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Why I Now Represent Individuals in Erisa Benefit Cases

When I first became an attorney, I worked on ERISA (Employee Retirement Security Act of 1974) involving life, health, and disability insurance from private insurers, which were usually obtained by employees under employee benefit plans through their employers. I defended the employers, plan administrators, and insurers against claims by individuals for alleged wrongfully denied benefits. Most of these claims were disability claims. I did this for about 3.5 years and then moved on to other employers until 2014 when I went back to my first firm and again handled these claims.

In late 2015, I became disabled after a surgery. I couldn’t eat anything and had to have a feeding tube in order to get nutrients, which I still have to this day. I lost 150 pounds, had patches of hair fall out, have chronic malnutrition, weakness, fatigue, and other symptoms. I became very very sick. All of my vitamins were deficient. I was at risk for many illnesses as a result. I will spare you further details, but my point is that I found myself sick with mounting medical bills, no money, no ability to pay bills, and I lost all hope; not a good combination of events.

After three months of short-term disability pay under my employer’s self-insured policy, I had to apply for long-term disability benefits through the firm’s disability insurer. I had paid a portion of the premiums for my policy and my employer had also paid premiums as a benefit on my behalf.

Like the majority of people who apply for disability, my initial claim was denied, as the insurer held that my condition was pre-existing. It was a stretch for them to make this finding, but I guess it was the only argument they had to deny my claim. I had been overweight and had surgery for being overweight and that surgery led to my condition. So therefore (as their logic went), my weight caused my inability to swallow, so they said. What kind of crap is that?! Typical insurance gamesmanship is what I’ll call it.

I received the denial letter and I was not happy. This meant no income. Zero. Zilch. I also applied for social security disability and was denied. I even applied for welfare and was denied as I had too many assets. Combine those things with a denied insurance claim and you can imagine a very stressed out, frustrated life.

I appealed the disability claim denial. I won my appeal, but it was nearly a year after I applied that I finally received benefits. I had no income while my claim was being decided and lost everything I had worked hard for – save a few things I managed to be able to work out – which has had a lasting impact on my life, but I am hopeful I am beginning the rebuilding process in terms of my health, financially, and in business (I lost my job and several clients as a result and maybe one day I will post about that too).

Now, just because my claim was finally approved, it does not mean I was sailing smoothly. The insurance company made me jump through a million hoops. I had to keep getting recertified by my doctor – almost monthly at first-, provide an abundance of personal and financial information, reapply for social security, for which an independent medical exam (IME) was required, and was subject to the insurer’s hired private investigators sitting outside my home and following me on multiple occasions. The insurance company called these folks their field reps, said they were there to help me, and required me to later meet with them and be interrogated (They wanted to meet with me in my home. They do this for a reason; to make you feel comfortable. They are observing it all. I refused to allow them in my home and met with them at a law office. You should too.). I assure you that these “field reps” were private investigators and had no interest in helping me with my claim (I did my research and they were all licensed PIs ). So, add people following you and feeling like your privacy is being violated to your other issues and on top of that perhaps your safety is at risk since people are following you, along with being sick and broke, and it is a distressing situation to say the least.

My experience with the claim angered and frustrated me. To put it lightly, I was pissed. But, I also became motivated by the injustice involved. I was clinging to my life, having a procedure under general anesthesia every two weeks, and dealing with some pretty nasty issues primarily having to do with money (or lack thereof). I realized then that money is a huge motivator for people, more than I had already realized, and what things come down to is that people don’t care about your situation. It is the almighty dollar that rules the world. I hate that about society, but I won’t get too philosophical here.

The moral to my story is that I will NEVER defend an insurance company in an employee benefits case ever again. It is against my beliefs and I will not further an agenda that I find so incredibly inhumane. Instead, I am going to represent the person who is sick and struggling as a result of a wrongfully denied insurance claim. I am going to advocate for the underdog and I’m going to do it on a contingency basis so that those who cannot afford an attorney can still get an attorney to fight their battle. I am going to be fair about my fee, structuring it so that if a case settles early I get less, with the contingency increasing as the case moves forward and my own risk increases. Having lived this experience, I know how overwhelming it can be and I do not wish my experience on anyone.

So there you have it – my reason for switching teams. I think it is fully justified and I am so ready to take these insurers on (one in particular!). If you only wanted to know my reasoning you can stop reading, but if you want to know more about how to fight the insurer, read on.

During my tenure of defending these claims, I attended in-depth conferences that included attendance and presentations by insurers instructing lawyers how to defend these claims. By also handling the cases, I became very familiar with the tactics used by insurers to deny claims and defend ERISA lawsuits. While there were certainly some cases where the claims by plaintiff employees were not justified, what I observed were that most cases involved legitimate claims and a systematic protocol for denial in reliance on a belief that the claimant would simply go away and not want to deal with or could not afford to pursue the internal administrative appeal process or a lawsuit.

Most cases involved the following procedural history: initial claim denial, denial of appeal, lawsuit filed, lawsuit settled before trial. As defense counsel, we did not normally get involved until a lawsuit was filed, but I can tell you that based on my knowledge and research on the subject, most claims are denied initially no matter what. Very few are accepted and begin payments of insurance benefits from the initial claim filing. Of the denials, a small percentage of people appeal the decision through the insurer’s administrative appeals process, which is a mandatory prerequisite to filing a lawsuit. Most people represent themselves during the administrative appeal rather than have an attorney represent them (I did not represent myself even though I’m an attorney). Some retain an attorney at that point, but that number is much less than those who do it on their own and I think that is a huge mistake. Why do I believe this? Because a large percentage of administrative appeals are denied also, especially where a lawyer is not involved, and the administrative process is relied upon heavily if a lawsuit is filed.

The insurance company sees you’re without legal counsel and knows that they have an advantage over you because of their knowledge of ERISA law (and training) and the individual’s lack thereof. You see, insurance companies have quotas to meet and risk assessment processes related to the likelihood of litigation. This is balanced with the cost of paying your benefits. If they don’t think you are serious about taking your claim beyond a certain point, or you are not using terminology common within the industry to indicate a lawsuit, the less risky a denial of your claim is to them. Claims handlers are trained to deny claims and to find any reason to do so. Although the internal appeals process is supposed to be independent and not involve the same decision makers as your initial claim, how likely do you think it is that an insurance company is going to overturn its own prior decision? This is why I think the mandatory administrative appeal process is ridiculous, by the way. But, my point is that the involvement of an attorney at the administrative appeal level is extremely important. A large percentage of claims are denied yet again on administrative appeal and once denied, then and only then, can an employee file suit.

Because life, health and disability claims fall under ERISA, which is a federal statute, claims belong in federal court. Most employees have an attorney for a lawsuit, but some do not. Suffice it to say that I do not think it is ever wise to represent yourself in any case, but especially an ERISA case. If you are at this point, get a lawyer. It is something that will pay off in the long run. Yes, we cost money but I would rather bank on getting some money with a percentage of it going to an attorney than having the stress of representing myself in federal court and risk getting no money!

A lawsuit is where most previously denied claims get paid and usually in a lump sum. Unlike most other lawsuits, ERISA life, health, and disability cases are based on the administrative record (the records from the underlying insurance company decisions, i.e. the initial decision and administrative appeal process I discussed) alone, which means there is usually no new discovery or fact finding and most cases are reviewed for an abuse of discretion rather than de novo. This means a judge is looking to see if the insurer abused its discretion in denying your claim versus starting all over with the judge making the decision. So, the insurer typically starts out with an advantage. This is why having a lawyer at the administrative level is so important. The administrative record needs to be thorough and complete. You want the error of the decision to stand out, which means you must not only submit documents in the claims process that prove your claim, but you should also have written correspondence and legal argument in support of your claim as well. You want to prove that the insurer did not follow its own policy when it denied your claim should your case go to court.

With all of this said, the majority of cases I handled settled prior to trial, as is common in these cases. If they didn’t, they were usually won or lost on summary judgment rather than trial. Settlement isn’t because the insurers are suddenly proven wrong and have a change of heart. It’s because they evaluate the cost of litigation and the risk of paying for a lawyer and losing and decide to simply get rid of the claim to cut their losses or minimize risk. They are going to see the litigation as more costly if you’ve got an attorney, and even moreso if you’ve got an aggressive attorney.

You should be aware that while I have outlined the claims and lawsuit process from a legal perspective, I would be remiss if I didn’t remind you of the fact that you are likely still sick while this is ongoing, you have little to no income, you are jumping through hoops and filling out paperwork like crazy, and you may be being watched by a private investigator. An attorney can help alleviate some of that stress by dealing with the insurer on your behalf. You can then focus on getting well or adjusting to your new life. You do not need the added stress of insurer gamesmanship on your plate. Give it to someone who knows what games insurers play and how to deal with them.

I have personally been on the individual’s side in my own disability claim and experienced the games insurers play. I’ve been on the insurer’s side as an attorney and know the tactics employed by them. I know how to beat them at their own game. I am personally motivated to aggressively advocate for you on your claim and stop the insurer from ruining your life and wrongfully denying your claim to benefits for which you paid a premium while working.

Most attorneys handle these claims on a contingency or percentage of recovery basis. Some charge 40 percent no matter at what stage you recover. Sapphire Legal takes these cases on a stepped contingency basis. If we recover on your initial claim, our contingency is 10-20 percent; on administrative appeal, 20-30 percent; and during a lawsuit 30-40 percent. We use the step basis because it parallels with the time spent on our work for you and risk we put into your case at each stage.

We provide free case evaluations. If you have a claim for denied insurance benefits, give us a call at (425) 324-3586. We will fight for the benefits you paid for and seek justice on your behalf.

The information contained in this post is not legal advice nor does it establish an attorney-client relationship. For legal advice on your particular situation you should seek the,advice of an attorney.

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