Aug 20 2013

Court Decides Liberty’s Denial of Waiver of Life Insurance Premium Did Not Meet “Full and Fair Review” Standard Under ERISA


Court Decides Liberty’s Denial of Waiver of Life Insurance Premium

Did Not Meet “Full and Fair Review” Standard Under ERISA


Under ERISA, one of the rights you have as a part of your disability benefits claim is the right to a “full and fair review” by the insurance company.  In providing a “full and fair review” the insurance company cannot cut corners or rely on generalizations to evaluate your claim.  Instead, the insurance company has to look at you, as a person, and consider your illness and conditions and how they affect your ability to work.

This issue was recently litigated by our office in Terry Lewis v. Liberty Life Assurance Co. of Boston, U.S. District Court, WDKY, Civil Action No. 3:12-cv-00215-H.  Our client Terry Lewis had been denied Waiver of Premium benefit for a life insurance policy.  For many workers, a life insurance policy is one of the largest assets they have to pass on to their family.  For some people this can be as important as their claim for long-term disability benefits.

In the Lewis case, we won our client’s long-term disability benefits appeal.  While her long-term disability benefits were reinstated, she was denied waiver of premium benefits.  The reason for the different evaluations of her claim was that her long-term disability benefits were based upon an inability to do her own job, and the waiver of premium benefits were based on an inability to do any job.

We asked the Court to reverse the insurance company’s decision to deny the waiver of premium benefits because the insurance company, Liberty, did not provide a “full and fair review” of the claim.

In our case, the medical evidence showed that our client had several significant medical conditions.  These included diabetes, degenerative disc disease and arthritis, among others.  These conditions affected her ability to work, and not only to walk, stand, lift and carry, but to show up to work regularly, and to stay on task while at work.

Liberty was presented with evidence on appeal from our client’s doctor, stating that he had personally examined Ms. Lewis, had treated her for years, and that the combination of her conditions was so severe that she could not work. Liberty ignored his opinion.

Instead, Liberty hired MES Solutions, Inc., a third-party vendor, to find a physician to review the file and provide another opinion.  That physician, Dr. Greg Marella, agreed that Ms. Lewis had all of these conditions, but decided that her symptoms were not severe enough because “millions of people” have diabetes or chronic pain and are able to work.  Although Liberty had the right to have Ms. Lewis examined to see how severe her symptoms were, it decided not to have such an exam performed.

As we argued to the Court, Liberty’s actions were not a “full and fair review” under Section 503 of ERISA,  which requires plans to set up procedures to provide a full and fair review of denied benefit claims.  Liberty agreed that our client Ms. Lewis had all of the conditions which would render her disabled, but decided that her symptoms were not severe enough to disable her, based on the physician’s generalizations.

While an insurance company can, in some situations, rely on a physician’s paper review of your medical records, it can be inappropriate for the insurance company to rely on a paper review of your file when the question is really how severe your symptoms are, and whether the statements you make regarding your symptoms are credible.

The Judge agreed that Liberty had not provided a “full and fair review” of our client’s claim.  As the Judge noted, the report from Liberty’s doctor implied that our client Terry Lewis was either faking her illness, or being outright deceitful about her conditions.  The Court noted that it could not “single out objective medical evidence on which Liberty relies in its denial of benefits that does not involve some material element of a credibility determination.”

The Court concluded that Liberty’s review was not a “full and fair review.”  While the Court did not reinstate the benefit, it sent the case back for an investigation that complied with ERISA.  While we believe the Court should have reinstated the benefit, we were pleased that the Court recognized that our client’s rights were violated and that this wrong needed to be addressed.

A claim for ERISA benefits, whether long-term disability benefits or waiver of premium benefits, can present a lot of questions:

  • How does my policy define disability?
  • Do I have to be disabled from my job OR any job?
  • Did a doctor review my file and, if he did, what did he do?
  • Did the insurance company provide a “full and fair review” of my claim, or should they have done something different?

These can be very difficult questions. At McDonald & McDonald we work with you to find the answers.  We help individuals who have been denied long-term disability benefits, and other benefits provided under ERISA.  We work with people to appeal the denials of their benefit claims and to litigate claims when their administrative appeals have been exhausted.

As in Terry Lewis’ case, it is most beneficial if we get involved in preparing your appeal when your claim for benefits is first denied.  By having an attorney included early on, you have a better opportunity to present quality evidence for your appeal, and to lay the groundwork for future litigation, if necessary.

Contact us today toll-free at 877-428-9806 to discuss how we can help you obtain a “full and fair review” of your long-term disability benefits or waiver of premium claim.

Jun 24 2013




Congress needs to fix resulting unfair outcomes under ERISA subrogation claims


(Yes, the tail finally does wag the dog!)



On April 16, 2013, the United States Supreme Court issued its long awaited decision in the case of U.S. Airways v. McCutchen,  (No. 11-1285).  The case involved a subrogation issue under a group health plan governed by ERISA, following a car accident where Mr. McCutchen was seriously injured by another driver..


Mr. McCutchen was an employee of U.S. Airways and was a participant in the U.S. Airways health insurance benefit plan.  In January 2007, Mr. McCutchen was injured in a car accident and the U.S. Airways plan paid $66,866.00 in medical expenses for Mr. McCutchen’s injuries from the accident.  The person who caused the accident only had $10,000.00 of insurance coverage.  Mr. McCutchen turned to his own insurer for help and was able to receive $100,000.00 in underinsured motorist coverage.  Therefore, Mr. McCutchen received a total of $110,000.00.  Mr. McCutchen’s attorney charged him $44,000.00 for legal fees, which left $66,000.00 for Mr. McCutchen.


U.S. Airways brought suit against Mr. McCutchen under Section 502(a)(3) of the ERISA (Employee Retirement Income Security Act of 1974) statute and said that it was entitled to the $66,000.00 that Mr. McCutchen had in his possession.


Mr. McCutchen asserted certain defenses against the U.S. Airway claim to his money, including defenses centered around unjust enrichment and common fund arguments.  McCutchen’s arguments were designed to make the court aware that, after attorney’s fees,  he would be giving his entire recovery to U.S. Airways, therefore U.S. Airways should have to share equally in paying the cost of his attorney fees.


In a decision which follows the court’s precedents in Mertens and Sereboff, the Court found that the agreement U.S. Airways had with Mr. McCutchen trumped the type of equitable defenses that he was raising against U.S. Airways’ claim to his tort recovery.


The Court did take time to reassert the strength of its recent decision in Cigna v. Amara, which goes right to the core of ERISA.  ERISA’s principal function is to “protect contractually defined benefits.”  Additionally, the Court noted that the ERISA statutory scheme is “built upon reliance on the face of the written plan documents.”  They further noted, “the plan, in short, is at the center of ERISA.”


The bottom line is: McCutchen was forced to turn over the money he received from the auto insurers for his damages, to the Group Health Benefit Plan which paid for his medical expenses.  Essentially Mr. McCutchen would be left with almost nothing after paying the Group Health Plan and his legal expenses.


The outcome of the case was largely predictable.  After Sereboff, it is clear that the Court was willing to enforce the terms of the plan and after Amara, it is clear that the Court is interested in the plan, the whole plan, and nothing but the plan.


While much will be written about this case, the problems that it generates are not entirely legal problems.  After having handled many tort cases over the years, I have seen people whose lives have been destroyed from the negligence of other people on the highways and roadways of our country.  When an individual experiences extreme personal injury from the negligence of another, that individual will likely require an extreme amount of medical care that may go on for an extended period of time.  Frequently, injured individuals have spouses, children, and other dependents.  The Supreme Court’s decision does little to provide solace to the family of the individual who has been seriously injured.

I doubt that when Mr. McCutchen signed on to the U.S. Airways health plan that he knew that he would be giving up all of his rights of compensation to his employer.  Perhaps it wouldn’t be such a bad result if a defendant who had an unlimited supply of money or insurance had injured Mr. McCutchen.


We all know that most accidents generate situations where only a limited amount of insurance coverage is available.  It seems bizarre that Mr. McCutchen’s tort rights were consumed by his participation in the health plan.  I doubt that Mr. McCutchen or anyone who participates in a group health plan could ever see or predict such a bizarre outcome that leaves the McCutchen family with nearly nothing after being harmed by a tortfeasor who was underinsured.


In a strange twist, it is as if Mr. McCutchen was reinsuring the health benefit plan by purchasing his underinsured motorist coverage.  Maybe U.S. Airways should be required to reimburse the McCutchens for all the underinsured premiums they paid for UIM/Underinsured Motorists coverage.


The McCutchen decision actually protects plans but imposes a tremendous burden on taxpayers.  Although U.S. Airways was within its rights to generate plan language that gave itself maximum recoveries against plan beneficiaries, the individuals who will ultimately bear the cost associated with the future care of Mr. McCutchen are the United States taxpayers.  In any effort to diminish or restrict the rights of the seriously injured in a tort case, the taxpayers are always left to   bear the responsibility of caring for the seriously injured individual.  People like Mr. McCutchen eventually lose their jobs because of a loss of physical capacity, and therefore will likely be off the health plan.  Mr. McCutchen and others in similar situations will then either go on to a Medicaid program or a Medicare program after obtaining Social Security disability.


Either way, the McCutchen family suffers, U.S. Airways gets it money back and the taxpayer bears the burden of Mr. McCutchen’s care.  The Supreme Court did not do anything wrong in the case.  ERISA is a statute that is not focused on fairness.  The court’s hands were tied.  This is where Congress must step in.  ERISA reform is needed.  It is not only needed in subrogation issues, like the one present in McCutchen, but also in terms of the limited remedies that plan participants have.


If you have any questions or concerns about U.S. Airways v. McCutchen or what it means, please do not hesitate to contact me.  I welcome your questions on this interesting and difficult set of circumstances that are generated by this decision.


Joe McDonald, Esq.

Feb 27 2013

McDonald & McDonald – Long Term Disability Appeals in Ohio and 8 Nearby States

Long Term Disability Appeals in Ohio and 8 Nearby States

            At McDonald & McDonald, we practice ERISA / long-term disability law in several states throughout the Midwest, Mid-Atlantic, & the South.  Our clients have come from a variety of locations and cities.

Our law firm is headquartered in Centerville, Ohio, but we travel where the need arises to represent our clients in long-term disability appeals in United States District Courts throughout Ohio and 8 nearby states.  Our past clients have come from locations such as:

Map of the geographic boundaries of the variou...

Map of the various United States Courts of Appeals and United States District Courts. (Photo credit: Wikipedia)



New Richmond, Goshen, Springfield, Miamisburg, Fairborn, Sidney, Springboro, Waynesville, Dayton, Carlisle, Kettering, West Milton, Batavia, Jamestown, Oakwood, Delaware, Toledo, Middletown, Lebanon, West Chester, Centerville, Xenia, Arcanum, Camden, Brookville, Tipp City, Huber Heights, Laura, Monroe, Mt. Vernon, Lancaster, Lakewood, Yellow Springs, Pickerington, Moraine, Hamilton, Cincinnati, Barnesville, Dover, Fremont, Lima, Englewood, Cleveland, Bellefontaine, Beavercreek, Chillicothe, Akron, Greenville




Aurora, Rolling Meadows, Chicago, Richton Park, Waterloo, Collinsville, Napierville, Oak Park, Plainfield, Crystal Lake, Lisle, Mounds, Alton



Zeeland, Farmington Hills, Grand Rapids, Traverse City



West Harrison, Paoli, Jasper, Albany, Lafayette, Hammond, Indianapolis, Martinsville



Palmer Township, Harrisburg, Exton, Philadelphia, West Chester, Erie, Northeast, Lancaster, Derry, East Greenville, Jonestown, Scranton, Hallem, Levittown, Canonsburg, Allentown, Pittsburgh, McMurray



Rogers, Elizabethtown, Morgantown, Cold Spring, London, Burlington, Lexington, Sebree, Louisville, Big Creek



Green Bay, Lake Geneva, Linden, Madison, Silver Cliff, Merrillan


St. Louis



Nashville, Knoxville


We are proud of the work we do for our clients in the Third Circuit, Sixth Circuit, Seventh Circuit, & The U.S. District Court for the Eastern District of Missouri in St. Louis.  If you have been denied benefits under a long-term disability plan and your case has merit, we are prepared to come to you.

Contact us today for a free consultation and case evaluation, and let’s talk about what we can do for you.

Feb 5 2013

Reinstating your Long Term Disability Benefit: The ERISA 502(a) LAWSUIT

Most individuals become familiar with the phrase 502(a) lawsuit by receiving a letter from an insurance company denying access to their long-term disability benefits.

The traditional language often used by long-term disability insurers advises clients that they have “exhausted their administrative remedies”, and now have the ability to file a lawsuit under Section 502(a) of the Employee Retirement Income Security Act, otherwise known as ERISA.  The 502(a) lawsuit is one that often confuses clients because many individuals think that a lawsuit must end in a trial or hearing.  In fact, the 502(a) lawsuit does not allow for a jury trial or even a hearing in a federal court where testimony is taken.

The traditional format for 502(a) cases, involves the Judge’s review of the “administrative record” to determine whether the insurance company’s behavior was arbitrary.

The 502(a) lawsuit usually ends with the attorneys filing Motions based upon the administrative record, which contains arguments in favor of, or against, the conclusion that an individual is disabled.  The “administrative record” is a phrase that is used to represent all of the activity and data that was supplied by both the insurance company and the claimant during their appeal.  It is based upon that information (and no other) that the court makes an informed decision as to whether the insurance company behaved arbitrarily (or disregarded the claimant’s evidence).

There are only a few ERISA 502 Litigation Attorneys & law firms that are equipped to move forward on a 502(a) lawsuit.  In each state, you may only find a handful of attorneys or law firms that focus on this unique area of the law as a substantial part of their practice.

As I have said in previous blog posts, the most important feature in long-term disability prosecution is doing a very thorough and well-documented appeal.  Not everyone has the luxury of finding a lawyer to help them do the appeal, so some people try to do the appeal on their own.

Although I do not discourage people from trying, I have seen far too many cases where people attempted to do their own appeal, or hired a neighborhood lawyer with no ERISA litigation experience, resulting in a terrible outcome.

If you have received a letter that says that your administrative remedies are exhausted and you are entitled to file a 502(a) lawsuit, you should have your case evaluated by an Attorney who will take the time to go through the administrative record and determine whether or not there is a reasonable argument to be made in favor of the reinstatement of your benefits.

Occasionally, Insurers will engage in settlement discussions or participate in mediation to resolve long-term disability cases after a 502(a) suit has been filed.  Only by hiring a qualified and diligent lawyer who is familiar with ERISA, can you improve your chances of engaging in settlement dialogue with a long-term disability insurer.

At McDonald & McDonald, we successfully litigate, mediate, and settle long-term disability cases for our clients every day.  We welcome your phone call and the opportunity to evaluate your case, regardless of whether we were involved in the previous administrative appeal.

If your administrative remedies have been exhausted & you need to file a 502(a) lawsuit, please contact us as soon as possible to discuss how we can help you.

Sep 21 2012

Long Term Disability – Defining “your job” vs. “your occupation”

Long Term Disability Insurance – “your job” vs. “your occupation” – understand the difference:


English: A collection of pictograms. Three of ...

            Frequently, long-term disability contracts provide us with definitions for disabling conditions.  These definitions embrace the idea that your illness or disability affects your ability to perform “your job.”  Occasionally, policies also refer to “your occupation.”  These terms do not mean the same thing.  In many cases we see long-term disability insurers relying upon “your occupation” more than your particular job when they analyze your disability claim.

The term “occupation” embraces how the job is performed in the general economy.  Jobs may be similar from company to company, but how that work is performed specifically can vary from employer to employer.

This summer, we had the opportunity to litigate the issue of The Hartford’s policy language as it relates to “your occupation.”  After completing the briefing, the United States District Court for the Southern District of Ohio found that the Hartford’s limited manner in which it analyzed our client’s “occupation” was arbitrary and capricious.  Specifically, the Court noted that by focusing on 60% of our client’s job, the Hartford failed to embrace the physical requirements that would be required for the remaining 40% of the time that she spent at work.

This is an interesting decision and it demonstrates one of the features of long-term disability work that happens quite frequently.  Insurers sometimes will take a case in “thin slices”, instead of evaluating its entirety. This frequently will lead to results that are not appropriate.

We are grateful that the District Court ruled in favor of our client.  See  Decision and Order – Calhoun