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Thursday, November 6, 2014

Life Insurance Win in MN Supreme Court!

After years of hard work for Ms. Jacky Larson, our firm won a huge victory in the Minnesota Supreme Court on behalf of anyone with life insurance in Minnesota!

Minnesota Stat 61A.11 says that: "In any claim upon a policy issued in this state without previous medical examination, or without the knowledge or consent of the insured, or, in case of a minor, without the consent of a parent, guardian, or other person having legal custody, the statements made in the application as to the age, physical condition, and family history of the insured shall be valid and binding upon the company, unless willfully false or intentionally misleading."

Larson v. Northwestern Mutual was about what the language "willfully false or intentionally misleading" means. Does it mean simply that the information given on a life insurance application was incorrect, and the applicant should have known the correct information? Or does the insurance company need to prove the insured subjectively intended to lie? We argued that the insurance company needs to show more than that the information given in the application was wrong - and the Supreme Court agreed:

"To rescind a life insurance policy under Minn. Stat. 61A.11 for 'willfully false or intentionally misleading' answers in an insurance application, an insurer must prove that the insured intended to deceive the insurer."

We are thrilled at the result, if you'd like to view the entire opinion click here.

Monday, October 6, 2014

US Supreme Court to review ERISA case

The United State Supreme Court has accepted review of a new ERISA case involving the statute of limitations in retirement fund cases. (Tibble v. Edison Int'l, U.S., No. 13-550, cert. granted 10/2/14)

"The case presents the question: whether participants in retirement plans can hold plan fiduciaries liable for including higher-cost investment funds in the plan when those funds were initially chosen more than six years before the lawsuit, or whether these types of claims are barred by the six-year statute of limitations found in the Employee Retirement Income Security Act."

Check out the full article here.

Monday, September 22, 2014

Thursday, September 18, 2014

Happy Birthday, ERISA!

The Employee Retirement Income Security Act - E.R.I.S.A. (or as one judge put it, Everything Ridiculous Invented Since Adam) turned the big 40 this month! 

There has been no shortage of litigation since its enactment, as this article put it:

"In the past 40 years, lawsuits concerning ERISA have been filed by employees and plan beneficiaries, alleging their employers and/or plan fiduciaries have violated ERISA laws. Meanwhile, recent changes to ERISA laws have strengthened the requirements for people who act as plan fiduciaries. As more ERISA lawsuits are filed, more sections of the act are being interpreted and reinterpreted."

This is an active and interesting are of law, and gives our office the opportunity to help real people with real problems. 

Happy Birthday, E.R.I.S.A.!  

Check out the full article at:

Wednesday, September 17, 2014

Thursday, August 21, 2014

Assumptions, Calculations, and Formulas: Are My Benefit Payments Being Calculated Correctly?

The letter finally arrived from the insurance company letting you know you will begin receiving monthly disability benefit payments.  A week or so later, a check arrives in the mail.  The check is in an amount less than your normal paycheck.  You knew disability benefits were only a percentage of your pre-disability income, so this is not surprising.  You deposit the check, assuming the insurance company has correctly calculated what you are entitled to receive.  Should you be doing more to check the amount of the payment?

            How the insurance company or plan administrator interprets your disability insurance policy or plan to create a formula to calculate your monthly benefit amount can make a significant difference in the amount of benefits you will receive.  The inputs that determine your monthly benefit are generally: your pre-disability income, the benefit percentage, and your offsets.  But the insurance company decides, based on the language in your policy, what is considered pre-disability income and what is an offset.  Moreover, the insurance company/plan administrator decides how these calculations are done and in what order.

            What is the benefit percentage?  Most policies and plans provide for a disability benefit payment that is a percentage of pre-disability income.  What percentage is used depends on the policy/plan language and what elections you made at the time you enrolled in the plan or signed up for the insurance.  Always double-check that the insurer is applying the correct percentage.  For example, if your policy provides a basic benefit of 50% and an optional additional benefit of 65%, make sure that you get paid based on the higher percentage if you elected it and paid for it.

            What is “pre-disability income”? The next step is to define your pre-disability income because the benefit is going to be a percentage of that amount.  

For many people, “pre-disability income” is simple.  It is the employee’s hourly wage or annual salary.  But for some people, “pre-disability income” is less clear.  For example, with a salesperson, are his/her commissions “income” or is “income” only the hourly base wage?  Likewise, for a server in a restaurant, are tips “income?”  What about a doctor who teaches a class in addition to his/her clinical practice, is the money gained from teaching used to calculate “income?”  What about bonuses?  Whether or not these things are considered as part of pre-disability income could dramatically impact the amount of disability benefits.

What are “offsets”? Disability benefit payments will usually be reduced by income the individual receives from other sources while disabled.  Common examples of this would be Social Security Disability Insurance benefits received by the individual or his/her dependents, disability benefits from individual policies, or pension benefits.  

Your disability policy defines what income sources are considered “offsets,” and whether the amount you receive will be reduced by these “offsets.”  Sometimes it is unclear whether something you have received will be considered an offset.  For example, if you were disabled because of a car accident and you received money from a lawsuit based on the car accident, is that money an offset to your disability benefit payments?  What if you had to pay an attorney to represent you in the lawsuit, will your disability benefit only be offset by the amount you actually received from the lawsuit or will the attorney’s fee also be an offset?

The order of operations is important. The “order of operations” – the order in which these calculations are done-- also impacts your benefit amount.  For example, if your policy increases your monthly benefit over time to account for inflation (a cost of living adjustment), is that adjustment applied to your gross benefit (before offsets are applied) or to your net benefit (after offsets are deducted)?  Over time, this can cause a dramatic difference in the amount of your monthly disability benefit.

The point is… These are some decisions that are made by the insurance company, based on the language in the policy, as to how your monthly benefit is calculated.  When you begin receiving benefits, if you have any questions about how your benefit was calculated you can ask the insurance company for an explanation of how it calculated your monthly benefit amount.  If you disagree with how the benefit was calculated, you may be able to appeal to the insurance company and explain why your benefit should be calculated differently.  If you do not raise a concern about how your benefit was calculated when you first begin receiving benefits, you might waive this objection and be prevented from disputing the calculations at a later date. 
Contact an attorney specializing in employee benefits and ERISA law if you have questions about whether your benefit was calculated correctly based on the language in your policy.

Wednesday, May 7, 2014

MN Supreme Court Appearance in Larson v. NML et. al.

Kate argued at the Minnesota Supreme Court today in Jacky Larson v. Northwestern Mutual and CM Information Systems. Here we are in the state capital after the argument. We'll post an update with the result, and here is the oral argument if you are interested in watching the video:

Monday, March 10, 2014

Helpful Hints When Applying For Long or Short-Term Disability

Applying for disability benefits can be stressful. You’re sick and unable to work. You’re not sure about your financial future. You have forms to fill out, doctors to see, and decisions to be made. But being careful and thorough when filling out your application for disability benefits can prevent further hassle down the road because it improves your chances of being approved right away, and avoiding a lengthy and time-consuming appeal.

            Here are some helpful hints for filling out an application for short or long-term disability benefits. If you are still denied disability benefits after your application, we recommend speaking to an attorney experienced with appealing disability denials before appealing the decision to insure you know all your rights regarding administrative appeals.

#1. List all your health conditions

            Many people list only the one condition they feel disables them, forgetting the four or five other health issues they have that all interact to create the full picture of their health and abilities. It is important to list all your conditions so the insurance company will have all the information necessary to make its decision.

            If your disability is primarily physical, do not forget to list any psychological issues you have such as depression or anxiety in your application as well. The same goes for if your condition is primarily mental; do not forget to list your physical issues as well.

            Do not forget conditions such as: chronic pain, cognitive issues (problems with memory, not thinking clearly, or thought processing), physical or mental fatigue, migraines or chronic headaches, and other issues you may consider peripheral to your main health concern. The co-morbid effects of how these conditions interact and affect each other must be considered by the insurer.

#2. Provide All Relevant Medical Records

            Remember you are ultimately responsible to prove that you meet the definition of disabled in the policy and are therefore eligible for benefits, so you must make sure the insurer gets all the relevant medical records. When we as attorneys help claimants apply for benefits, we generally attach all relevant medical records to the application – we do not wait to see what the insurer will ask the claimant to provide. Insurers tend to request far fewer records than we provide. The insurer will request them from fewer doctors and for a shorter span of time. But it is not the insurer’s responsibility to get this information. So be proactive and make sure all medical records relevant to your health conditions are in the insurer’s hands when it reviews your claim.

#3. You Can Add Supplemental Pages

            A disability application is usually only one or two pages long – not nearly enough space to adequately explain a disabled worker’s numerous conditions, symptoms, and why he or she cannot work. Do not feel constrained by this lack of space. Simply write “See supplemental pages” in the form, and attach a type-written page fully and thoroughly answering the question asked.

#4. Explain Your Symptoms, Restrictions, and Limitations

            While it is important to list your diagnosed conditions, generally the insurer is most interested in what symptoms you actually experience, and how they prevent you from working. List all your symptoms, how severe they are, and how frequently you experience them. Then explain what specific functions you cannot perform at work because of these symptoms. Compare these two examples:

1.      I have severe migraines and my doctor says I cannot work.

2.      I have continuous migraines that have not stopped for three months. The pain fluctuates – 4 days a week the pain is a 6 on a scale of 10, and 3 days a week the pain is an 8 or 9 on a scale of 10. When the pain is above a 7, I am unable to leave my room. I turn all the lights off, pull the shades, and lay in the dark unable to sleep because of the pain. I am unable to leave my room, much less go to work and perform my duties. Also, see my neurologist’s statement supporting this application.

The second explanation explains how bad the pain is, how frequently it occurs, and why it keeps the claimant from working.

#5 What Your Doctor Needs to Say

            What your doctor says is key to whether you will receive benefits. It is important for your doctor to describe the frequency and severity of your symptoms, any measurement she or he has done of your symptoms and limitations, and list specifically what you cannot do and why. Compare the following:

1.      Betty can no longer work due to her chronic pain.

2.      I have been treating Betty for 10 years, and her chronic hip and back pain has gotten progressively worse. We have treated her with X, Y, and Z treatments which have not helped. According to the testing we have done in my office, Betty is unable to sit for more than 1 hour without being in extreme pain. She may then shift from sitting to standing, which helps for a short time. In a 12 hour period, she cannot sit for longer than 3 hours maximum.

This second example gives more detailed descriptions of what activity Betty has difficulty doing (sitting) and what her restrictions/limitations are for that activity (1 hour at a time, 3 hours maximum in one day.)

 If you have questions about how to gather necessary information, how to answer specific questions, or need help filling out the application, we have experience with the long and short-term disability application process and would be happy to speak to you. Contact the Law Office of Katherine L. MacKinnon to find out if we can help.

Monday, January 20, 2014

Hello to the newest member of our office - Akemi!

Our office has acquired a new member - Akemi, the betta fish! She has been a little quiet around the office so far, but we expect big things from her in the future.

Wednesday, January 8, 2014

Word to the Wise : When is investment advice subject to a fiduciary standard?

An interesting article here:

The article discusses how ERISA holds that people advising employees/retirees on investment accounts are held to a fiduciary standard - meaning they have to put the interests of the client first before their own. However, when is advice really investment advice, and when is it not? Since this is narrowly defined in ERISA, often advice does not meet the criteria of "investment advice", and therefore the advisor is not held to the standard of a fiduciary.

Moral of the story: be careful and do your own research when someone from your financial institution gives you advice or information. It may not always be what is in your own personal best interest - and the advisor does not always need to tell you the motivation behind their advice.

Be wary, investors!