Do you know all the information on your insurance policy?

LaBovick Law — Mon, 22 Apr 2013 08:29:01 -0500

This week the Supreme Court of the United States handed down an important decision facing all personal injury litigants and the attorneys who represent them. McCutchen was a US Airways employee who was injured by a third party. McCutchen had a company health insurance policy that paid his medical bills. The policy is one commonly referred to as an ERISA policy. These types of policies typically call for 100% reimbursement of benefits paid as a result of the negligence of a third party.

Non-ERISA policies follow the Medicare reduction formula. These types of reductions, in most instances, result in some recovery for the injured party. The ERISA policies can often result in no recovery for the injured after attorney’s fees and costs are accounted for.

In the McCutchen case, US Airways wanted the entire settlement to cover its benefits paid, leaving nothing for the injured/insured or the attorneys. US Airways attempted to take the entire settlement amount by asserting priority over attorney’s fees and costs. In denying this claim, the Court stated that unless the policy language specifically eliminated the attorney’s fees and costs, then the court would not disturb the concept of a common fund, which up to this point protected attorney’s fees and costs. However, the message the Court has sent is that the drafters of the ERISA policies are left open to creating policy language that could prevent the recovery of attorney’s fees and costs.

It is expected that more and more of these policies will contain this language. The fallout from this is that many injured people will have a hard time finding counsel if they have an ERISA policy that contains a pure 100% reimbursement clause. This has a downside for the carrier as well. Without counsel for the insured, the carrier has no chance of reimbursement. This is a classic case of “be careful what you wish for”…you may get it.

Supreme Case Rules on Groundbreaking CIGNA Corpv. Amara

LaBovick Law — Fri, 17 Jun 2011 14:12:42 -0500

Retirement savings can be a complicated and stressful issue. Employees typically rely on a pension plan to help guarantee their long term savings. With so much riding on retirement policies, plan holders need to be fully aware of their policies and stay apprised as to the significant legal changes regarding retirement coverage.

CIGNA CORP v. Amara is a civil case that stemmed from CIGNA employees bringing suit against CIGNA for changes made to their ERISA (Employee Retirement Income Security Act) plan. The company notified employees of the change via the company newsletter, which suggested that the changes would lead to greater benefits to employees.

The employees contended that such improvement did not exist and took their objections to court. The case was originally heard in a district court, which sided with Amara et. al., and CIGNA appealed to the Supreme Court.

]]>The Supreme Court's decision validated the lower court’s ruling, agreeing that CIGNA had misled employees and not provided sufficient information regarding the true impact of the changes. This verdict is a real win for employees in all industries since many employers have tried modifying their pension plans and other insurance policies recently in an attempt to save money and streamline costs. The CIGNA case gives employees the groundwork needed to take a stand against such changes, as long as it can be proven that the changes were improperly enacted.

However, the Supreme Court's final ruling was not a total win for employees. The CIGNA case set the precedent that employers are not required to change a plan even if modifications are poorly communicated. While CIGNA was ordered to pay compensation to employees for being negligent in communication, the plan itself did not have to be changed, therefore staying in place for future employees.

While the ruling on CIGNA CORP v. Amara does not solve the many problems associated with a pension plan, the case does provide some strong precedents for all employees regarding their rights. Employees should be vigilant regarding changes to their ERISA policies. Likewise, employers should be very careful in their communication of changes. Ultimately, the ruling is a lesson in clarity and awareness, empowering all parties to be certain and secure in all their policy decisions.

If you have an ERISA Plan issue that you can't resolve, contact an experienced ERISA lawyer to discuss your case. ERISA disability claims can be complex and hard to navigate. A qualified ERISA disability insurance lawyer can cut through the red tape and get the claims processed appropriately. While you are recivering from your disability, you should not be dealing with complex matters that can be frustrating and cause added stress. Turn the problem over to an experienced disability insurance lawyer that can make the insurance company settle your bills in a fair and appropriate manner.

Click on the following link to read more on Something for Everyone: 'CIGNA Corp. v. Amara' - Law.com

ERISA - Injury Law Blog

Do you know all the information on your insurance policy?

Supreme Case Rules on Groundbreaking CIGNA Corpv. Amara