Justia Insurance Law Opinion Summaries

During his employment with a subsidiary of Santander Holdings, Stevens received treatment for ankylosing spondylitis, a chronic inflammatory disease, and participated in a short-term disability plan (STD) and a long-term disability plan (LTD). When Stevens’ condition worsened, Liberty Mutual, the administrator of Santander’s plans, initially awarded STD benefits to Stevens, then determined that Stevens no longer suffered from a qualifying disability and terminated his benefits. Stevens sued under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The district court found that Liberty Mutual’s decision to terminate Stevens’s STD benefits was arbitrary and capricious and remanded with instructions to reinstate Stevens’s STD benefit payments retroactively and to determine his eligibility for LTD benefit payments. The Third Circuit dismissed an appeal for lack of jurisdiction, finding that the remand order to the plan administrator was not a “final decision” appealable pursuant to 28 U.S.C. 1291 at that time. The district court retained jurisdiction over the case and the order is not yet appealable. View "Stevens v. Santander Holdings USA Inc." on Justia Law

Central States, a multi-employer trust fund governed by ERISA, provides health and welfare benefits to participants in the teamster industry. Student Assurance processed claims for student accident policies. Central States claimed that it paid medical expenses of $137, 204 for 13 junior high, high school, and college student-athletes who were covered dependents under its plan and who sustained athletic injuries. Central States sought reimbursement from Student Assurance, which refused to pay. Central States alleged that according to the coordination of benefits provision of its plan, the student accident policies supply primary coverage for the students’ covered medical expenses. Student Assurance claimed that the student accident policies are excess policies, and that they are not obligated to pay until Central States has reached the maximum contribution under its plan. Central States sued, citing federal common law and section 502(a)(3) of ERISA, seeking declaratory relief, restitution, and the imposition of an equitable lien and constructive trust to secure reimbursement for the benefits paid on behalf of the common insureds. The district court dismissed, and the Eighth Circuit affirmed, holding that the claims, while ostensibly seeking equitable remedies, were actually for legal relief that is unavailable under section 502(a)(3). View "Cent. States, SE & SW Areas Health & Welfare Fund v. Student Assurance Servs., Inc." on Justia Law

In Sprint Commc’ns, Inc. v. Jacobs, the Supreme Court revisited the doctrine of abstention enunciated in Younger v. Harris. That doctrine requires federal courts, in the absence of extraordinary circumstances, to refrain from interfering with certain state proceedings. In this case, David Knight, an employee of Sirva Relocation, LLC, filed a charge of discrimination with the Massachusetts Commission Against Discrimination (MCAD) alleging that Sirva and Aetna Life Insurance Company (together, Appellants) had discriminated against him on the basis of disability in violation of Mass. Gen. Laws ch. 151B and the Americans with Disabilities Act (ADA). Appellants filed a federal complaint against the Commonwealth of Massachusetts, the MCAD, its commissioners, and Knight, asking the court to enjoin the MCAD proceeding on the basis that ERISA preempted the chapter 151B claim. The MCAD and Knight moved to dismiss the complaint, entreating the district court to abstain. While the case was pending, the Supreme Court decided Sprint. The district court dismissed the federal court action, concluding that Younger abstention was appropriate in this case. The First Circuit affirmed the district court’s decision to abstain and further clarified its own case law concerning the exception to the Younger doctrine for facially conclusive claims of preemption. View "Sirva Relocation, LLC v. Golar Richie" on Justia Law

Kienstra, a Missouri resident, received treatment for uterine fibroid tumors at the Mayo Clinic in 2008. Her health plan concluded that her treatment fell outside the plan's coverage as experimental and requiring prior approval. Internal appeals failed. The plan is a self-funded multiple employer plan, maintained pursuant to collective bargaining agreements, and subject to the Employee Retirement Income Security Act, 29 U.S.C. 1002(1). The plan specified that any civil action for wrongful denial of medical benefits under ERISA must be filed within two years of the final date of denial. Kienstra filed suit almost two and a half years after she learned her claim had been denied. She unsuccessfully argued that the contractual limitations period was invalid because the plan's rules of construction stated that its terms should be read to comply with Missouri law, that a 10-year Missouri statute of limitations governed, and that a separate statute barred contracting parties from shortening that limitations period. The Eighth Circuit affirmed. There is no conflict between the plan's contractual limitations period and Missouri law; state law does not "apply of its own force to a suit based on federal law—especially a suit under ERISA, with its comprehensive preemption provision." View "Munro-Kienstra v. Carpenters' Health & Welfare Trust Fund of St. Louis" on Justia Law

Orr died in a motorcycle accident. His daughters sought benefits under a group life insurance policy governed by the Employment Retirement Income Security Act and issued by USIC to Orr’s former employer. The policy provided accidental death, subject to exclusions, including one for loss resulting “directly or indirectly from … intoxication[.]” USIC asserted that Orr’s death resulted from his intoxication. The letter explained that autopsy and toxicology reports revealed that Orr’s blood alcohol level at the time of the accident exceeded the legal limit and that USIC’s medical consultant opined that Orr “would have been impaired in attention, coordination, and balance,” as a result. The letter advised the Orrs of their right to seek review and included a copy of USIC’s Life Claims Denial Review Procedure, stating, in boldfaced, all-caps print, that a request for review must be submitted in writing within 60 days and warning: “If … you do not complete both the first and second review before filing a lawsuit, a court can dismiss your lawsuit.“ The document encourages claimants to call with any questions. The Orrs filed suit before completing the review process. The Seventh Circuit affirmed summary judgment in favor of USIC on grounds of failure to exhaust administrative remedies. View "Orr v. Assurant Emp. Benefits" on Justia Law

Insurance companies allegedly refused to honor claims for payment of blood-clotting-factor products. After they paid the claims in full, the district court dismissed a complaint under the Employees Retirement Income Security Act (ERISA) and state law. Following dismissal, both the plaintiffs and defendants sought attorney’s fees and costs. The Third Circuit affirmed denial, but remanded one issue: whether the plaintiffs were entitled to interest on the delayed payment of benefits. On remand, they sought interest of $1.5 to $1.8 million, primarily under the Maryland Code, with $68,000 based on the federal Treasury bill rate. The companies agreed to pay $68,000.00 in interest and the district court dismissed the case. Plaintiffs then sought attorney’s fees and costs of $349,385.15. The district court denied the motion, finding that plaintiffs had failed to achieve “some degree of success on the merits” as required for an award of fees under ERISA. The Third Circuit reversed, holding that the court used an incorrect legal standard to evaluate eligibility for attorney’s fees and misapplied the “Ursic” factors. The “catalyst theory” of recovery is available to the plaintiffs and judicial action is not required under that theory in order to establish some degree of success. View "Templin v. Independence Blue Cross" on Justia Law

In 2000, Rochow sold his interest in Universico to Gallagher and became President of Gallagher. As Gallagher employee, Rochow was covered under a LINA disability policy. In 2001, Rochow began to experience short term memory loss, chills, sweating, and stress. Gallagher demoted Rochow and forced Rochow to resign in January, 2002. In February 2002, Rochow experienced amnesia, was hospitalized, and was diagnosed with HSV-Encephalitis, a rare, severely debilitating brain infection. LINA repeatedly denied Rochow benefits stating that Rochow’s employment ended before his disability began. Rochow sued Cigna, LINA’s parent company, alleging breach of fiduciary duty under ERISA, 29 U.S.C. 1104(a). In 2007 the Sixth Circuit affirmed a decision that denial of Rochow’s claims was arbitrary and did not appear to have been made solely in the interest of the participants and beneficiaries or the exclusive purpose of providing benefits to participants and beneficiaries as required by ERISA. Rochow died in 2008. In 2009, the district court ordered an equitable accounting of profits and disgorgement of $3,797,867 under an equitable theory of unjust enrichment. The Sixth Circuit affirmed in 2013. Following rehearing en banc, the Sixth Circuit later vacated the disgorgement award and remanded the case to determine whether Rochow is entitled to prejudgment interest. View "Rochow v. Life Ins. Co. of North Am." on Justia Law

From 1995-2009, Johnson worked for CRE. In the last three years, Johnson worked from home, 8 hours a day at a computer. Johnson was covered under CRE’s United disability insurance policy. In 1999, Johnson was diagnosed with fibromyalgia. In 2004, she underwent neck surgery for nerve injuries. On the day she resigned, Johnson visited MacDonald, her primary care physician, who diagnosed anxiety, depression, fibromyalgia, and chronic pain. Johnson completed a short-term disability form. MacDonald completed an Attending Physician’s Statement. United denied the application. Based on the recommendations of its doctor, United denied Johnson’s appeal. Johnson sought long-term disability benefits. MacDonald completed a Physician’s Statement that imposed multiple limitations. United denied the claim. Johnson appealed. United referred Johnson’s file and medical records to Boscardin, an orthopedic surgeon, who determined that, although Johnson experienced chronic pain in her neck and spine, Johnson’s complaints were not supported by “conclusive, objective evidence.” McClellan, Johnson’s surgeon, responded that he “[o]verall” agreed with Boscardin. United denied the appeal. Johnson sued under ERISA. The district court granted Johnson summary judgment, finding that United failed to consider Johnson’s condition as a whole. The Eighth Circuit reversed, finding the denial supported by substantial evidence. View "Johnson v. United of Omaha Life Ins. Co." on Justia Law

In 1988, Brake began working at Hutchinson. She was diagnosed with multiple sclerosis (MS) in 2000, but continued to work. Brake purchased disability insurance through Hutchinson’s plan in 1988. Hutchinson, as the plan administrator, ceded discretionary authority to Hartford to construe the plan and make eligibility determinations. In 2007, Brake purchased "buy-up" coverage that excluded a disability if medical treatment for that condition was rendered within 12 months prior to the effective date. The limitation ended after a year without a claim: if Brake was treated for MS between April 1, 2006, and April 1, 2007, and then became disabled as a result of MS before April 1, 2008, the exclusion would limit her benefits to core plan coverage. Brake began experiencing problems with her MS in 2007 and received benefits from a separate short-term disability plan. On March 25, 2008, she stopped working at Hutchinson. In May, she applied for LTD benefits, stating her onset of disability as July 27, 2007. Hartford informed her that her LTD benefits were approved, but not at the buy-up plan rate. Brake claimed that doctor visits during the 12 months were for a pap smear and a yearly routine MRI. Hartford cited the same records which indicated that Brake was increasingly less able to manage her MS conditions during the 12 months before her purchase of buy-up coverage. In Brake’s suit under ERISA, 29 U.S.C. 1001, the district court found that Hartford did not abuse its discretion. The Eighth Circuit affirmed summary judgment in favor of Hartford. View "Brake v. Hutchinson Tech., Inc.," on Justia Law

Ibson and her family were insured by UHS through a policy available to her to as a member of her law firm. Due to an error, UHS began informing Ibson’s medical providers that Ibson and her family no longer had insurance coverage. Although UHS eventually paid the claims it should have paid all along, Ibson sued, raising state law claims of breach of contract, negligence, and bad faith, and seeking punitive damages. UHS responded that Ibson’s claims were preempted by the Employee Retirement Income Security Act (ERISA) and barred by the policy’s three-year contractual limitations period. The district court agreed and entered summary. The Eighth Circuit reversed and remanded, agreeing that Ibson’s state law claims are preempted under ERISA, but rejecting entry of summary judgment on the basis of the three-year contractual limitations period. View "Ibson v. United Healthcare Servs., Inc." on Justia Law