Definitions

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A

Abuse of Discretion

One of the two standards of review the court applies in ERISA cases (see also standard of review and de novo). This standard of review is triggered when a policy contains a provision clearly granting the plan administrator or insurer the discretionary authority to determine eligibility. If the Policy contains discretionary authority the court is required to review the insurance company’s decision under the abuse of discretion standard. An abuse of discretion standard of review is very deferential to the insurance company or plan administrator and if there is any plausible basis or the insurer’s decision is not clearly erroneous the decision will be upheld by the court.

Activities of Daily Living

These are activities people typically do on a daily basis such as bathing, dressing and undressing, eating, cooking, etc. A person’s ability or inability to complete ADLs is used as a measure of their functional status and whether or not they are disabled. These are activities people typically do on a daily basis such as bathing, dressing and undressing, eating, cooking, etc. A person’s ability or inability to complete ADLs is used as a measure of their functional status and whether or not they are disabled. .

Administrative Record

See claim file.

Advanced Costs

Expenses associated with a case that we pay for upfront on a client’s behalf. The client is responsible for reimbursing these expenses whether or not the case is won. Typical costs include, but are not limited to: copies, medical records and reports, long distance calls, postage, and court filing fees. .

Any Occupation

A policy definition of disability that considers a claimant disabled if he/she cannot work in any full time capacity, regardless of the type of work (as opposed to own occupation). Under this definition a claimant is not considered disabled if there is some type of work he/she can complete on a regular basis. .

Arbitrary and Capricious

See abuse of discretion. This is essentially a synonym for abuse of discretion. The court will uphold an insurer’s decision unless it was “arbitrary and capricious.” .

Attending Physician Statement

A form most insurance companies require a claimant’s physician complete as part of the disability application process and as a periodic certification of disability. .

C

Claim

An application for benefits through a benefit plan. .

Claim File

The documents an insurer compiles and reviews in deciding a claim, including but not limited to the policy, medical records, letters, internal insurance company notes, reports, etc. Individuals who are pursuing benefits through ERISA, whether an internal appeal or litigation, may request and receive a copy of their claim file from the insurer free of charge. The claim file, also known as the administrative record, may be the sole source of evidence reviewed by a court in litigation. .

Claimant

A person who participates in a benefit plan (such as medical insurance or long term disability insurance) and who seeks benefits (files a claim). .

Claimant Interview

After an individual files a claim, the insurance company may visit the claimant’s home to interview the claimant about his/her medical condition(s), activities of daily living and other pertinent information. .

Claimant Statement

this term may be used in two contexts:

As part of the claimaint_interivew, the interviewer will prepare a written summary of the interview and ask the claimant to confirm the summary reflects their discussion.

Sometimes, as part of an internal appeal, we suggest claimants write a report for the insurance company detailing the claimant’s work history, medical condition, or other pertinent information. .

Claims Administrator

The agent, company or entity who reviews and approves or denies a claimant’s application for benefits and maintains ongoing claims. Typically, but not always, the insurance company or funding source for the benefit plan is the claims administrator. .

Contingent Fee

A percentage of the client’s benefit amount collected by the attorney after a case has been settled or won. There is no contingent fee if the case is lost. .

Cost

An expense associated with a case. Not to be confused with a fee. .

D

De Novo

One of two standards of review the court will apply in ERISA cases (see also “standard of review” and “abuse of discretion”). When review is de novo, the Court is required to stand in the shoes of a reasonable insurance company and conduct an objective and independent review of the evidence in the claim file, and determine whether the insurance company correctly or incorrectly denied benefits. Recent case law suggests that a court may consider evidence outside the claim file in rendering its decision, however, this is not a guarantee. .

D

Deposition

A procedure in which sworn oral testimony is given by a witness to be used as evidence in litigation. .

Discretionary Authority

Language in some insurance policies that gives an insurer the right to make all decisions and interpret the terms of the policy as it wishes. This language triggers the abuse of discretion standard of review. .

E

ERISA

ERISA is the Employee Retirement Income Security Act of 1974, a federal law that regulates the basic standards of conduct for certain pension, health plans, life insurance plans, long term disability plans, and other employer sponsored welfare plans. ERISA requires, among other things, that plans provide participants with plan information, requires insurers to establish guidelines for a grievance and appeals process, and allows plan participants to sue for benefits and breaches of fiduciary duty. ERISA preempts an individual from filing certain types of lawsuits against an insurer. For example, under ERISA an individual cannot sue an insurer for personal injury or seek any type of punitive damages. The only remedy available for an individual is to seek enforcement of the specific benefits. For more information, visit the U.S. Department of Labor’s ERISA information page.

External Review

After a claim or an internal appeal is submitted to an insurance company, the company will often hire an outside physician to evaluate the medical records and other information in the claim file in order to make a determination on a claim. .

Functional Capacity Evaluation

A physical exam typically conducted by a physical therapist in which a patient is required to complete certain physical tests in order to determine the patient’s physical restrictions and limitations. In the ERISA context, FCEs are utilized to assess a claimant’s ability to work. .

F

Fee

Money earned by an attorney for work performed on the case. .

Fee Agreement

The contract signed by both the attorney and the client specifying the amount of money a client will pay in exchange for the attorney’s services.
Fiduciary

An individual, corporation or association holding assets for another party. The individual, corporation or association has a legal obligation to make decisions on behalf of the other party. In the ERISA context, insurers are fiduciaries. They are supposed to work in a claimant’s best interest and assist them with perfecting their claim. .

Flat Fee

A fee agreement in which an attorney charges a set amount of money in exchange for his/her services. .

G

Grievance Hearing

After a claimant appeals an adverse decision concerning their eligibility for benefits, some policies provide the claimant with the ability to present their claim in person before a committee and have the committee review the previous determinations. Grievance hearings are typically associated with medical insurance claims. .

H

HIPAA

The Health Insurance Portability and Accountability Act. This federal law, among other things, protects a patient’s health records and sets requirements that must be met for doctors sharing that information with other entities. A patient must sign an authorization form to allow another person or entity access to their protected health information and medical records. .

Hourly Fee

A fee agreement in which an attorney charges a rate per hour for the number of hours he/she spends working on a client’s behalf. .

I

Independent Medical Examination (IME)

A physical exam typically conducted by a physician who does not normally treat the examined patient in order to assess that patient’s functional abilities and confirm or discredit their diagnoses. Typically the chosen physician is a specialist in a particular area that would normally treat the condition the claimant is diagnosed with (ie. A rheumatologist would assess somebody who had been diagnosed with fibromyalgia or multiple sclerosis). In the ERISA context, IMEs are utilized to assess a claimant’s ability to work. .

Insured

See Claimant. .

Internal Appeal

After an insurance company makes its first determination on a claim, claimant’s are afforded the opportunity to request a review of that decision and submit additional supportive evidence. .

L

Lawsuit

An action brought before a court by one person or entity against another person or entity. In the ERISA context, a lawsuit is filed in order to have the court review the decision made by an insurance company or other fiduciary. .

Lien

A signed document that gives a person the right to take another person’s property if a payment is not made or another obligation is not met. .

Litigation

See Lawsuit. .

M

Medical Record Review

An insurance company sometimes has a claimant’s medical records reviewed by a medical provider to determine initial or ongoing eligibility for benefits. The medical provider may be an employee of the insurance company. Sometimes an independent medical provider is used (for example, see External Review). .

O

Offset

A reduction in the amount of an individual’s monthly disability benefits due to income received from Social Security Disability, other disability income, part-time work earnings, Workers’ Compensation, etc.. Permitted offsets are listed in the insurance policy. .

Overpayment

This occurs when an insurance company pays a claimant more benefits than the claimant is owed. This sometimes happens when an insurance company initially pays an individual the full amount of his/her monthly benefits without reducing the amount by any offsets. An individual then owes the insurance company money for the past surplus benefits that were paid. .

Own Occupation

A policy definition of disability that considers a claimant disabled if he/she cannot work in his/her previous occupation on a full-time basis (as opposed to any occupation). .

P

Partial Disability

A provision contained in some insurance policies that permits a person to receive some long term disability benefits if they become unable to work full time, but retain the ability to work part-time. .

Participant

See Claimant. .

Peer Review

See External Review. .

Penalties

A payment provided for under ERISA which a court may require an insurance company to pay if the insurance company, among other things, fails to provide a claimant with requested documents that are relevant to the insurance company’s decision on the claim. .

Plaintiff

An individual or entity who files a lawsuit against another individual or entity. .

Plan

See Policy. .

Plan Administrator

The individual, group or corporation named in a policy as the agent responsible for managing the affairs of the policy such as confirming that all participants receive policy information, annual reports, and amendments to the policy’s terms. If no designation is made, the plan administrator is typically the employer. .

Policy

A written contract of insurance that specifies benefits, definitions, covered services, exclusions, offsets, etc. .

S

Social Security Disability

A federal program that provides financial assistance to people who become disabled provided they have worked for a long enough period of time and paid Social Security taxes. See www.ssa.gov for more information. .

Standard of Review

The type of scrutiny a court will use when deciding a particular issue or case. See Abuse of Discretion and De Novo. .

V

Vocational Review

An analysis of a claimant’s medical records, job description, skills, education, and training by a vocational (employment) expert in order to determine if an individual is employable in any capacity. .