Midgett v. Washington Group Intern. Long-term Disability Plan Finding
In this case, the Court found ERISA requires claimants to exhaust the appeals process with the insurance company because it minimizes "the number of frivolous ERISA lawsuits." The Court also found that the exhaustion requirement encourages ERISA plans to treat benefit claims consistently. It establishes "a nonadversarial dispute resolution process," and reduces the time expenditure and costs associated with settling claims.
He found that the records failed to support Blackwell's inability to continue work as a vice president of quality management. He recommended that the claims handler order an IME and a functional capacity evaluation (FCE) to guarantee a full and fair review of Blackwell's claim.
Once upon a time, if a lawyer emerged victorious in a settlement, a client could be told exactly what the victory would net him/her after fees, costs, and liens. A clear distinction existed between those liens that had to be paid back and those that didn't. Some government liens were statutorily required to be paid back, while all other private liens were prohibited. Enter ERISA.
When you do bring up your claim, make sure your physician understands the correct definitions of disability under your policy. What your doctor considers "disabled" may be different than the definition of "disabled" according to your insurance policy.
However, courts have extensively broadened the parameters of ERISA to include even individual policies if insurance premiums are paid by the business. Although courts have not been entirely consistent, there are rulings holding that disability claims brought by business partners or even sole shareholder organizations purchasing individual insurance coverage for the owner of the business are covered by ERISA. Thus, it is critical for professionals to determine at the time they apply for an insurance policy whether they are more interested in tax savings (by purchasing benefits through the business) or in significantly expanded coverage (by making sure the policy is not covered by ERISA).
Even if a professional has paid his or her disability insurance premiums through the practice, it may still be possible to escape ERISA if the professional can meet all of the requirements of ERISA's "safe harbor" provision. This provision excludes from ERISA employee benefit plans for which (1) no contributions are made by the employer, (2) participation in the program is completely voluntary for employees, (3) the sole role of the employer is to permit the insurer to publicize the program to the employees, to collect premiums through payroll deductions, and to remit them to the insurer, and (4) the employer receives no consideration from the program other than reasonable compensation for its administrative services in connection with the payroll deductions.
Moving for summary judgment is not enough to get a fair judgment - courts can issue summary judgments without awarding pre-judgment interest. Without pre-judgment interest, the plaintiff will receive an award that is less than the value of the benefits that were denied to him or her, as adjudged by the Court. So, it is vital that the disability attorney make a request for pre-judgment interest as part of the lawsuit.
There are a few reasons why a business would choose this type of plan over others, but the main factor is usually cost. It costs less to manage a self-insured policy than it does to enter fully into a contract with a larger provider.
If you are covered by a self-insured health plan, make sure that you read your SPD from cover to cover, know who your plan administrator is, and ask questions when necessary. Remember that you are largely responsible for knowing how your health insurance coverage works.
In this case, the Court found ERISA requires claimants to exhaust the appeals process with the insurance company because it minimizes "the number of frivolous ERISA lawsuits." The Court also found that the exhaustion requirement encourages ERISA plans to treat benefit claims consistently. It establishes "a nonadversarial dispute resolution process," and reduces the time expenditure and costs associated with settling claims.
He found that the records failed to support Blackwell's inability to continue work as a vice president of quality management. He recommended that the claims handler order an IME and a functional capacity evaluation (FCE) to guarantee a full and fair review of Blackwell's claim.
Once upon a time, if a lawyer emerged victorious in a settlement, a client could be told exactly what the victory would net him/her after fees, costs, and liens. A clear distinction existed between those liens that had to be paid back and those that didn't. Some government liens were statutorily required to be paid back, while all other private liens were prohibited. Enter ERISA.
When you do bring up your claim, make sure your physician understands the correct definitions of disability under your policy. What your doctor considers "disabled" may be different than the definition of "disabled" according to your insurance policy.
However, courts have extensively broadened the parameters of ERISA to include even individual policies if insurance premiums are paid by the business. Although courts have not been entirely consistent, there are rulings holding that disability claims brought by business partners or even sole shareholder organizations purchasing individual insurance coverage for the owner of the business are covered by ERISA. Thus, it is critical for professionals to determine at the time they apply for an insurance policy whether they are more interested in tax savings (by purchasing benefits through the business) or in significantly expanded coverage (by making sure the policy is not covered by ERISA).
Even if a professional has paid his or her disability insurance premiums through the practice, it may still be possible to escape ERISA if the professional can meet all of the requirements of ERISA's "safe harbor" provision. This provision excludes from ERISA employee benefit plans for which (1) no contributions are made by the employer, (2) participation in the program is completely voluntary for employees, (3) the sole role of the employer is to permit the insurer to publicize the program to the employees, to collect premiums through payroll deductions, and to remit them to the insurer, and (4) the employer receives no consideration from the program other than reasonable compensation for its administrative services in connection with the payroll deductions.
Moving for summary judgment is not enough to get a fair judgment - courts can issue summary judgments without awarding pre-judgment interest. Without pre-judgment interest, the plaintiff will receive an award that is less than the value of the benefits that were denied to him or her, as adjudged by the Court. So, it is vital that the disability attorney make a request for pre-judgment interest as part of the lawsuit.
There are a few reasons why a business would choose this type of plan over others, but the main factor is usually cost. It costs less to manage a self-insured policy than it does to enter fully into a contract with a larger provider.
If you are covered by a self-insured health plan, make sure that you read your SPD from cover to cover, know who your plan administrator is, and ask questions when necessary. Remember that you are largely responsible for knowing how your health insurance coverage works.
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