ERISA Disability Claims

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension, welfare and health plans in private industry. Long-term disability plans are considered welfare plans.

ERISA is not something every attorney should attempt to practice without research and experience - ERISA is a complex area of law, and few lawyers in the United States have a solid understanding of the field. As a potential client it is important that your attorney have experience in ERISA and ERISA litigation.

Disability claimants must notify bankruptcy courts of their disability claim

Often a person wrongfully denied an ERISA disability benefit that is benefits from a private employer, have to seek bankruptcy protection from their creditors. This is to be expected since claimants paid for their private disability insurance and expected those benefits to be there when they became disabled. However the insurance companies that have forced a claimant to seek bankruptcy protection often try to take advantage of a trap their actions have lain.

When a person feels for bankruptcy they have to disclose all of their assets to the bankruptcy. This would include lawsuits and potential lawsuits. It is these potential lawsuits that cause the problem. Persons often do not realize that they have a potential claim against the insurance company for the wrongful denial of their benefits. Those disability benefits are often exempt from being part of the bankruptcy estate. Thus, the claimant often fails to place that potential claim on their bankruptcy schedules.

And there lies the trap.

The claimant now has to sue for wrongful denial of the disability benefits. So the claimant sues, Cigna, MetLife, Aetna, Unum, Liberty life, Lincoln or whoever. If the insurer knows that it forced you into bankruptcy it then looks at your bankruptcy schedules. If the lawyers for the insurance company see you forgot to list your claim then it moves to dismiss your lawsuit. The rules that require you to disclose your potential lawsuits exist to protect the claimant’s creditors from a claimant hiding an asset. The insurance company generally is not a creditor of the claimant but at least one court has thrown out a claim for benefits for failure to disclose those benefits.

A court in Texas in a case involving MetLife, stated that “[a]t issue in this case is whether judicial estoppel bars the Plaintiff from pursuing her claims under ERISA because she failed to disclose the Policies and the lawsuit on the bankruptcy petition.” Acuna v. Conn. Gen. Life Ins. Co., 560 F. Supp. 2d 548, 551 (E.D. Tex. 2008).

Acuna, the plaintiff argued that "Defendants' wrongful denial of Plaintiff's claim led to the filing of the bankruptcy which, ironically, Defendants now rely upon as the basis for claimed equitable relief to be freed from their obligation to pay benefits for which they have received fifteen years' worth of premiums." (Citations omitted) Acuna, 560 F. Supp. 2d at 553.

The Court did not buy that argument. In fact, it twisted it on Acuna. “Plaintiff has repeatedly asserted that the filing of the bankruptcy was a direct result of the denial of the claim benefits. (Citations omitted).  Plaintiff had a motive to conceal this claim because it would result in the windfall that the Fifth Circuit sought to prevent. Acuna, 560 F. Supp. 2d at 556.

In ruling that Acuna cannot maintain her lawsuit, the Court found “…that judicial estoppel applies. As explained above, the doctrine of judicial estoppel is meant to protect the judicial system, not the litigants, and thus Plaintiff's argument regarding the clean hands doctrine is inapposite. The Court reminds the Plaintiff that the harshness of the result is counterbalanced by the emphasis that the Fifth Circuit places on the "importance of full disclosure in bankruptcy proceedings." Acuna, 560 F. Supp. 2d at 556.

Therefore if you intend to file for bankruptcy because the insurance company wrongfully denied your claim or you have filed already, make certain you have listed your potential lawsuit for benefits on your bankruptcy schedules.

Contact Jim Plummer at 713.659.3737 for questions regarding wrongfully denied ERISA disability benefits. Contact your bankruptcy lawyer for help completing your schedules.

Plummer | Raval was created as a law firm dedicated to disability and ERISA. After a short time, Jim Plummer, the principal ERISA attorney of Plummer | Raval, began to litigate ERISA lawsuits exclusively. He continues to practice solely as an ERISA lawyer, and has gained significant experience in this specific area of disability law.

ERISA Disability Claim Consultation Request

Please use this form to request a consultation with Plummer | Raval for your ERISA long-term or short-term disability insurance claim. Any information you provide will be kept private, but your use of this form or any other form on the site cannot and does not create an attorney-client relationship between you and Plummer | Raval. Please read the legal policies, terms of use and privacy policy, for Plummer | Raval.

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Hartford's termination of claims it is currently paying based on surveillance

Plummer | Raval has extensive experience representing claimants against this insurer. Our experience shows Hartford undertakes the following steps to deny or terminate claims.

Hartford uses video surveillance to assist it in terminating claims.

Plummer | Raval has documentation on several firms Hartford hires to investigate and video record claimants.

Hartford often hires expensive surveillance companies who provide embellished reports of claimant activity. One such report described a woman with severe neck surgery pain lifting a child into a car. The claimant has no children of lift able age living with her or in her extended family.


Plummer | Raval holds a copy of the Hartford claims manual which lists several inherent conflicts of interest in Hartford’s claims review process.


Hartford Life operates under an inherent and structural conflict of interest as Hartford Life is liable to pay benefits from its own assets to Plaintiff and each payment depletes Hartford Life’s assets.

Defendant Hartford Life’s behavior corrupts any reasonable meaning of “full and fair review” that ERISA requires.

Hartford Life chooses to conduct reviews of denied claims in order to maintain strict control over its risk of loss and to maintain higher profit margins than it could if a financially independent third party decided the appeals.

As a routine business practice Hartford Life uses the appeals process to support initial benefit denials rather than to review impartially whether Defendant Hartford Life should reverse appealed denials.

Hartford Life's corporate culture pressures claims personnel to deny claims on appeal to reduce the amount of benefits Defendant Hartford Life pays out.

Hartford Life intentionally rationalizes claim denials on appeal by soliciting biased opinions from medical professionals to add strength to its initial claim denials. The medical professionals are contracted by Hartford for extended periods of time and provide Hartford favored medical reviews. The companies listed below are a small example of the companies Plummer | Raval holds documentation on:

  • In the past Hartford Life used the services of University Disability Consortium (“UDC”) to whom Hartford Life had paid over $13 million for review services over approximately four years. UDC derived nearly three quarters of its revenue from Hartford.
  • In the past Hartford Life also retained a company called Medical Advisory Group (“MAG”) of Plaistow, New Hampshire to whom Hartford Life paid over a million dollars a year for many years for medical reviews.

Hartford Life moves from one medical review company to another that serves its needs while providing an incentive for its doctors not to find insureds impaired so as to increase the likelihood of continuing business.

Hartford Life’s selection of medical review companies such as UDC and MAG shows that Hartford Life does not try to evaluate fairly claims but selects medical review companies and their doctors who will provide expected results, finding that insureds are not impaired.

Hartford Life limits its employees to certain medical vendor companies that they may use for rendering medical or vocational determinations of its insureds.

The medical review company doctors provide significantly more file reviews rather than actual examinations of Hartford Life’s insureds.

Plummer | Raval has information on all past and current “independent” medical examiners Hartford employs.

Hartford’s claims manual describes several other conflicts of interest including incentive programs for employees to deny benefit claims. Hartford Life employees pay special scrutiny to claims that may cause Hartford Life to pay benefits for long periods of time. It is reasonable to conclude that Employees who save Hartford Life money by terminating or denying claims are likely to be rewarded with bonuses compared with those who do not. The Hartford Life claims manual confirms this conclusion and will be used by Plummer | Raval during litigation of any claim against Hartford Life.

Insurance Company(ies):

Plummer | Raval holds documents proving CIGNA / LINA violated insurance regulations in disability claims

Plummer | Raval has an extensive litigation history with CIGNA and has considerable evidence supporting claimants in ERISA cases against CIGNA.

In Schneider v. Unum Life Ins. Co. of Am., 2007 U.S. Dist. LEXIS 97867 (D. Or. Oct. 11, 2007) the court found that UNUM may not have come before the court with clean hands. CIGNA does not have clean hands.

Plummer | Raval holds records from government agencies that show CIGNA has violated insurance regulations and is biased against claimants. In one study, a CIGNA office committed a regulatory violation in one out of three claims processed. These violations were against the state regulations or the insurance code.

The bulk of the citations arose because of a failure to adopt and implement standards for prompt investigation and processing of claims and the second largest group arose from failure to effectuate prompt, fair and equitable settlements of claims in which liability had become reasonably clear. CIGNA-LINA acknowledged that all of the claimed violations had occurred. In contrast to CIGNA’s disability claims files, the review of 45 life insurance files in the same claims office found everything in order.

CIGNA cannot contest the likelihood that its entire claims operation is similarly infected with inaccurate decisions and regulatory violations in one third of the cases.

The reports and records Plummer | Raval has in its possession meets the Schneider court’s requirement that the insurer seeking to benefit from Plaintiff’s error must not have unclean hands.

In addition to the government reports, Plummer | Raval can cite numerous recent federal court rulings have also accused CIGNA of mishandling disability claims.

Plummer | Raval has documented and verified newspaper studies concerned with flaws in CIGNA’s disability claims practices. One such article describes the comparison of market share to the share of lawsuits for disability benefits. This article discusses six companies, including CIGNA, who are responsible for far more litigation than their share of the disability market would suggest. Every offending company in the study was a for-profit stock insurer. The mutual companies, including such behemoths as Northwestern Mutual and Mutual of Omaha, despite their large market share, apparently are seldom sued perhaps indicating that Wall Street does not compel these policyholder-owned companies to increase profits by cheating on the payment of claims.

Insurance Company(ies):

Delay in providing denial letter does not alter standard of review

Steward v. Prudential Insurance Company of America, Civil Action No. 3: 12-CV-3844-B (N.D. Tex. Jan. 10, 2014) involved a claim for disability benefits. The Court first addressed Plaintiff's argument that Prudential's failure to provide the denial letter within 45 days of Plaintiff's appeal changed the standard of review from abuse of discretion to de novo. The Court noted that neither party informed the court of the date Prudential received the appeal. The Court found that Prudential was anywhere from 62 to 86 days late. However the Court determined that Prudential substantially complied with ERISA's procedural regulations. The Court further noted that even if it found that Prudential did not substantially comply with ERISA's procedures it would still not change the standard of review from abuse of discretion to de novo. (Lafleur v. Louisiana Health Serv. and Indemnity Co., 563 F.3d 148, 158 (5th Cir. 2009)). ("Although [defendant] failed to substantially comply with the procedural requirements of ERISA, these violations were not flagrant, so the de novo standard of review . . . is not implicated. Instead, we face the more ordinary situation in which a plan administrator has exercised discretion but, in doing so, has made procedural errors.").
Having decided that the standard of review would remain abuse of discretion the Court determined that Prudential did not abuse its discretion. The Court noted that it was to examine the record for substantial evidence to support Prudential's denial of the Plaintiff's claim. The Court found that the opinion of Prudential's medical experts coupled with Plaintiff's psychiatric records lacking evidence of a functional impairment was substantial evidence supporting Prudential's denial.

Documents not submitted during the administrative review are not part of the adminstrative record

In Kearney v. Aetna Life Insurance Company, Civil Action No. 13-548-SDD-RLB (M.D. La. Apr. 22, 2014) Aetna provided what it claims was the complete administrative record to the Plaintiff. Plaintiff responded by filing a motion and attaching to the administrative record medical records it claims should be part of the administrative record. Aetna's appeal personnel attached an affidavit to Aetna's response in opposition to Plaintiff's motion to supplement the administrative record. In the affidavit the affiant avers that Plaintiff had not submitted the contested medical records during the administrative review process and thus the records were not part of the administrative record.
The Court sided with Aetna holding there was no evidence that Plaintiff had provided the records to Aetna during the administrative review process thus the records were not part of the administrative record and could not be considered during litigation.

Insurance Company(ies):

Fifth Circuit Awards Attorney's Fees to Insurer

SPENRATH v. THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, C.A. No. 13-20196. (5th Cir. Apr. 18, 2014) (per curiam) involved a claim for disability benefits under ERISA. Although this case cannot be cited as a precedent it is important for the appellate trap. Here the district court affirmed Guardian's denial of Ms. Spenrath's claim for disability benefits and awarded attorney's fees to Guardian. Spenrath appealed arguing there was substantial evidence in the record to support her claim for disability benefits. Fifth Circuit said the test was not whether there was substantial evidence supporting disability but whether there was substantial evidence supporting the denial which the Fifth Circuit said there was.
The Fifth Circuit also addressed Spenrath's argument that Guardian failed to credit her evidence. The Court found that Guardian addressed the evidence that Spenrath provided. The Court determined that Guardian correctly weighed the evidence and credited the opinions of its hired experts over the opinion of the treating physician.
The Court noted that Spenrath did not address the district court's award of attorney's fees on appeal. Instead Spenrath merely asked for her fees if successful. Thus the Court found that Spenrath waived any objection to the district court's award. The Court noted that Guardian asked for attorney's fees on appeal and the Court awarded Guardian $6000 in fees on appeal. The Court said that Guardian was successful on appeal and it noted that Spenrath's arguments on appeal were weak as the reason for the award.