New York Outlaws "Discretionary Clauses" in ERISA Long Term Disability Policies
New York ERISA long term disability claimants just received a big assist from New York State Insurance Superintendent Howard Mills . Following the lead of California's Insurance Department, Superintendent Mills issued 2006 Circular Letter # 8 invalidating all "discretionary clauses" in existing group long term disability policies. All insurance companies must comply by May 31, 2006.
Insurance companies frequently used discretionary clauses to unfairly deny legitimate long term disability claims by claiming their policy gave them "discretion" to decide what is and is not a disability. Discretionary clauses also handcuffed federal court judges who reviewed the unfair denials. An often heard statement by Judges might be "if I were deciding this myself, I would find the claimant disabled. But since the policy grants the insurance company discretion to decide what is disabling, and their doctor says the claimant is not disabled, I cannot say their decision was ‘arbitrary and capricious’.
Now - New York residents with ERISA group long term disability policies will have greater success challenging disability claim denials or terminations. Federal Judges will have far greater leeway in deciding who is disabled from their ‘own occupation’ or ‘any occupation’. Essentially, the playing field for long term disability claims just got a lot fairer. Sure – the insurance companies still have the big bucks to hire large law firms to fight your claim, but you just won a significant battle. Bottom Line – Turley, Redmond & Rosasco will be fighting and winning more LTD claims in the future. Have a great Memorial Day weekend!
I AM GOING THRU A DIVORCE IN NEW YORK CITY AND I RECEIVE 3/4 DISABILITY FROM THE NEW YORK CITY POLICE DEPARTMENT AND I ALSO RECEIVE SOCIAL SECURITY DISABILITY PAYMENTS IS THERE A NEW YORK STATE RULE OR LAW ON HOW MUCH MY EX IS ENTITILED TO IN A DIVORCE. IS ANY PART OR ALL OF MY DISIBILITY PENSION OFF LIMITS IN NEW YORK
Generally, the portion of your 3/4 disability pension attributable to personal injuries is seperate property if it is carved out in the QDRO. Tell your divorce attorney to see the case of Pulaski v Pulaski, 222 AD3d 820 (2nd Dept. 2005). Good luck!