Articles Posted in ERISA

Insurance lawyers needs to know about this ERISA case.  It is from the U.S. District Court, Southern District of Texas, Houston Division, and is styled, Houston Metro And Spine Surgery Center, LLC v. BlueCross BlueShield of Illinois, et al.

Houston Metro alleges BCBS failed to pay for medical services it provided under its patients’ health benefit plans.  Hoston Metro sued under a promissory estoppel claim under Texas law, based on the allegation that Houston Metro provided the medical services only after BCBC represented that the patient and procedure were covered by a health benefit plan and that Houston Metro would be paid in accordance with that plan.  BCBS moved to dismiss the claim based on it being preempted by ERISA.

Section 1132(a) allows an ERISA plan’s participants and beneficiaries to sue “to recover benefits due to him under the terms of the plan, to enforce his rights under the terms or the plan, or to clarify his right to future benefits under the terms of the plan.”  The United States Supreme Court has read 1132 to preempt any state law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement scheme.

ERISA lawyers can tell you how important the administrative record is when fighting adverse determinations in ERISA cases.  This is illustrated in a 2017 case from the U.S. District Court, Southern District of Texas, Houston Division.  The opinion is styled, Elaine Wilson v. Blue Cross and Blue Shield of Texas.

This case is before the Court on a Motion for Summary Judgment filed by BCBS.  The Court ruled in favor of BCBS.  BCBS insured Wilson under a group health plan which is organized under the Employee Retirement Income Security Act of 1974, and provides for impatient hospital expenses, medical and surgical expenses, and preventative care.  The Plan specifies that coverage does not extend to, in relevant part, the following:

Exhausting administrative remedies is the law when it comes to ERISA claims.  This is again illustrated in a 2017 opinion from the U.S. 5th Circuit.  The opinion is styled, Memorial Hermann Health System v. Southwest LTC, Limited Employee Benefits Plan; Southwest LTC, Limited.

Memorial sued Southwest seeking payment of medical bills incurred by a patient covered by a Southwest health benefits plan.  The district court granted summary judgment in favor of Southwest, concluding that Memorial failed to exhaust administrative remedies.  This appeal followed.

The patient, C.W., was covered by an ERISA governed plan managed by Southwest.  Maritain was the third party administrator.  C.W. incurred over $400,000 in medical bills as a patient at Memorial.  C.W. assigned her insurance benefits to Memorial, who sought collection from Maritain.

Most people who find themselves in court like to think they are entitled to a jury trial.  Claims against ERISA insurance policies is one of those places where a jury trial is not permitted.  A recent Southern District, Houston Division opinion illustrates this.  The opinion is styled, Deo G. Shanker v. United of Omaha Life Insurance Company.

The attorney for Shanker in this case tried to be creative in asserting a state law declaratory judgment action in order to get a jury trial.

This is an insurance coverage case. Shanker suffered a heart attack and underwent open heart surgery.  After the attack, he was unable to perform his routine job duties, including driving, using fine motor skills, lifting medium and large loads, and standing for extended periods of time.  Shanker submitted a claim to Omaha for long term disability benefits.  After an exchange of documents, Omaha ultimately denied the claim.  Shanker sued Omaha alleging Omaha disregarded relevant medical information and improperly denied coverage.

Dallas and Fort Worth lawyers who handle ERISA claims need to read this recent Eastern District of Texas, Sherman Division opinion.  It is styled, Martha Shindoll v. United of Omaha Life Insurance Company.

Shindoll had an ERISA plan through her employer that provided short and long term disability benefits.  In 2005, Shindoll was diagnosed with fibromyalgia and Chronic Fatigue Syndrome (CFS).  She continued working but in 2010, her condition worsened.  In November 2012, her doctor, Kippels, ordered her off work.  In June 2013, Shindoll obtained a Vocational Analysis from a Dr. Hansen, who opined that she was completely disabled.  Shindoll applied for and received short term disability which was denied.  She appealed and submitted to an IME with a Dr. Daniel.  Daniel found she was completely disabled due to medication overdose syndrome.  United approved the short term benefits in October 2013.  The next month, Daniel issued an addendum to his initial analysis, stating Shindoll did not suffer from any cognitive dysfunction or physical functional impairment.

After exhausting short term benefits, Shindoll began receiving long term benefits.  In November 2014, United submitted Shindoll’s file for additional IME testing.  A peer review doctor, Dr. Raff, supplied a psychiatric and psychological peer review report that stated Shindoll did not have an impairing condition.  A second peer review doctor, Dr. Sartin, issued an infectious disease peer review report that found no cause for Shindoll’s symptoms and he disagreed with the diagnosis of any infectious disease.  In December of 2014, United’s doctor, Dr. Reeder, sent a letter to Kippels that set forth a review of Shindoll’s medical records, the IME, and peer reviews.  Reeder concluded that Shindoll suffers from an anxiety disorder and somatoform symptoms but no physical or cognitive impairment.

Whether an insurance plan falls under ERISA (Employee Retirement Income Security Act) or not, is a question routinely asked.  However, it is not a question easily answered.  A Southern District, Galveston Division opinion helps.  The opinion is styled, Kirstin Walker v. Regence Blue Cross Blue Shield of Texas.

The is a summary judgment opinion dealing with the issue of whether or not the Blue Cross is an ERISA plan.

ERISA applies to any employee benefit plan if it is established or maintained (1) by an employer …; or (2) by an employee organization …; or (3) by both an employer and an employee organization according to 29 U.S.C 1003(a).  Section 1102 defines an employee welfare benefit plan as any plan, fund, or program established or maintained by an employer or by an employee organization, or by both, for the purpose of providing its participants or their beneficiaries with certain benefits through the purchase of insurance or otherwise.

Lawyers who handle ERISA (Employee Retirement Income Security Act) claims need to read this opinion from the U. S. Western District, Austin Division.  The opinion is styled, Genevie Ilene Maley, et al. v. Minnesota Life Insurance Co.

In this case, the insured had, at various times named two beneficiaries.  When the insured died, both the beneficiaries sought benefits.  They eventually agreed to split the policy proceeds and entered into an agreement with Minnesota for them to be paid half each.  Later, Minnesota then asserted a policy defense of suicide and refused to pay.  The insureds sued for breach of contract.  In the breach of contract claim, the Court ruled in favor of Minnesota.  Minnesota then sued for attorney fees under 29 U.S.C. 1132(g)(1).

ERISA provides that: in any action under this subchapter … by a participant, beneficiary, or fiduciary, the court in its discretion may allow reasonable attorney’s fees and costs of action to either party.  Any party who achieves some degree of success on the merits may request attorney’s fees, not merely the prevailing party.  This success cannot be merely trivial success on the merits or a purely procedural victory.  Instead, the party satisfies this standard when the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether the particular party’s success was established or occurred on a central issue.  Here, the parties agree that the judgement qualifies as some degree of success on the merits for Minnesota.

Parker County lawyers know that insurance policy’s have to be read.  Otherwise the result in a U.S. Eastern District of Texas case, can be the result.  The case is styled, Rita Jones v. Hartford Life and Accident Insurance Company et al.

This was a Rule 12(b)(6) Motion to Dismiss filed by Hartford.  The Court granted the motion.

Jones filed suit under ERISA, Section 1132 arising from Hartford’s decision to terminate long-term disability insurance benefits.

Attorneys who handle ERISA claims can tell you how difficult these ERISA cases are to win.  When someone makes a claim under an ERISA policy, the plan administrator renders a decision.  The claimant is advised how to appeal the decision if the claimant does not like the result.  When the claim is denied on appeal, the only thing left to do is to file a lawsuit.

The case is going to be in a Federal Court.  The claimant is not entitled to a jury trial.  A Federal Judge then reviews the materials / information that was before the plan administrator at the time they made their decision.  The standard the Federal Judge uses in reviewing the decision is called an “abuse of discretion” standard.  In other words did the plan administrator abuse the discretion given them by the plan when rendering their decision.   No new information is allowed to be presented to the Federal Judge.  Only the information used when the claim was originally filed and any information added at the time of appeal can be looked at under this abuse of discretion standard.

The other way for the case to proceed is “de novo.”  Under the de novo review, a claimant essentially gets a second bite at the apple in retrying the case.  In other words the claimant gets to provide new information for the Federal Judge to consider in reaching a decision.