Most insurance companies market themselves as sympathetic and compassionate, filled with people eager to extend helping hands to other people in their times of need. In reality, however, they are businesses looking to maximize their profits and satisfy their shareholders. This is not to say that insurance companies are the “bad guys.” In general, they abide by the terms of the policies they issue and provide an important service. Nevertheless, they will take advantage of every opportunity to deny claims, even if the reasons sometimes boil down to simple errors in paperwork.
When it comes to ERISA claims, the legal scales are tilted in favor of the insurance companies. Under ERISA, insurance companies and other plan administrators are given tremendous leeway in terms of the conditions they can impose on claimants, both when they file their initial claims and, if applicable, when they file their appeals. If an ERISA case is brought before the court, the judge is compelled to give deference to the decision of the insurance company.
The best way to balance the scales of justice is to secure the services of a skilled ERISA attorney such as J. Price McNamara as early in the claims process as possible. Attorney McNamara has a proven track record of success in handling ERISA cases and has demonstrated time and again that he will not be intimidated by even the largest, most powerful insurance companies.
How does ERISA favor insurance companies?
Prior to the passage of ERISA, it was possible for employees to file suit against insurance companies that denied their claims for employee-provided disability benefits. The court would have full discretion over the case, guided by state insurance laws. If a judge determined that an employee was in fact disabled according to the terms of the insurance contract, that employee would be awarded his or her benefits. Depending on the circumstances and the laws of the state in which the lawsuit was filed, employees might also be able to collect additional damages covering breach of contract, interest accrued on the unpaid benefits, the employee’s attorney’s fees, emotional distress, and even punitive damages.
By preempting state insurance laws, however, ERISA immediately limits the rights of disability claimants. The law does not allow for litigation to be brought against an insurance company until the claimant first exhausts all administrative remedies stipulated by the ERISA plan document, which may even require a second administrative appeal if the first appeal has been rejected. If the claimant, after being notified by the plan administrator that it is his or her right to sue, decides to pursue litigation, ERISA:
- Prohibits jury trials.
- Gives a single federal court judge full discretion over the case.
- Does not allow claimants to collect punitive and certain other damages, including breach of contract, insurance bad faith, emotional distress, and (with occasional exceptions) attorney’s fees.
- Prevents the introduction of evidence to the court beyond that which was considered by the plan administrator, except in cases in which the court finds that the administrator abused its discretion or acted arbitrarily.
- Disallows, in most cases, de novo review.
What is de novo review?
In rare cases, a claim denial may be reviewed de novo by a court. In such cases, the court will consider an ERISA case based solely on the evidence presented, which may include evidence not included in the original claim or subsequent appeal if deemed necessary by the court to making its decision. The court will not give deference to, or even take into consideration, the insurance company’s prior decisions.
However, ERISA cases can only be reviewed de novo if the insurance company or other plan administrator has not been given discretionary authority over claims decisions and interpretation of the plan’s provisions. Since virtually all official plan documents now establish this discretionary authority, de novo review of ERISA claims has become extremely uncommon.
Will my doctor’s ruling on my disability help to balance the scales?
While your physician’s diagnosis and opinions will certainly carry substantial weight if they are thoroughly supported and properly documented, insurance companies know that the “treating physician’s rule” will generally be rejected in ERISA cases. This rule allows the court and would compel insurance companies to give deference to the opinion of the physician that treated the claimant. Precedent for the rejection of this rule in ERISA cases was established in Black and Decker Disability Plan v. Nord, 538 U.S. 822, 123 S. Ct. 165 (2003):
Plan administrators…may not arbitrarily refuse to credit a claim’s reliable evidence, including the opinions of a treating physician. But, we hold, courts have no warrant to require administrators automatically to accord special weight to the opinions of a claimant’s physician; nor may courts impose on plan administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician’s evaluation.
In other words, your physician’s opinions will be given no more weight than the contrary evidence and testimony presented by the insurance company.
Do I realistically stand a chance against the insurance company?
Ultimately, insurance companies have little motivation to approve ERISA claims regardless of their validity. They know that they have a substantial advantage under the law and that claimants who don’t have qualified legal representation are essentially fighting with one hand tied behind their backs.
With ERISA disability attorney J. Price McNamara in your corner, however, you will have the assurance of knowing that your claim or appeal will be comprehensively researched, supported, and compiled. The insurance company will likewise know that you are not going into battle on your own – that you are represented by an experienced legal professional who will fight tirelessly and fearlessly for your rights.