ERISA, the Employee Retirement Income Security Act of 1974, governs everything from the payment of retirement benefits to life insurance to short- and long-term disability when those benefits are provided by an individual’s employer and not by a private insurer. An important distinction is that while many employer plans are administered by private insurance companies, where the benefits in question are provided as a result of an individual’s employment, they are governed by ERISA.
Many people are aware of the difficulty of obtaining a favorable decision as it relates to disability payments for an injury suffered while on the job. However, in a case recently decided in the Fifth Circuit Court of Appeals, Ester Hill White v. Life Insurance Company of North America, a claimant had been presented with a situation where employer-provided life insurance benefits had been denied based upon the insurance company’s decision that the individual’s use of drugs and alcohol had been the cause of death. The central question of the case addressed a common problem in processing ERISA claims– that the party deciding whether or not an individual is eligible for benefits is also in charge of the investigation for reaching that conclusion, which presents an undeniable conflict of interest.
“The central question of the case addressed a common problem in processing ERISA claims– that the party deciding whether or not an individual is eligible for benefits is also in charge of the investigation for reaching that conclusion, which presents an undeniable conflict of interest,” said J. Price McNamara, the Louisiana ERISA Claims Attorney that represented the plaintiff, Esther White, throughout the appeals process. In the case in question, the life insurance company had denied her claim to take out her husband’s life insurance policy because their “investigation” found drugs and alcohol in her husband’s system at the time of death. Knowing that there was no way her husband was intoxicated at the time, White and McNamara conducted an independent investigation where a doctor found that there had been no trace of alcohol or drugs in the initial report. The insurance company had altered the reports of their investigation in order to deny the claim and avoid paying out the policy Esther White was legally owed.
Courts have found in previous ERISA cases, as it found in this one, that certain decisions made by the insurer could result in procedural unreasonableness. Here, the court found that the decision by the insurer to not include the evidence by the doctor pertaining to the level of drugs and alcohol (or lack thereof) found in their investigation – was procedurally unfair to the claimant. The insurers had strategically and maliciously manipulated their procedural power to deny justice.
The concept underlying procedural unfairness is notice: that an individual who has his or her claim denied should have notice regarding what information was considered, what information was not considered, and why or why not. This allows individuals who are denied to approach any appeals with a full understanding of the grounds for the decision.
ERISA claims are complex and filled with pitfalls. If you or a loved one are in a situation where you have had an ERISA claim denied, do not try to appeal the case without the assistance of an experienced ERISA Claims Attorney.