California Disability Insurance Attorneys Battle Discretionary Clauses Daily

In California, Federal Judges are often limited in their ability to reverse a denial of disability insurance benefits if a disability insurance policy is governed by ERISA. A California disability attorney must be very experienced in handling ERISA disability denials to have any chance of convincing a Judge to reverse a disability claim denial. Not every policy is governed by ERISA, but if your policy is then you must be prepared.

The first key question in every ERISA disability denial lawsuit is whether the claimant’s disability insurance policy contains a “discretionary clause.” This clause gives the insurance company the right to interpret the terms of the disability policy and make a final claim decision. If a disability policy does not contain a discretionary clause, then a court is not restricted in their review of a disability denial. But if there is a discretionary clause, then the court is limited in its analysis to an “arbitrary and capricious” review of the claim denial.

A California Court’s Review of a Claim Denial

The Ninth Circuit Court of Appeals, California’s highest federal court, explained “the arbitrary and capricious” standard of review in the case of Abatie v. Alta Health and Life Insurance Company. That case involved a dispute over life insurance benefits, but the same law applies to disability insurance claims. The plaintiff’s husband worked as a doctor for a Santa Barbara clinic from 1971 until November 1992, when he developed non-Hodgkin’s lymphoma and took a leave of absence. He never returned to work and, beginning in 1993, received permanent disability benefits. After his death in 2000, his widow filed a claim for life insurance benefits.

Alta Health and Life Insurance Company denied benefits. In its view, the policy was no longer in force when the plaintiff’s husband died. The case turned on whether the doctor had to continue to pay policy premiums even though he was on disability at the time. Under the language of his policy, his coverage ended when his employment ended unless he became totally disabled and the insurance company granted him what was called a waiver of premium.

Alta Health initially denied coverage because it asserted the doctor had not filed a request for the waiver of premium. However, the doctor had in fact filed the request but the insurance agent had not initially sent it to Alta Health. When the doctor’s widow filed suit, Alta Health added another reason for its denial: the doctor was not entitled to a waiver of premium because he was not totally disabled. It claimed for the first time that the doctor had to pay premiums because his non-Hodgkin’s lymphoma went into partial remission in the two years before his death. In the insurance company’s view, he wasn’t totally disabled and had to pay the premium to keep the policy in force and, in turn, be entitled to life insurance benefits.

The California Court’s Basis For Overruling the Insurance Company Denial

The Ninth Circuit Court of Appeals found that Alta Health had improperly denied coverage. The court’s decision was based on a number of factors including:

Even though the policy contained a discretionary clause and gave Alta Health the right to make some decisions, the Ninth Circuit Court of Appeals determined that the decision to deny coverage could not stand. The court said these “procedural irregularities” showed that the denial of coverage was arbitrary and capricious, which resulted in a victory for the claimant.

Abatie v. Alta Health and Life Insurance Company, 458 F.3d 955 (9th Cir. 2006) (en banc)

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Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

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Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

Dell & Schaefer Client Reviews   *****

Janet

I worked with Rachel Alters, who was very knowledgable about ERISA, my health condition and the best way to present information to my private LTD company. Being disabled, I am always tired, have little energy and have trouble concentrating, remembering things, etc. Rachel always maintained professionalism, would repeat the process if necessary and made things as easy on me as possible. She always made herself available if I requested a teleconference and her assistant was always prompt about returning my calls and providing information I requested.

In a professional setting, I’ve worked with attorneys for years and had to review and sign contracts. I know from personal experience that a contract is only as good as the people who stand behind it. I put my trust in Rachel and she delivered. We were able to get my LTD company’s denial decision reversed and I was put back on plan after she threatened to sue when they initially upheld their original decision to deny my claim. Having backpayment and being put back on plan definitely helps with my financial stress and I know it has taken its toll on my health.

I hope now that I have some financial security, I can focus more on getting better and do so more quickly. There is no doubt that I couldn’t have done this without Rachel. She guided me through the whole process, making sure that appropriate things were documented, we received the right information from the right medical professionals, had tests performed when needed, etc. It was a pleasure working with her and her team.

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