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10 Reasons ERISA is an Unfair Law for Disability Insurance Claimants (Ep. 15) - YouTube
Channel: Dell Disability Law
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(upbeat music)
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- Every single day we
get multiple calls from
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individuals who have
longterm disability policies
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that are governed by ERISA.
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Now, we've spoken a lot on
this website in multiple
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videos about ERISA, and ERISA stands for
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the Employee Retirement
Income Security Act.
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But we wanted to highlight in this video
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a couple different
reasons why we think ERISA
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is such an unfair law
for disability claimants.
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So I'm joined today by
attorney Steve Jessup.
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- Hello.
- [Gregory] And together we've
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handled hundreds of ERISA
appeals for claimants
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all around the country.
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And, I guess, Steve,
you can start by what's
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in your opinion, probably
the number one reason
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why you think ERISA's an unfair law?
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- Well, it's pretty hard just
to limit that to one specific
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since there are so many.
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I feel, probably, the fact
that makes it so unfair
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is the standard of review
in the case that you have to
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actually file a lawsuit.
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The base standard review
is what they call arbitrary
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and capricious or whether
or not the insurance company
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had a reasonable basis to deny the claim.
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And, unfortunately, the
way a lot of these policies
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are written, even the law is changing,
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the insurance company is given the luxury
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of being able to interpret
the policy as they see fit.
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So quite often what can
happen is they have a doctor
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that they hired who says,
"No, I think this person,
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"you know, doesn't have
restrictions and limitations
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"that would prevent him from working."
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The next thing you know,
they deny the claim.
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You can try to appeal it,
but at the end of the day,
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if you have to go into
litigation, the judge isn't
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gonna start off by trying
to determine whether or not
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he thinks you're disabled,
he wants to see if the
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insurance company acted
reasonable in denying the claim.
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- So that's when the policy
has a discretionary clause,
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which essentially says that
the company has the opportunity
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to make the decision and
administer the claim.
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And I think we just, I know
we just posted a blog entry
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recently about a bill that's
pending in California right now
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on Arnold Schwarzenegger's
desk to have him approve a law
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that would not allow for
insurance companies to have
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discretionary clauses in policies.
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Which would probably make,
that would give the judge
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the opportunity to review
the claim on his own
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and make a decision whether
or not he thinks the person
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is disabled.
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I think the second, or
another reason that ERISA's
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an unfair law is the fact
that you have to go through
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this administrative process
before you can file an appeal.
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And what that means is that
once your claim is denied,
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you absolutely have to file
an appeal within 180 days
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otherwise you can't file a lawsuit.
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Another way to look at is
once your claim is denied,
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you can't just say, "Screw
you, insurance company,
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"I'm gonna file a lawsuit."
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Whereas, if you had an
individual disability policy
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you have to opportunity to do that.
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So I think that's a
significant disadvantage
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'cause when you're a
longterm disability claimant,
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your claim gets denied, and
you don't have any resources,
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no money coming in, especially
from the disability carrier,
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and now you've got to
appeal to the company
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and then they have 45
days plus two more 45 days
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extensions, if they want.
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You've got to wait for
them before you can even go
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to the court.
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And then when you get to the court,
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it's usually, you know, nine
months to a year and a half
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because you're stuck in
federal court on ERISA claim.
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What's another reason that
you think ERISA's unfair?
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- I think one of the other big reasons is
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is after your claim has
been denied on appeal
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and you have no more
administrative remedies
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and you're looking to file the lawsuit,
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like we've discussed in other videos,
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it's very, very, very, very hard,
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I would say almost impossible,
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to get any new information.
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And so in preparing your
appeal and submitting it,
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if you don't put in the
additional information
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that would help strengthen the claim:
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doctors' reports, you know,
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letters that support
whatever the case may be,
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you don't have the chance then to go back
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and get that in.
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So, when you said, the
judge may not get it,
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you may not have your trial
until about a year out,
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there's a whole year of stuff
that could have happened.
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I know we've said before,
you could get hit by a car
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at three weeks after, but
the judge can't take that
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into consideration 'cause
all he can look at is that
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snippet in time from
when you filed the claim,
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to when the final denial came.
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So that's another reason,
it's just such a weird,
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you know, scope that has to be reviewed.
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- I mean, under ERISA,
that appeal is your trial
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because if you don't get it
into the administrative record,
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basically, you're not gonna
have another opportunity
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to get any more information to the judge.
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There are some exceptions under the law,
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but they're very rarely ever
granted where you can get
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additional information.
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And even going as far
as, if you get denied,
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you go through your appeal
and then three weeks later
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you have surgery, there's
almost no way that the judge
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is even gonna know about that because the
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administrative record is sealed.
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I think probably one of
the most offensive things
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about ERISA is the fact
that you, basically, have,
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there's no penalties for the
conduct of the disability
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insurance company if they deny your claim.
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For example, there's no
bad faith and there's no
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punitive damages, whereas if
you had an individual claim
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and the disability insurance
company acts egregiously,
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or recklessly, or completely
wrong in denying your claim,
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you may have extra contractual remedies.
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In this case, with an ERISA claim,
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your best case alternative,
if you win the case is
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number one, you get your benefits back
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and number two, you might get
some interest from the court,
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you may get some costs,
and lastly, you may have
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your attorney's fees, which
is completely discretionary
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with the court.
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Now, we talked about
attorney's fees recently,
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and I wrote another blog
entry just recently on this
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heart case where the standard
of review for attorney's fees
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was changed slightly and
it may become more lax
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for claimants to get attorney's
fees if they prevail,
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but that's still to be determined.
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But there's no consequences
for the disability
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insurance company.
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So if they deny a claim,
yeah, they've got to pay
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the other side's attorney's
fees if they lose,
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maybe some interest,
which is usually very low,
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but there's not gonna be a $100,000
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or multi-million dollar
award for their conduct.
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So basically, they can get
away with whatever they want to
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do with no, with no implications.
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Um, what else do you think
about ERISA that's unfair?
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- I think even the style
of the trial when you do
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get to trial, there's no
juries, it goes straight into
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federal court and a judge.
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He's gonna review it, no
testimony's gonna be taken,
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they won't hear from
your doctors, they won't
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hear from you.
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And in some cases, the judge
can even just rely upon
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the trial briefs that are
filed by the attorneys
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in trying to render opinions.
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So you don't, I guess,
get that feeling of your
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day in court that, you
know, the movies or TV shows
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like to make it out, where
people are gonna hear your
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case and they're gonna understand.
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That's just unfortunately, not
available to you under ERISA.
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- Right, I think that's
why, again, you've got to
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put in a lot of testimony
or witness statements,
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whatever you want, in that
administrative record.
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I mean, how many people have
called us where they didn't
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have any outside testimony,
they didn't put in their own
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statements, not even from
their significant other,
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closest friends, co-workers or anything,
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and basically, then our hands are tied
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and it's very hard for us to help them
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in those situations.
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- That's true, 'cause
in the denial letter,
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it says you have 180
days to file an appeal,
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they don't tell you the gravity
of what that appeal means,
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they just tell you.
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And we'll get calls from people saying,
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"Well, I already appealed
it, you know, a week after
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"and they denied it again."
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Well, in that appeal, I see
the appeal that they submit
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and it says, "I'm appealing your decision.
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"I think you're wrong,
here are my new records."
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You know, so they're not
taking the opportunity
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to really, you know, put in
that information necessary
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for later on, possibly, in litigation.
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- Right, and much like you
said, that you don't have
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your day in court, there's no jury trial,
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no testimony from the claimant.
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There's also the situation
where when you submit
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an appeal to the carrier
and then the appeal
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comes back and you get this final denial,
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usually during your last
appeal, they'll have another
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doctor review the claim
or they'll do an IME exam
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of you and get the results,
and then you end up
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getting the claim denial back
and there's no more appeals
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for you, there's nothing
else you can do as claimant.
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You never have the opportunity
to even file a response
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to that review by the
insurance company or the review
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by the independent medical exam doctor,
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or you don't have the
opportunity for your doctor
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to comment on what the
independent medical exam
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doctor did.
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So the insurance company gets
the last word every single
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time and you're left holding
the bag and then the case
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goes to court and the judge says,
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"Well, I see what the
insurance company did.
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"I think they may have acted reasonably,
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"therefore, there's no way
I can reverse your claim."
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So, you know, this is a major problem.
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There's a lot of federal
legislators that are aware
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of that, we've spoken to
several, we've had meetings
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in Washington with several
legislators trying to get
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these laws changed.
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And we're gonna continue
to fight every day
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to get these laws changed
so that ERISA can become
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fair for claimants around the country.
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Again, if you have an ERISA-based claim,
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which is usually a policy
that you receive from your
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employer, feel free to give us a call
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and we'd be happy to
discuss your claim with you.
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