, you will probably not be able to present them in court. Don't delay in getting competent legal help!
  • Q: How long does it take for a claim to be resolved?

    A: It's difficult to say. Some claims are resolved in weeks or even days, before litigation begins. Some claims take years. It's best to be prepared for a long fight.