A Call for Mental Health Parity in Disability Policies

December 18, 2023 | by Mehr Fairbanks Trial Lawyers

It is common for employees to obtain long-term disability coverage through their employment as an employee benefit. These policies are typically governed by a federal law called ERISA (this stands for the Employee Retirement Income Security Act). Having access to this coverage should provide comfort to employees in case the unthinkable happens: some life altering event that leaves you disabled and unable to continue working – physically or mentally. However, typically insurance policies contain language that employees aren’t often aware. For example, most disability insurance policies limit how long benefits will be paid for any conditions that the insurance company considers to be a “mental illness” or “mental health condition.” Most disability policies limit the maximum disability benefit period for mental health conditions to a maximum period of 24 months of benefits (although it is possible some policies have a shorter, or even longer, benefit period – every policy is different). Opposite of this, most policies have a much longer disability benefit period for conditions that are considered “physical” conditions (for example, most policies pay benefits to ages 65 or 67 for physical conditions).

Why is there such a disparity in how physical and mental conditions are treated by disability insurance carriers? There shouldn’t be – and other types of coverage (such as health insurance) do not have this disparity. However, action is now being taken to try and make this change for disability policies. The 2023 ERISA Advisory Council has taken a focus on this very issue this year. Their goal has been to “study the scope and impact of employee benefit plans’ limitations on disability benefits for mental health and substance use conditions.”

The ERISA Advisory Council has now urged Congress to pass legislation for mental health parity in disability policies. And, since this news, a large disability insurance carrier – Sun Life – has vocalized support for mental health parity. Sun Life, in a press release, stated:

Mehr Fairbanks Obtains Favorable Opinion From the Kentucky Supreme Court

July 24, 2023 | by Mehr Fairbanks Trial Lawyers

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On June 15, 2023, Mehr Fairbanks obtained a favorable opinion from the Kentucky Supreme Court related to a more than $15 million trial verdict in Magoffin County that Mehr Fairbanks obtained for its clients in October 2018. Following the jury’s verdict, the case was appealed by the insurance company. With the most recent decision, the Kentucky Supreme Court reversed a decision on appeal by the Kentucky Court of Appeals. The Supreme Court held that Kentucky case law “should not be construed as requiring a final judicial determination of coverage prior to filing a third-party tort claim against an insurer.” Importantly, the Court held that “the longstanding requirements of Wittmer v. Jones” continues to apply in insurance bad faith claims.

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Call us today at (859) 225-3731 or visit us here to request a free consultation with one of Mehr Fairbanks’ attorneys.

*The information contained within this post should not be considered legal advice or legal representation.

Mehr Fairbanks Receives Favorable Decision from the Kentucky Court of Appeals

April 25, 2023 | by Mehr Fairbanks Trial Lawyers

On April 21^st, the Kentucky Court of Appeals issued a unanimous opinion in favor of Mehr Fairbanks Trial Lawyers’ client, the Greenville Cumberland Presbyterian Church. The Court of Appeals opinion reverses and remands the Muhlenberg Circuit Court’s decision to enter summary judgment in favor of State Auto Property & Casualty Company. State Auto had issued an insurance policy to the church but when the church roof collapsed, State Auto denied the claim. The Court of Appeals ruled that there was in fact insurance coverage for the church’s loss under the State Auto policy.

Mehr Fairbanks partner Bartley Hagerman wrote the briefs and argued the case before the Court of Appeals.

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Exclusions, Limitations, and Offsets Oh My!: Is the Total Value of Your Disability Insurance Benefits At Risk?*

February 27, 2023 | by Mehr Fairbanks Trial Lawyers

Disability insurance is a unique type of insurance that protects a person’s ability to earn a paycheck if that person experiences a serious injury or illness. Disability insurance is meant to provide employees with a way to receive a portion of their expected income if they later become unable to work. Disability insurance is often categorized as either short-term or long-term. The primary difference between short-term and long-term disability plans are the periods of time a person may receive benefits due to her inability to work. Short-term disability plans usually work in tandem with long-term disability plans. Generally, once short-term benefits are exhausted, then a long-term disability policy would become effective in an effort to continue providing an employee with income until she is able to return to work. Some long-term disability plans may last for the lifetime of the policyholder, most will usually provide coverage for approximately thirty-six (36) months.

Most employers provide some type of disability insurance coverage for their employees. It might be time to refresh your memory on what your employer provides you with specifically. In an unpublished opinion, the Ninth Circuit recently determined that an employer provided disability insurance company was within its rights to reduce an employee’s disability benefits by $800,000. The $800,000 came from a recent personal injury settlement the employee received on a completely unrelated matter. Haddad v. SMG Long Term Disability Plan, No. 16-CV-01700-WHO, 2021 WL 2187979 (E.D. Cal. May 28, 2021).

The case turned on the legal distinction between “offsets” and “exclusions” and “limitations” in regard to long-term disability plans. This marginal difference may be the difference between receiving the anticipated total value of long-term disability benefits or having that total value later diminished. Exclusions and limitations carve out areas from the scope of an insurance policy’s coverage. Offsets reduce the total amount owed for covered claims.

Mehr Fairbanks Trial Lawyers Obtains Over $5 Million Settlement in an Insurance Bad Faith Case

February 13, 2023 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks Trial Lawyers obtains a $5,750,000 settlement in a bad faith case against an insurer!

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Bartley K. Hagerman Chosen as a Top 40 Under 40 Trial Lawyer!

February 10, 2023 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks’ Partner, Bartley K. Hagerman, has been recognized as a Top 40 Under 40 Civil Plaintiff Trial Lawyer by The National Trial Lawyers! The National Trial Lawyers: Top 40 under 40 is by invitation only and is extended exclusively to chosen trial lawyers who practice civil plaintiff and/or criminal defense law.

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Elizabeth A. Thornsbury Named A Member of the 2023 Lawyers of Distinction

February 8, 2023 | by Mehr Fairbanks Trial Lawyers

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Mehr Fairbanks’ Partner, Elizabeth A. Thornsbury, has been nominated and accepted as a Member of the 2023 Lawyers of Distinction! Lawyers of Distinction Members are selected based upon a review and vetting process by a Selection Committee using factors to recognize the nominee’s achievements and peer recognition.

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What is the True Cost of Socially Conscious Investing?

February 3, 2023 | by Mehr Fairbanks Trial Lawyers

Towards the end of last year, the Department of Labor (“DOL”) released its final rule titled, “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights.” 87. Fed. Reg. 73822 (Dec. 1, 2022) (the “Socially Conscious Investing Rule”). This new rule is now in effect and the DOL stated one of the purposes of its new rule was to focus on “the chilling effect and other potential negative consequences caused by the previous rule, ‘Financial Factors in Selecting Plan Investments,’ 85 Fed. Reg. 72846 (Nov. 13, 2020), with respect to the consideration of climate change and other environmental, social, and governance (“ESG”) factors.” The Socially Conscious Investing Rule provides guidance related to the fiduciary duties of both prudence and loyalty, as applicable to the selection of plan investments. This new rule specifies that a “fiduciary’s determination with respect to an investment or investment course of action must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis.” 29 CFR § 2550.404a-1(b)(4).

However, not everyone agrees with the Socially Conscious Investing Rule or its future impact on retirement plans managed by employers. For instance, twenty-five Republican state attorneys general formed an alliance and filed a lawsuit against the DOL. Kentucky is one of the states that joined in this lawsuit. In their complaint, the Republican attorneys general alleged that the new Socially Conscious Investing Rule violated the Employee Retirement Income Security Act (“ERISA”). In their complaint, the attorneys general are requesting that the U.S. District Court for the Norther District of Texas makes a declaration that the Socially Conscious Investing Rule is in direct violation of ERISA. “The 2022 rule undermines key protections for retirement savings of 152 million workers — approximately two-thirds of the U.S. adult population and totaling $12 trillion in assets — in the name of promoting environmental, social, and governance factors in investing, including the Biden administration’s stated desire to address climate change,” the complaint stated.

Their 46-page complaint states that in 2014, in Fifth Third Bancorp v. Dudenhoeffer, the Supreme Court unanimously concluded that ERISA requires fiduciaries to consider financial benefits and not any nonpecuniary benefits. Further, their complaint asserts that the exclusive purpose that ERISA fiduciaries must pursue are financial benefits. Also, the legislative history of ERISA supports the idea that the financial benefits alone should be the sole and exclusive purpose of the statute itself. ERISA’s fiduciary duties are the highest duties recognized by the law and therefore require that fiduciaries act with undivided loyalty towards the beneficiaries.