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The Initial Claim: An ERISA claim is instituted by way of a formal filing. Some companies accept claims telephonically while most require the completion of claim forms. Traditionally, claim forms encompass several documents that the insured is to complete, a form or two for the employer to complete, and an attending physician's statement which the insured's doctor must complete. The insured is also required to execute certain releases which will allow the insurer to gather medical records. After the claim is submitted the insurer will begin its claim investigation. This process entails reviewing the claim forms and gathering medical, pharmacy and financial records. Ideally, after reviewing all relevant information, the insurer will issue a claim decision. The initial claim process will usually take anywhere from one to four months to complete. A claim will be either approved or denied. If the claim is denied the insurer will issue a denial letter that is required by law to contain certain information. Among the information that is required is an explanation as to the basis for the denial and the opportunity and instructions as to how to appeal. When a claim is denied, you should immediately seek legal consultation. You generally do not need the services of a lawyer during the initial claim process, but if, and when, a claim is denied you should not, under any circumstances, attempt to handle the appeal of that denied claim without the assistance of an experienced attorney. The appeal process is the most important step of your claim.
The Claim Decision Appeal: A claim appeal must be instituted in writing (usually, there are very limited exceptions). The appeal process is by far the most important step in any ERISA governed claim. First, appeals are legally required and if a person does not appeal in a timely fashion then the person will be forever barred from pursuing his/her claim (with very limited exception). Second, the appeal is generally the last opportunity to submit substantive materials to the record. The foregoing is important because generally when a lawsuit is instituted the insured or his or her attorney will not be allowed to submit new information at that stage. The appeal is usually the last time that substantive information can be submitted for the court's ultimate consideration. Accordingly, an experienced attorney will know how to gather the documents from the insurance company and other sources that must be reviewed to properly handle the appeal and will know how to deal with the insurance company during this process to make sure that the insured's rights are best protected. The purpose of the appeal process, from the insured's perspective, is twofold. First, you want to present the best case you can to the insurance company so that hopefully it will reverse its claim decision and approve the insured's claim. Second, though, if the claim remains denied, you want to "stack the record" as well as can be done during the appeal process so that ultimately you will have the information you need in the record once you get before a court. If your claim has been denied, you should immediately seek representation with an attorney experienced with ERISA cases. Failure to do so may irreparably damage your claim and potential case.
Filing A Lawsuit: An insured can only file a lawsuit once all claim appeals have been properly exhausted. Ideally, an insured will have had the assistance of an experienced attorney during the course of the appeal (which is by far the most important step of any claim). If so, then even if the claim is denied the record should be in good shape so that an experienced attorney can work with it during the course of the lawsuit. With an ERISA case, a lawsuit is usually initiated by filing a summons and a complaint in the United States District Court. The filing fee for such a complaint is $350.00. (Foster Law Firm will advance that cost and Foster Law Firm does not require payment of any monies upfront.) Once a suit is instituted, then the insurer or self-funded ERISA plan, which is the defendant in the lawsuit, is allowed between 20 or 40 days within which to file an answer and any counterclaims with the court. Although counterclaims are not frequent they do occur. The usual basis for a counterclaim is when an insured has previously been paid benefits under the plan, but has later received income from another source such as Social Security, Workers' Compensation, etc. Almost every disability plan has an offset for an insured's receipt of monies from another source such as Social Security or Workers' Compensation. Health insurance plans also contain similar offsets which allow the health insurer to recover monies when an insured receives monies from another source (such as a settlement of a lawsuit). If there is any overpayment then it is very common for the Defendant to assert a counterclaim. Your lawyer will file a pleading with the court in response to the counterclaim and that pleading is known as a reply.
The way the lawsuit is handled is wholly dependent on the rules of the District in which the case is pending. Every District has unique rules. In South Carolina, the court issues a specialized case management order in ERISA cases which provides for a very streamlined, efficient and speedy process and disposition of the lawsuit. In South Carolina, the court requires mediation (a formal process where the parties are required to sit down with each other and try and settle the case) very early in the case. Most other Districts do not require mediation or require that it occur much later in the process. The South Carolina District Court feels that it is best for the parties to "visit" with each other early in the process to try and get the case resolved. If the parties cannot settle the case then the court requires the parties to attempt to agree to certain relevant procedural issues and requires the parties to file certain documents with the court including the "administrative record" relating to that insured's particular claim. (The "administrative record" consists of all documents possessed by the Defendant regarding the Plaintiff's claim.) The parties' attorneys then prepare briefs for the court outlining their respective client's positions. Generally, in the South Carolina District Court, the court will decide the case based upon the joint stipulations, the administrative record, plan documents which are filed with the court, and the attorneys' briefs in support of their party's respective positions. It is rare, in South Carolina, for attorneys to even appear in court. With an ERISA case, there is no trial in the traditional sense. The court decides the case based solely upon the substance of the administrative record that is created during the appeal process which is why the appeal process is so crucial to any claim. No attorney can thoroughly evaluate the merits of a client's case until such time as he or she is able to review the administrative record. The administrative record is held by the insurance company and is required to be disclosed during the course of litigation. In South Carolina, the disclosure occurs very early in the process (shortly after the Defendant's answer is filed). When the case is decided, the Judge will issue an order either ruling for the Plaintiff or the Defendant. (There is one exception and that is where a court might decide that the case is not yet ripe for decision and "remand" the claim back to the insurer for further consideration.) If the court rules with the insurance company then the claim decision is upheld and the case is over unless the claimant appeals (see "The Appeal" section below). If a claimant wins then that means that the court has reversed the insurer's claims decision to some extent. Under ERISA, all a party can recover on a benefit claim are the back benefits that are due and, sometimes, attorney's fees and costs. Your attorney will discuss these issues with you in more detail at the appropriate time. After the Judge's order is issued, your attorney will discuss it with you and if the Judge has ruled against you your attorney will discuss with you the prospect of an appeal.
The Appeal: It is rare for a Plaintiff to appeal a District Court's decision. It is difficult to win on an appeal. However, in those cases where an appeal is lodged, the appeal is filed with the United States Circuit Court for the Federal Circuit in which the District Court is located. The reason appeals are rare is because the law of ERISA is tilted in favor of the plan and its administrators. The state of ERISA law when coupled with the standard of review on appeal makes it difficult for Plaintiffs to prevail on appeal. Also, appeals can be expensive. The cost of an appeal (excluding attorney's fees) is usually several thousand dollars. On those cases which are appealed the appeal is lodged within 30 days of the District Court's final order. Once the appeal is lodged, a person can usually expect the appeal to take anywhere between one (1) to two (2) years. Over the last several years, the Federal Appeals Court System has been handling cases more quickly than they used to and it is now common for a litigant to receive a decision on appeal approximately a year after the appeal is lodged (although it can take much longer). There is no trial on an appeal and the client will not appear in court. Instead, the attorney may travel to the Appellate Court to argue the case or the court may decide the appeal based upon filings with the court, with no oral argument, by attorneys. In most Circuits, the parties do not even know who the Judges are that will be hearing the case until shortly before the argument. So, it is very difficult to predict what will happen on any particular appeal until the case is actually argued on appeal. Usually, a decision is rendered on appeal within sixty (60) days after the oral argument, if any.
Fees: Different lawyers and law firms handle fees for ERISA cases differently. Some attorneys or firms require the client to pay a retainer upfront and then bill on an hourly basis against that retainer to handle the case. Other firms will require a retainer upfront only to cover costs, but will handle the attorneys' fee aspect of the claim on a contingent fee arrangement. Foster Law Firm, LLC only handles Plaintiffs' ERISA cases on a contingent fee arrangement. The firm does not require that the client pay any money upfront (meaning that the firm is only paid fees when monies are recovered). Foster Law Firm, LLC advances all costs of the litigation for ERISA Plaintiffs' cases and only takes a fee if money is recovered for the client. Per South Carolina ethics rules, Foster Law Firm, LLP's fee agreements are in writing and explain the fee agreement in specific detail.
Taxes: Monies obtained from an ERISA lawsuit (rather by way of settlement or judgment) may or may not be taxable. Whether the money is taxable depends on a number of factors and Foster Law Firm, LLC does not have any tax attorneys so they are not competent to provide advice regarding tax issues. If you undertake an ERISA lawsuit, you should consult with a qualified tax professional regarding the taxability of any proceeds that may be recovered.
Overpayment and Offsets: As referenced above, usually there is some interaction between ERISA governed benefits and money from other sources. Most frequently, this issue occurs in connection with long term disability claims under ERISA. Most long term disability policies provide the long term disability insurer or plan with an offset or credit for monies received from other income sources such as Social Security, Workers' Compensation, and many others. In order to determine how this issue will affect a particular claim, the insured and the attorney must review the particular policy. It is quite frequent that a person can draw long term disability benefits and then later be awarded monies under Social Security or for a Workers' Compensation claim and that an overpayment resulting in monies due to the long term disability insurer will occur. An overpayment or offset issue can only be evaluated for a particular client in the context of that person's circumstances.