Do I Have to File an ERISA Appeal of a Disability Insurance Denial Before I Can File a Lawsuit?
A recent D.C. Court ruling in an ERISA long term disability denial lawsuit sparks the question: If a claim for disability insurance benefits has been denied, is the claimant required to file an ERISA appeal with the insurance company, or can the claimant bypass the appeal process and, upon denial, move forward and file a civil lawsuit under ERISA? The general answer is that in almost every case a claimant must file an ERISA appeal, but in this blog entry we will discuss some legal exceptions that could allow a lawsuit to be field with the filing of an administrative Appeal.
In the D.C. case, the Plaintiff argued that he was not required to exhaust his available administrative remedies because: 1) ERISA does not mandate exhaustion and that this requirement should be determined by the individual courts on a case-by-case basis; 2) the denial notice he received did not mention any claims procedure or appeal process, thereby excusing him from pursuing administrative remedy; and 3) pursuing administrative remedy would have been futile and that he had already attempted to resolve this matter in house before filing his lawsuit. The D.C. court found that none of the Plaintiff’s arguments were sufficient to waive the strict exhaustion requirement.
Exhaustion Requirement Under ERISA in Disability Insurance Denial Cases
The ERISA law itself does not specifically state whether a claimant is required to exhaust all available administrative remedies before filing a civil lawsuit. However, there is a long settled rule of judicial administration which mandates that no one is entitled to judicial relief for an alleged injury until such time as the prescribed administrative remedy has been exhausted. This means that because ERISA does not specifically address this issue, the exhaustion requirement will automatically be applied to all cases, except for instances where the district court, through its own sound judicial discretion, determines that the exhaustion requirement does not apply, or should be waived, for a particular case.
This leads us into the question: under what circumstances will a court determine that the ERISA exhaustion requirement does not apply, or should be waived?
Exception # 1: Lack of Meaningful Access to Higher Levels of Review
The first circumstance when the exhaustion requirement may be waived is if a claimant lacks, or is denied, meaningful access to higher levels of review. In the D.C. case, the Plaintiff tried to argue that the denial notice he received did not specifically mention the insurance company’s appeal process or claims procedure. Without being informed of the appeal process or the claims procedure, he was therefore denied access to higher levels of review of the denial of his claim for benefits. However, the Plaintiff’s argument failed because he did not claim that no claims procedure existed, but rather, the notice did not mention it. The courts have well-established that ignorance of a claim procedure does not waive the exhaustion requirement and that each individual/claimant has a duty to seek the necessary information, regardless of whether it has been made available.
Another example of this would be if a claimant tried to initiate higher levels of review procedure, but the insurance company denied or otherwise prevented the claimant from being able to proceed with the higher level review of the claim or denial.
Exception #2: The Futility Exception
The second circumstance whereby the exhaustion requirement may be waived is known as the futility exception. The D.C. Plaintiff argued that, prior to filing the lawsuit, he attempted to resolve his issue by contacting several members of his employer’s management to no avail. Therefore, to go through the administrative appeal process would have been futile because it was highly likely his appeal would be denied. However, the futility exception has very strict standards. It is not enough for an adverse decision to be “highly likely”. Instead, it is required for there to be a certainty of an adverse decision. An administrative process could be deemed futile if, for example, it would require such considerable time to complete that the Plaintiff’s rights would be lost by the inability to make a speedy decision. Or, if a claimant was notified unequivocally that appeal of a denial would not be considered or would not alter the decision to deny.
Because the D.C. Plaintiff was not able to present sufficient arguments to the court to support his contention that the exhaustion requirement should be waived in his case, as well as for several other reasons such as failing to move for leave to amend his complaint and failure to state a claim, the court dismissed the Plaintiff’s lawsuit with prejudice and, upon motion for reconsideration, the dismissal was upheld. As a result of this plaintiff and his disability attorney filing a premature lawsuit, the claimant will be forever barred from having his disability denial heard by any court. The claimant’s claim is over and he has not further rights.
How to Ensure that You Fulfil the Exhaustion Requirement
This case teaches us that there are several crucial steps that must be taken if your claim for disability benefits has been denied, and even before that point, prior to submitting your initial application for benefits. First and foremost, read your Plan and understand your insurance company’s process for reviewing claims and the administrative appeal process that is available if/when the decision is made to deny benefits. Second, if your claim is denied, the denial letter should include language explaining your right to file an appeal. Appeals are typically time-barred and you only have a certain amount of time once your claim has been denied to submit additional information to the insurance company and request they reconsider their decision to deny your benefits. If the denial letter does not include this information, it is your duty to either read your Plan and learn what the procedure is to appeal a denial, or contact your claim representative and ask them to explain what remedy is available to you since your claim was denied.
If you file an Appeal, the disability company has 45 days to make decision and then for exceptional cause they can request two additional 30 day extensions. Once the time period is elapsed, if a decision has not been made the case is still not clear in every court as to whether a lawsuit can be filed. In our cases, if a disability company does act in accordance with the time restraints provided by the ERISA statutes, then we will file a disability lawsuit before a final decision is returned.
The best solution, if your claim for disability benefits has been denied, is to make sure to contact an experienced ERISA disability attorney. If you have any questions regarding your rights under a short or long term disability policy please contact Attorneys Dell & Schaefer for a free consultation.
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Who are Dell Disability Lawyers?
We are disability insurance attorneys that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.
Our attorneys have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement in more than 98% of our cases. Our disability insurance lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.
We offer disability insurance attorney representation nationwide and we welcome you to contact any of our LTD lawyers for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 900 videos and regularly provide tips to help protect your disability benefits.
Who do you help?
Our disability insurance attorneys help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.
Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.
A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.
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 insurance 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.
What are your fees?
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 phone, email, fax, or video conferencing sessions. 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 insurance attorney. We can be reached at 800-698-9159 or by email. Lawyers 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.