Houston long term disability lawyer Marc Whitehead, Board Certified Disability Insurance Attorney, discusses how Long Term Disability Insurance Companies make it difficult in court.
Long Term Disability Insurance Claims can be difficult to effectively litigate in the Federal Courts in Texas. One of the difficulties to claimants to overcome is the restrictive discovery rules that have evolved from the common law governing the Employee Retirement Income Securities Act or whats known as ERISA.
ERISA applies to most disability insurance claims. Discovery refers to the abilities of the parties in the litigation to request information from the other side. Such as in the form of written questions or oral depositions of individuals. Disability Insurance Companies effectively use ERISA as a shield to deny claims. Insurance companies such as UNUM, Cigna, Metlife, the Hartford and Aethna typically use ERISA common law as a shield and take the position that they don’t have to comply with the disabled claimants discovery requests. The goal of the insurance company is to prevent the claimant into investigating whether the claim was fairly handled under the rules.
In the fifth circuit court of appeals they relied on a court opinion in Vega vs. National Life Insurance Services to argue that the only admissible and therefore discoverable evidence in an ERISA action was-
first- the administrative record
second- evidence involving the interpretation of the plan
third- evidence explaining medical terms and procedures
This interpretation is greatly hindered the efforts of long term disability insurance claimants to investigate and prove abuse by the insurance companies.
However, this unfair rule has been changed for the better recently because of two recent cases. The US Supreme Court recognized in Metropolitan Life vs. Glen that when a plan administrator both evaluates claims for benefits and pays the benefit claims it creates a structural conflict of interest. The level of conflict is a factor in determining the court standard of review. Therefore a claimant is entitled to some level of discovery on the issue of insurance companies own conflict of interest. Also the fifth circuit court of appeals in Crosby vs. Louisiana Health has recently held that discovery is permissible on the extent an existence of a conflict of interest. Further discovery is permissible regarding the completeness of the administrative record and if whether the plan administrator complied with ERISA procedural rules.
In using the words existence and extent of a conflict of interest a plaintiff can argue that the inadmissible conflict of interest of the administrative employees, agents, and consultants are discoverable as well.
The moral of the story is that the courts are starting to wake up to the fact that insurance companies are trying to hide the ball in disability claims and this is a good thing for a disabled claimant.
