I get asked this question all the time, “Why do most claims die in the court system? Why is it so difficult to win your claim in the court system?” Well, to answer that question, I really need to back up and provide a bit of a framework for how the ERISA disability, long-term disability, claims process works. As you know, the first step is that your doctors need to tell you that you’re disabled. And once your doctors say that you’re disabled and they say, “On this day you are no longer capable of working,” now, you have to file a claim or give notice to your employer and to their insurer within a certain number of days. It could be 20, 30 days depending on what the policy says, and you need to give them notice of your disability.
What Happens After You Provide a Notice?
After about 180 days or 90 days, depending on what the policy says, we call that the elimination period. During that period, hopefully, you have short-term disability. But after that period is over, you’ve generally got between 60 to 90 days to file your claim for long-term disability benefits. Now, most people don’t wait until the very end of that disability benefit. Because what are you doing during that time? You can’t work. There’s no income because your short-term disability has run out. Now presumably, you’ve already applied for your long-term disability claim prior to your short-term disability running out. And just because you’re approved for short-term disability does not mean that you’re going to get long-term disability.
“Denied!” Now What?
So now that you’ve applied for your long-term disability claim, the insurance company rubber stamps it “Denied”. What do you do now? Now, you have to exhaust your administrative remedies, which means that you have to appeal the claim within the insurance company. So under the Employee Retirement Income Security Act, ERISA, they have to have an internal process for you to appeal their decision, their adverse decision denying you long-term disability benefits. When you do that, you have an obligation to provide all the supporting documents and all the supporting information that will help prove your claim. If you don’t provide all the supporting information and supporting documentation that will support your claim, then the insurance company will, again, deny your claim. So after that, your only option in most cases is to file suit in a federal district court. Now, federal courts and state courts are different.
Every state has its own court system, and the federal courts have their own court system too. Because ERISA is a federal statute, and these cases go straight into federal court. If you file it in state court, it’s going to get popped up to federal court in a heartbeat and there’s nothing you can do about it. The case will, 99.9% of the time, be heard in a federal court. So when you get to federal court, what happens next? Well, the employer or your insurer will file a motion to seal the administrative claim file. The administrative claim file will then be sent to their federal judge and the plaintiff, you, the claimant, and your employer or the insurance company will file what are called motions for summary judgment.
The Brief and What Happens Next
Attached to the motion for summary judgment will be a brief that goes through everything that is important out of the administrative file, and will point out what the arguments for your long-term disability are and what they are not. Now, the difficulty at this stage, if you hire a lawyer just for the litigation is that you cannot present additional evidence. You don’t get the opportunity to take the stand and to testify. You can’t submit additional affidavits. You can’t submit additional information from your doctor. Everything that the judge will review is based on the information that you submitted to the insurance company. So if you didn’t have a lawyer with you at the insurance company, the likelihood is, you probably don’t have everything that you need in the claim to file when you get to court. Now, the good thing is the insurance company typically doesn’t have an attorney at that stage either, but these people are trained to deny your claim.
No Fairness Involved …. Why?
So they know what to look for. They know what to do. They know what to go out and get to deny your claim. And they’re banking on the fact that most people will not file a lawsuit. So sometimes, what they’ll do is they’ll deny your appeal hoping that you’ll never go get an attorney and you’ll never file suit. And I bet you anything, if there’s a bunch of people that do that… I don’t have any statistics on how often that happens, but I would not be surprised if at least half of the people just go away after they deny your appeal. The other half will go find an attorney and file suit. So the difficulty though is that as your attorney, I’m not allowed to go to court and argue anything that you didn’t argue inside the insurance company’s internal appeal process. I’m not allowed to present any other evidence to the court to support your claim.
That doesn’t sound fair, but that is the way the system is created. So when people ask me, why do most cases die in the court system, it’s because of this very reason. There’s not enough work done on the front end to make sure that the insurance company looks ridiculous for denying your claim. That’s the goal. You have to make the insurance company look ridiculous for denying your claim. Otherwise, the judge is going to say they acted reasonably. In my opinion, even though I may disagree with their conclusion, their decision was based on a reasonable thought-out process that arrived at this conclusion, and that their conclusion is reasonable based on their analysis.
So a lot of times, what you see is that there’s simply a lack of information in the claim file for the judge to reverse the decision of the insurance company. I hope this has been helpful to you. If you like what you heard or if this was helpful, please be sure to share this blog with your friends and family and other people who may need the information. If you have any other questions about the court system or the process, please give us a call or send us an email. We’re happy to help.