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A recent Seventh Circuit decision illustrates that pursuing a claim for disability benefits is not as straightforward as claimants would hope, and that claimants must follow ERISA’s requirements to the letter in order to obtain the benefits they deserve. In Schorsch v. Reliance Standard Life Ins. Co., No. 10-3524 (7th Cir. Aug. 28, 2012), Reliance paid Schorsch’s disability benefits for almost 14 years before it denied her claim based on an independent medical evaluation (“IME”). Schorsch’s attorney sent Reliance a letter indicating his intent to appeal the denial, but never submitted a formal appeal. Reliance subsequently sent Schorsch a letter stating that its decision to deny the plaintiff’s benefits was final as she had not filed her appeal within ERISA’s prescribed time frame. Schorsch sued and Reliance revealed during discovery that it had lost the administrative record, including the surveillance that it had conducted of Schorsch. Discovery also revealed that Reliance’s denial letter misrepresented that a particular vocational specialist who in fact never looked at Schorsch’s file issued a report supporting termination of benefits.

The Court ruled in favor of Reliance, holding that Reliance’s loss of the plaintiff’s claim file (and other errors in its claim handling) did not excuse the plaintiff’s failure to file her claim within the required time period. See ERISA Regulations, 29 C.F.R. 2560.503-1(h)(3)(i). The Court stated “Schorsch cannot circumvent ERISA’s administrative remedies by simply pointing to errors in Reliance’s claims termination process. Flaws in Reliance’s termination notice and other errors become relevant only if Schorsch reasonably relied on them in failing to request a review of its decision to terminate her disability benefits…or if Reliance’s missteps denied her meaningful access to a review.” The court ruled that Reliance’s errors were unrelated to Schorsch’s own failure to file a timely appeal.

The Schorsch case illustrates that ERISA can be difficult to navigate, with numerous traps for the unwary and protections favoring insurers. Do not jeapordize the benefits you deserve by venturing into these waters on you own. We at Bonny G. Rafel are experts in this ever-developing area of the law, and will zealously guard your rights as an insured under your ERISA policy.

Over 2.7 million Americans suffer from Epilepsy. Its disabling affects are well known, from petit mall seizures which incapacitate patients for brief periods to grand mal seizures which can lead to physical injuries, coma, and death. While some epilepsy patients benefit from medication which allows them to function in their daily lives, others suffer from “refractory epilepsy” which does not respond to treatment.

For those with refractory epilepsy, new research suggests there may be hope on the horizon. See New York Times, June 4, 2012. Scientists have uncovered what may be a correlation between epilepsy and inflammation–the defensive response of the immune system to injuries or foreign bodies– in the brain. While inflammation has been previously linked to seizures resulting from encephalitis, and to infantile spasms in children, the new studies suggest that inflammation may be a component of seizure disorders in general. Scientists have hypothesized that seizures are either caused by an immune response triggering neurons in the brain, or by the distracting effects of a brain injury on glial cells, which regulate brain activity.

Scientists have now developed a molecule known as VX-765, which is designed to work on inflammatory processes. While the drug trial is in its early stages, it appears that the drug reduces the number of seizures in those with refractory epilepsy over time.

Prudential is facing a class action suit for fraud in the United States District Court for the District of New Jersey for selling Buy-Up Long Term Disability Insurance, Supplemental Term Life Insurance, and Supplemental Accidental Death & Dismemberment policies to employees of defense contractors working overseas without disclosing the presence of a wartime exclusion in the policies. New Jersey Law Journal, May 21, 2012. Specifically, the policies state that Prudential will not cover losses “due to war, declared or undeclared, or any act of war.” As Prudential was allegedly aware that it was selling these policies to individuals supporting military operations in Iraq or Afghanistan, the Complaint alleges that Prudential wrongfully profited from selling policies, as it “knew that the [policies containing the exclusion] would be of negligible value and/or of no value to” plaintiffs who became disabled, dismembered, or died while working in Iraq of Afghanistan. (Complaint, paragraphs 23, 49, and 74).

The Complaint alleges losses based on plaintiffs’ payments of premiums to Prudential, and Prudential’s denial of claims based on the wartime exclusion. Highlighting the case are the claims of the class representatives. Stephen Wolfe was offered a benefits package when he accepted employment with a defense contractor at the Kirkuk airbase in Iraq, and he additionally selected buy-up coverage and supplemental term life insurance, which combined cost him nearly 30 dollars a month. Alexander Menkes, a retired Major from the United States Army Reserves, worked as an aviation Physician’s Assistant/Flight Surgeon in Kirkuk, and purchased both buy-up long term disability and accidental death and dismemberment insurance. While serving in Iraq, he became disabled due to a lumbar spine injury, exposure to tuberculosis requiring a long-term course of medication, and post-traumatic stress disorder stemming from his exposure to the fighting. Prudential refused to pay his disability claim under the wartime exclusion in the policy. The plaintiffs brought suit under the New Jersey Consumer Fraud Act; New Jersey Truth in Consumer Contract, Warranty and Notice Act; state deceptive practices acts; and common law fraud.

While it remains to be seen how this case will play out in the District Court, a victory for the plaintiffs would send a message to insurance companies that the courts will heavily scrutinize insurance transactions and will not allow insurers to profit off of illusory deals.

Sleep apnea has been known to be a disabling and potentially life-threatening condition. According to two new studies recently presented to the American Thoracic Society, patients should add cancer to the list of the disease’s potential complications. See New York Times, May 20, 2012.

The results are startling. Researchers in Spain found that patients who experienced a blood oxygen level below 90 percent at night for up to 12 percent of the time they slept were 68 percent more likely to develop cancer than those who did not experience breathing problems at night. Researchers at the University of Wisconsin School of Medicine and Public Health–who had been running sleep studies since 1989–determined that patients with moderate sleep apnea were twice as likely, and those with severe apnea were 4.8 times more likely, to die of cancer over the course of the study.

The results of these new studies are especially telling, since researchers controlled for common variables such as age, smoking, alcohol use, weight, and lack of exercise. The researchers determined that the connection between sleep apnea and cancer remained even in the absence of these variables.