Your Money Lost; MetLife’s Long-Term Disability Scam in MetLife v Glenn

We write a lot here about group long term disability policies and what bogus products they are. So much so, it is financially unsound to trust these policies to take care of you should you become injured, sick or disabled.

A particularly egregious example of just how worthless group policies are is seen in a case that made it to the Supreme Court (please note how the dissents fall in strict Citizen’s United lines) in Metropolitan Life Insurance Company v Glenn where MetLife was both the insurer and administrator of the group plan that insured Ms. Glenn–a huge conflict of interest. It’s like having the fox watch the hen house.

The plan grants MetLife (as administrator) discretionary authority to determine whether an employee’s claim for benefits is valid; it simultaneously provides that MetLife (as insurer) will itself pay valid benefit claims. App. 181a–182a.

MetLife sought Supreme Court review because of an earlier decision that forced MetLife to pay Ms. Glenn her benefits. MetLife spent a lot of money on this because of the precedent it set: An insurance company had to make good on a long-term disability claim and pay benefits to a person who became too disabled to work full time.

Ms. Glenn was a Sears employee who was diagnosed with severe dilated cardiomyopathy. She had dutifully paid her premiums and now she needed to use her benefits since she was too sick to work due to heart failure.

Respondent Wanda Glenn, a Sears employee, was diagnosed with severe dilated cardiomyopathy, a heart condition whose symptoms include fatigue and shortness of breath. She applied for plan disability benefits in June 2000, and MetLife concluded that she met the plan’s standard for an initial 24 months of benefits, namely, that she could not “perform the material duties of [her] own job.” Id., at 159a–160a. MetLife also directed Glenn to a law firm that would assist her in applying for federal Social Security disability benefits (some of which MetLife itself would be entitled to receive as an offset to the more generous plan benefits).

MetLife directed Ms. Glenn to a law firm to make sure she got Social Security so they could off-set her benefits. CIGNA and all the other insurers do the same. See my earlier blog postings at Illness and Insurance Hell. Just follow the money.

MetLife received the bulk of those retroactive benefits due to offsets written into the language of the policies themselves. These group disability policies are, in essence, bogus products; don’t waste your money.

The Social Security Administration consequently granted Glenn permanent disability payments retroactive to April 2000. Glenn herself kept none of the backdated benefits: three-quarters went to MetLife, and the rest (plus some additional money) went to the lawyers.

After the first two years of Ms. Glenn’s policy, MetLife decided to reverse themselves:

To continue receiving Sears plan disability benefits after 24 months, Glenn had to meet a stricter, Social-Security-type standard, namely, that her medical condition rendered her incapable of performing not only her own job but of performing “the material duties of any gainful occupation for which” she was “reasonably qualified.” App. 160a. MetLife denied Glenn this extended benefit because it found that she was “capable of performing full time sedentary work.” Id., at 31a.

On one hand, MetLife forced Ms. Glenn to apply for Social Security benefits, sent her to a law firm to help receive them and took taxpayer dollars to offset the plan she paid premiums for BUT when it came time to continue paying those benefits after the first two years, MetLife “itself had to determine whether she could work, in order to establish eligibility for extended plan benefits, it found her capable of doing sedentary work and denied her the benefits.”

This was what the Social Security agency said as well, but with help from the law firm they sent Ms. Glenn to, MetLife pushed, and received, tax payer dollars in the form of Social Security dollars. They burden the Social Security system.

The Supreme Court found this questionable as well and said so:

In particular, the court found questionable the fact that MetLife had encouraged Glenn to argue to the Social Security Administration that she could do no work, received the bulk of the benefits of her success in doing so (the remainder going to the lawyers it recommended), and then ignored the agency’s finding in concluding that Glenn could in fact do sedentary work. See id., at 666–669. This course of events was not only an important factor in its own right (because it suggested procedural unreasonableness), but also would have justified the court in giving more weight to the conflict (because MetLife’s seemingly inconsistent positions were both financially advantageous). And the court furthermore observed that MetLife had emphasized a certain medical report that favored a denial of benefits, had deemphasized certain other reports that suggested a contrary conclusion, and had failed to provide its independent vocational and medical experts with all of the relevant evidence. See id., at 669–674. All these serious concerns, taken together with some degree of conflicting interests on MetLife’s part, led the court to set aside MetLife’s discretionary decision.

MetLife also did the same thing CIGNA did to us, namely pick out information that bolstered their point of view of the reality of my husband’s disease, Multiple Sclerosis:

The Court of Appeals ultimately set aside MetLife’s denial of benefits in light of a combination of several circumstances…(3) MetLife’s focus upon one treating physician report suggesting that Glenn could work in other jobs at the expense of other, more detailed treating physician reports indicating that she could not; (4) MetLife’s failure to provide all of the treating physician reports to its own hired experts; and (5) MetLife’s failure to take account of evidence indicating that stress aggravated Glenn’s condition. See id., at 674.

If you are wondering why this happens, it’s simply due to corporate greed and money–lots of money. These group policies are huge money makers for the large health insurance companies and they rake in billions in profits each year from them. Paying out claims to people with Multiple Sclerosis is not what they want to do–their interests lie in fattening the bottom line.

As financial tools, they are worthless and a waste of your hard-earned dollars. You have alternatives such as private policies. Save your money and look elsewhere. And if you think these policies need to be better regulated or ERISA should be removed or rewritten as law, write your members of Congress. That’s what we pay them for.

Your health and well-being do not matter to large corporate entities no matter how much they try to spin it otherwise. See AHIP.

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The 11 Federal Judges Attending the 2011 Defending and Managing ERISA Litigation Conference.

The American Conference Institute assembles a yearly “defending against ERISA claims” conference usually held in New York City. This year’s conference is at the New York Marriott Downtown.

If you have Multiple Sclerosis or any other disease that forced you to fight for your benefits because companies like CIGNA lied (not hyperbole) to prevent your claim, then you know all about ERISA or the Employment and Retirement Income Security Act of 1974. Unfortunately, ERISA has had negative consequences. A full explanation, written by an ERISA expert, can be found here.

But you may not know that the very same federal judges who may hear your case attend these conferences where they help coach insurance companies, plan providers and other attorneys on how to defend against ERISA claims. In other words, how to make sure a company like CIGNA doesn’t have to fulfill their contractual obligations and pay your claim. From the conference brochure:

An ERISA Moot Court: Featuring top defense attorneys arguing some of the hottest and most common issues facing ERISA practitioners today, panels of renowned ERISA jurists will critique arguments, question our litigators and help all attendees understand how to successfully convey their positions to the court.

The federal judges, the ones deciding your cases, are going to going to participate in a moot court to help defend against ERISA claims? How does that square with remaining impartial as part of the judges’s code of conduct? And our favorite here at the MS Activism Foundation:

Breaking Up Is Hard to Do: A Focus on Severance Plan Litigation including Triggering Events, COBRA Hang-Ups, and the Other Litigation Issues that Arise in Separation Situations.

CIGNA had a big loss this year in CIGNA v. Amara, even though they are spinning it otherwise, so of course, CIGNA’s senior counsel, Christina McNally will be in attendance at the conference.

Fidelity Investments, my husband’s former employer, is listed on the last page as being in attendance as well. I could not find a name though. Last year it was their very own senior counsel, (and Paul’s fellow Boston College alum) Laura Tholen.

Here are the names and districts of all the federal judges who are attending this year’s conference. And here is a link to the PDF of the 2011 conference. If you are fighting for your claim, and see your judge, send them a letter. Tell them that you know what they’re doing and that it certainly does not appear impartial.

Here are the Codes of Conduct for United States Judges and be sure to ask about CANON 3: A JUDGE SHOULD PERFORM THE DUTIES OF THE OFFICE FAIRLY, IMPARTIALLY AND DILIGENTLY.

Hon. Daniel E. Knowles, III U.S. Dist. Ct., E.D. La.

Hon. Morton Denlow U.S. Dist. Ct., N.D. Ill.

Hon. Matthew Kennelly U.S. Dist. Ct., N.D. Ill.

Hon. William S. Duffey, Jr. U.S. Dist. Ct., N.D. Ga.

Hon. Viktor Pohorelsky U.S. Dist. Ct., E.D.N.Y.

Fernando J. Gaitan, Jr. U.S. Dist. Ct., W.D. Mo.

Hon. Timothy C. Batten, Sr.U.S. Dist. Ct., N.D. Ga.

Hon. Robert Jonker U.S. Dist. Ct., W.D. Mo. (I think the American Conference Institute meant MI not MO.)

Hon. Richard G. Stearns U.S. Dist. Ct., D. Mass.

Hon. John Coughenour U.S. Dist. Ct., W.D. Wash.

Hon. Robert B. Collings U.S. Dist. Ct., D. Mass.

The GOP using states’ rights to repeal health care reform. What about ERISA?

The GOP loves big business more than they care about those constituents who elect them. Even thought the GOP uses states’ rights as a big rallying cry for repealing health care reform, they have been totally against amending the federal law that strips the states of their rights–when it comes to health insurance.

Let me explain.

ERISA laws or the Employee Retirement Income Security Act of 1974 set standards for pension plans so that when employees retired (and retire even though 401k plans have replaced most pension plans) they can breathe some sigh of relief that their employers did not raid their pension plans leaving them penniless for retirement. That’s one of the things it does, but it does a lot of other things as well. It covers employer-based health insurance plans, 401k plans and some severance plans.

The unintended consequences of having a federal law cover these things, especially health benefits, are that these federal laws pre-empt state laws.

The law limits the abilities of state legislatures to regulate many types of health insurance, it restricts the kinds of remedies that states can authorize (such as a patient’s right to independent appeal of denials or to see specialists) and it can limit the ability of states to experiment with novel ideas for health care solutions.

Two real-life examples of how our state laws and consumer protections are meaningless if we have been abused by our health insurers: The first one is in the Michael Moore movie, Sicko, and features a child named Annette Noe. This is also brought up in Wendell Potter’s book, Deadly Spin. Annette needed cochlear implants in both her ears but CIGNA only paid for one, calling implants in both ears, “too experimental.”

Think Progress featured another child in November of last year, Madison Leuchtmann, who CIGNA also refused to pay for her cochlear implants with the knowledge that this child may remain deaf the rest of her life if she did not receive the implants:

Unfortunately, the Leuchtmann’s family insurer, Cigna, has issued “one denial after another,” flatly refusing to cover the $20,000 bill for the implant. In a written statement to the local news station Fox 2, Cigna explained, “It is not unusual for commercial benefit plans to exclude hearing assisted devices,” prompting Dr. Clary to angrily respond, “This is obviously medically necessary. You have a child that has no ear canals!” Dr. Clary also told Fox 2 that he sees these sort of denials “on a weekly basis.” Watch Fox 2′s report:

Now in Annette Noe’s case, her father used the power of Michael Moore’s movie to get Annette her implants. I have no follow up news for Madison. But more importantly here, could Madison’s parents sue CIGNA to make them pay for her implants? The answer is no. And that’s because of ERISA.

And why is that? Let’s turn to an ERISA expert, an attorney, Richard Johnston and his blog, The Problem is ERISA:

As of now we have a situation where the law tells insurers they face no meaningful consequences if they deny care improperly or even commit outright fraud. As one federal judge has commented, “if an HMO wrongly denies a participant’s claim even in bad faith, the greatest cost it could face is being compelled to cover the procedure, the very cost it would have faced had it acted in good faith. Any rational HMO will recognize that if it acts in good faith, it will pay for far more procedures than if it acts otherwise, and punitive damages, which might otherwise guard against such profiteering, are no obstacle at all.” Insurance companies, of course, are not charities, but corporations; their boards are subject to a fiduciary duty to maximize shareholder value. If it is possible to accomplish this by mistreating insureds, then it follows insurers will do precisely that (and believe me, they do).

There is no incentive, financially speaking, to pay for benefits and these include treatments, transplants and disability benefits that are all covered under the ERISA umbrella.

Where does that leave the GOP who are so “anti-big government but pro-states’ rights? They side with those who would keep these laws in tact every time: The Health Insurance Industry. Disturbing about both groups is their love of thumbing their noses to the new (unconstitutional, as they say) federal law while remaining steadfast on guarding another federal law that hurts the common good. I guess it’s only unconstitutional when it hurts the corporate common good.

Every time ERISA has come up in Congress for some tweaking, guess what has happened? AHIP hires lobbyists, front groups (like this National Coalition on Benefits, they are a real gem) and this group; they all go into action and We, the People, are left in serfdom at the corrupt feet of the Insurance Lords.