Friday, October 30, 2009

Fraud and corruption as cost control

The folks at the Hastings Center Health Care Cost Monitor provide commentary and opinion on cost control as part of health care reform. Nothing wrong with that, of course; it’s a critically important part of the current debate over health insurance reform.

The other day the Hastings Center site featured a post by Jacqueline R. Fox, a professor at the University of South Carolina School of Law, entitled Will Health Care Reform Increase Litigation Over Denied Claims? Professor Fox conveyed a legitimate concern, if you ask me, about the effect of proposed reforms on health care costs, but when she turns to whether insurance companies should be accountable for wrongfully denying claims she demonstrates the depth of the ERISA problem.

Professor Fox posits that litigation over denied benefits claims could ramp up for two reasons:

First of all, removing pre-existing conditions and other limitations to coverage in the private market will make it easier for people currently without coverage to get it. In addition, controlling the cost of policies will make it easier for people to keep coverage. Coupled with proposed mandates that would require people to purchase insurance, it is logical to envision millions of people entering the state-regulated private insurance market, getting consistent insurance coverage for the first time.

Note her concern here is with the “state-regulated private insurance market”; that is to say she is not talking about employment-based policies currently covering the vast majority of us.

It’s where Professor Fox contrasts the situation regarding the “private market” with ERISAworld that she illuminates the Problem:

No damages are allowed to be awarded for an ERISA claim beyond the cost of the medical care that was denied, even if real, measurable damages occur and even if state laws would allow for these damages to be recovered.
By protecting employer-sponsored health insurance plans from liability for their benefit decisions, ERISA allows plans to adopt far more aggressive cost-saving approaches in their decisions than they could possibly risk were they subject to liability. In state court cases for wrongful denials that are not subject to ERISA, jury awards can reach tens of millions of dollars.

The legal analysis in benefits decisions is based on the language of the benefits contracts. If excessive cost was explicitly allowed as a basis for coverage decisions, liability would not be a large-scale problem. However, these contracts do not allow explicit cost-based rationing decisions to be made by the plan administrator and instead rely on a more amorphous “medical necessity” standard for their decisions.

Well, I do have a few quibbles with what I view as Professor Fox’s euphemisms. Allowing insurance companies “to adopt far more aggressive cost-saving approaches in their decisions than they could possibly risk were they subject to liability” is another way of saying “allowing insurance companies to fraudulently deny claims they don’t want to pay because of concerns over their bottom line.” And saying that insurers, in the absence of “explicit cost-based rationing” language in their insurance policies, resort to “a more amorphous 'medical necessity' standard for their decisions” amounts to an observation that insurers commit fraud to save themselves money: they can’t deny the claim for the reason they really want to, so they just make something up and call it a “medical necessity” decision.

Professor Fox certainly has a legitimate concern. We do no one any favors by pricing health care out of reach. But “cost savings” ought not be allowed to divert us from our attention to the Problem. After all, we could certainly help out Detroit if we allowed them to sell a car and then get away with not actually delivering, you know, the car. Same thing applies to ERISA: it’s a false economy to pay less for something when that something isn’t really delivered. ERISA insurers sell insurance but deliver empty and illusory promises. And Professor Fox’s argument makes that very point.

Professor Fox herself observes:

It is not at all clear that the ERISA pre-emption is a good way of controlling health care costs, either from an ethical standpoint or in terms of guaranteeing the most rational use of scarce resources. However, it is one of the few ways of controlling costs that we currently have.

No it is not at all clear. If the insurance industry needs immunity from legal liability for fraud in order to keep costs under control, then it is time for them to go. And then it'll be time for us to figure out a way to have health care services delivered by an entity that does not need to be able to commit fraud with impunity if it is to stay in business.

Wednesday, October 28, 2009

The states fight back – a little

As we’ve discussed previously one of the biggest problems with ERISA is that it prevents the states from providing suitable protections for people who have “insurance” through their employers.

The ERISA prohibition of state regulation is not across-the-board, however. ERISA does preserve some state regulatory authority (in fact a lot of us think it was intended to preserve all state authority when it came to insurance companies, but that got mucked up in the judicial interpretation process over the years). One of the recurring battles in ERISAworld is whether some particular state regulation can survive ERISA and actually, you know, regulate insurers.

Now, in the most important area – the consequences an insurance company faces if it defrauds you or kills you – the states remain powerless to improve on ERISA’s ridiculously stingy approach. But the states do retain some ability to regulate the content of insurance policies sold within their borders, and that’s where a lot of these arguments arise.

Yesterday the Ninth Circuit issued Standard Insurance Company v. Morrison, a case about whether Montana could prohibit so-called “discretionary clauses” in insurance policies. These clauses are what insurance companies use to shield themselves from any but the most cursory and deferential judicial scrutiny of their benefits denials, and to pretend they are something they are not, like courts or administrative agencies. Yesterday the Ninth Circuit said Montana could indeed prohibit these provisions.

As we’ve discussed previously "discretionary authority," which leads to the weak judicial scrutiny the insurers are so fond of, is supposed to come from someone who sets up a trust, and wants the trustee to have such powers. It is not something the trustee just unilaterally confers on itself – except of course in ERISAworld where insurance companies stick this language into the insurance policies for their own benefit, and without so much as checking with the putative “trustor,” i.e. the employer purchasing the policy for its employees.

If you want some corroboration about how pernicious these provisions are, just consider what Montana and some other states have done to try and prohibit them. Montana’s Insurance Commissioner banned them (and the Ninth Circuit said yesterday he had the authority to do so) by invoking his authority to disapprove “any inconsistent, ambiguous or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract” (you can find that in the trial court decision in the Morrison case, which is at 537 F.Supp.2d 1142 (D.Montana 2008)), a long way of saying he can disapprove language which renders the coverage supposedly provided by the policy a big fat lie.

Montana is not alone. California, for example, has disapproved “grants of administrative discretion in insurance policies and ERISA plan documents” because they “render insurance contracts ‘illusory’ and ‘unsound insurance,’” (Mitchell v. Aetna Life Ins. Co., 359 F.Supp.2d 880 (C.D.Cal. 2005)) and so has Michigan, concluding discretionary clauses “unreasonably reduce the risk purported to be assumed in the general coverage of the policy.” (American Council of Life Insurers v. Watters, 536 F.Supp.2d 811 (W.D.Mich. 2008)). All in all, as of now sixteen states have taken similar actions.

The National Association of Insurance Commissioners, a, um, national association of insurance commissioners of the various states, has also weighed in, issuing the Discretionary Clauses Model Act, which it urges the states to adopt, in 2002. The “NAIC membership believed that discretionary clauses were inconsistent with basic consumer rights," (page 9 of the linked brief) and issued the Model Act “to assure that health insurance benefits and disability income protection coverage are contractually guaranteed, and to avoid the conflict of interest that occurs when the carrier responsible for providing benefits has discretionary authority to decide what benefits are due” (page 11).

The insurance industry, of course, is not willing to give up their little cash cow without a fight. Let’s see what MetLife, a big ERISA insurer, has come up with – if the states can ban discretionary clauses in insurance policies, we’ll just stick them somewhere else:

To date no court has held that state insurance laws can regulate the employer’s plan documents, like the federally mandated summary plan description (SPD) or master plan document, if it has one. ... As a result of the battle over discretionary clauses, an ERISA plan sponsor who wants plan determinations to receive deferential judicial review may be unable to purchase an insurance policy containing a discretionary clause. ... Plan sponsors who want deferential judicial review should include a discretionary clause in their SPDs or other formal plan documents.

Wanna bet MetLife won’t volunteer to draft an employer’s SPD? I’ll take that bet.

The upshot of all this is that the states, as of now, do retain some ability to ameliorate the absurd effects of these pernicious “discretionary” provisions. That may not last forever; as we’ve seen the insurance industry will fight tooth and nail not to lose this unfair advantage. If your state has not yet addressed this problem then it’s time to call your legislators and get them on the stick.

Friday, October 23, 2009

ERISA: not always bad

In the wake of today's good news that Ian Pearl's coverage has been reinstated, it seems a good time to admit that not all things ERISA are all that terrible.

So lest I be misunderstood I want to make it clear that Erisa Nakayama is not a crook and does not belong behind bars (assuming of course she does not work for an ERISA insurance company).

I do think she should have a word with her parents about that name, though.

Wednesday, October 21, 2009

Labor Department official: "tragedy" to enact health reform and leave ERISA alone

Paul Secunda blogs at Workplace Prof Blog about a talk given by Phyllis Borzi, who heads the Employee Benefit Security Administration. She knows whereof she speaks: she's in the ERISA enforcement business, and her agency's mission is to "deter and correct violations of the relevant statutes through strong administrative, civil and criminal enforcement efforts to ensure workers receive promised benefits."

Phyllis Borzi got it right:

Borzi said it would it a tragedy if Congress passed health care reform legislation without addressing remedies available to plan participants under ERISA.

So did Professor Secunda:

I certainly agree with Sec. Borzi that the current state of ERISA remedies is a tragedy and that health care reform efforts need to consider addressing this remedial issue. I also agree that many employers and management-side attorneys have a knee-jerk reaction to defend that system because of favorable treatment under ERISA's remedial and preemption provisions.

It is time for Congress to finally provide a meaningful remedy for ERISA violations.

True that.

Friday, October 16, 2009

Another “insured” person cheated out of “insurance” by ERISA; UPDATE: Guardian caves in response to public pressure

Ian Pearl, since birth, has suffered from muscular dystrophy. He is now 37 years old, and is confined to a wheelchair and hooked to a breathing tube.

Fortunately for Ian, he had “insurance” through the ERISA plan offered by his father’s company. So while his health was terrible, he at least would have access to adequate care and his family could avoid going bankrupt from medical bills.

Not so fast. His insurance carrier, Guardian Life Insurance Company, decided it was just too expensive to live up to its contractual obligations to cover the care required by Ian and others like him.

So Guardian just pulled the plug. According to the Washington Times:

Legally barred from discriminating against individuals who submit large claims, the New York-based insurer simply canceled lines of coverage altogether in entire states to avoid paying high-cost claims like Mr. Pearl's.

At least Guardian was compassionate about condemning Ian to a life of inadequate medical care for his debilitating condition. You can just hear them choking back their tears:

In an e-mail to four other Guardian executives entered into evidence in the Pearls' suit, company Vice President Tim Birely discussed how the company could "eliminate this entire block to get rid of the few dogs."

Now how on earth is this legal? Simple:

The judge found that the company had not violated the Employee Retirement Income Security Act (ERISA), because it canceled entire policy lines.

Sorry, Ian. To Guardian, you’re just one of the “few dogs” they need to dispense with.


Daylight,as they say, is the best disinfectant. In response to public pressure and lots of media coverage and widespread outrage, Guardian has caved and reinstated Mr. Pearl's coverage.

Now about all those people who didn't make the headlines...

Tuesday, October 13, 2009

No surrender! -- redux

This blog is all doom and gloom, and for good reason: ERISA stinks! But that ought not stop us from doing what the little the law allows to try to right these wrongs. Therefore, a periodic call to arms seems appropriate. Herewith, consequently, a reprise:

If you’ve spent any time on this blawg, and you’ve experienced a denied insurance claim subject to ERISA, you may have developed a sense of hopelessness, not to mention frustration and outrage. All, in my opinion, very appropriate reactions. There’s no use soft-peddling the malignant effects of ERISA – it is very arguably the most unjust law on the books.

But the understandable reactions described above ought not lead to paralysis or inaction. To become passive and to simply yield to insurance company abuse only makes a bad situation worse, for yourself and for others in your unfortunate position.

The calculus ERISA presents to an insurance company goes something like this: we deny 100 claims which probably ought to be approved. Perhaps 20 of those people will even realize we have done something wrong, because we can write bogus denial letters that make it sound like the denial is proper even though we know it probably isn’t. Out of the 20 people who realize they’ve been screwed, perhaps 10 will contact a lawyer, and perhaps five will end up actually taking us to court. And once in court, since we get the benefit of the most absurd stacking of the legal deck known to the law, we can probably count on winning three of those cases, even assuming the claimant is right and we are wrong. So by denying 100 claims wrongfully, thanks to ERISA, we can probably reap the financial benefit of not having to pay 98 of them, and the two we might lose in court, even if we are ordered to pay attorney fees for the other side, won’t come close to canceling out that benefit (remember in no case can consequential or punitive damages be awarded, so we never have to worry about one big loss wiping out the benefit we derive from ripping off those original 100 people).

The only way to upset that calculus even a little bit is for people to stand up for their rights, take the insurers to court in appropriate cases, and make them explain themselves to a judge. The law provides meager rights indeed, but there are lawyers (I am one of them) who can and do go to court and enforce those rights at least. Given the state of the law, it is very, very unlikely we can make you whole, but we can often recover something, and in the process make the insurance companies explain their bad behavior. Gradually, gradually, their fraud and abuse is thereby exposed to the light of day.

So: if you think you’ve been ripped off by your ERISA insurance company, there is every likelihood that you have. Find a lawyer specializing in ERISA claims (this is pretty important because ERISA is arcane and a law unto itself; a generalist is swimming upstream in trying to deal with all the absurd and counterintuitive rules), and see if the lawyer can find a way to enforce what rights the law provides. Take a stand and make them explain themselves!

Wednesday, October 7, 2009

ERISA to Insurance Companies: It’s OK to kill someone’s daughter, just don’t flip them off

Cigna Corporation, an ERISA health insurer, killed Nataline Sarkisyan in December 2007, denying a liver transplant on the pretext it was “experimental” (which is insurance company code for “expensive”; after all paying for the transplant would reduce its profits).

Nataline’s parents sued Cigna for killing their daughter. Nataline’s mom, Hilda, also appeared at Cigna’s Phildelphia headquarters in 2008, and said “You guys killed my daughter. I want an apology.”

What she got instead is described in an article in today’s Los Angeles Times:

Cigna employees, looking down into the atrium lobby from a balcony above, began heckling her, she said, with one of them giving her “the finger.” Sarkisyan walked out, stunned and hurt.

“They showed me their true colors,” she said. “Shame on them.”

Meanwhile, thanks to ERISA, a Los Angeles judge had to dismiss their wrongful death case against Cigna, because ERISA provides the Cignas of the world immunity from liability for killing people.

Cigna, of course, took this as some sort of endorsement of its decision to let Nataline die:

Cigna said the dismissal of the wrongful-death case in April showed that the court “agreed with our position that the Sarkisyans’ claims regarding Cigna’s decision making were without merit.”

But as the Times correctly observed

In fact, the court did not consider the merits of the family’s wrongful-death claims. Instead, it decided those claims could not be heard.

The insurance companies’ flack, one Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, defended the outcome, saying that to hold insurance companies accountable for killing people will “bankrupt these plans, and employers would no longer be able to offer coverage.”

That makes perfect sense. How can you be expected to offer your services at a reasonable price if the courts are going to nitpick about you killing people?

The Sarkisyans did get one bit of good news, though. They get to sue Cigna over its employees flipping off Ms. Sarkisyan: the court “said the Sarkisyans could pursue damages for any emotional distress caused by the Philadelphia incident.”

So they have that going for them.

Memo to insurance companies in ERISAworld: go ahead and kill people. Just keep your middle finger to yourself.

UPDATE: Film at 11:

Tuesday, October 6, 2009

Insurance Companies and Federal Judges Getting Together to Party and Scheme: What Could Go Wrong?

As we have seen there are judges who are becoming fed up with ERISA and its malignant effects on the behavior of insurance companies and the ability of insureds to enforce the promises made in insurance policies.

These judges, of course, do not make up the entirety of the federal judiciary. There are other judges who actually sit down and party and break bread with insurance companies.

Take, for example, the upcoming ERISA Litigation Conference to be presented by the American Conference Institute. This shindig will be raging at the ritzy Helmsley Park Lane Hotel in NYC on October 19 and 20.

What could possibly be wrong with that? Well, consider for one thing that when you have a claim denied and you ask for reconsideration from an insurance company, they are (supposedly) required by law to undertake a “full and fair” review of the claim, and conduct it impartially in accordance with their so-called fiduciary duties. Among these fiduciary duties are that they are required to discharge their duties “solely in the interest of the participants and beneficiaries.”

So what are these insurance companies (and plan sponsors and service providers) and federal judges going to be talking about over their caviar and bubbly? How about this: “Using the claims review process to set up, control and strengthen the defense”? (page 1 of the ACI brochure linked above) Or “Anticipating claims when making the decision and preparing to defend it before the decision is made”? (Page 3 of the linked brochure).

See, guys, when you are undertaking a review of a denied claim, and you are supposed to do that "solely in the interests of the participants and beneficiaries,” you are not supposed to be thinking about scrubbing the claim file so as to “set up, control and strengthen the defense.” You are not supposed to be “anticipating claims” or “preparing to defend it before the decision is made” since, of course, you approach your job with an open and fair mind and you don’t even know you’re going to deny the claim until you have assembled all the facts and applied your impartial, professional expertise to the decision.



And of course while the insurers are discussing how to use the claims review process to prepare for the defense of a future lawsuit instead of applying it to the "sole interest of participants and beneficiaries,” they’ll be doing so while rubbing elbows with “21 federal judges from district courts located in 8 circuits.” (Page 1 of the linked brochure). This, of course, is like Al Capone and Baby Face Nelson setting up a party at the Waldorf Astoria to discuss “Tommy Gun serial number removal techniques” and “get-away cars: the fastest and most inconspicuous models,” while inviting federal judges to come and enjoy the fete.

It smells, sure. Just remember, next time you ask your insurance company to reconsider its denial of your health insurance claim, all you will really get is a reconsideration by the insurance company as to whether it should continue to pay benefits, and thus reduce its profits. And all the while they’ll be thinking about “using the claims review process to set up, control and strengthen the defense.”

Funny, by the way, that ACI’s own web site has sequestered information about this conference. Guess we’re not supposed to know about it. My bad; looks like I was mistaken about that. I can't get the page to come up on my computer but I am told others can.

Friday, October 2, 2009

Confessions of a money-grubbing, lazy, greedy capitalist tool – you know, the type of person who dislikes insurance companies

I was shown a post on another blog the other day ranting about how horrible ERISA attorneys are because they charge for their services when their clients really really need their insurance benefits to survive. This other blog post was inaccurate, ignorant, unduly vituperative, and I did not like it.

So I am not gonna link to it.

So there.

But if one person (erroneously) thinks this way then maybe others do too, so it seems appropriate to mention a few things about the world of ERISA claimant’s attorneys, to which I very proudly belong.

First, it is all too often true that, when an ERISA attorney is able to get a denial or termination of benefits reversed, the attorney fee eats into what should have been your benefits. If you think about how the law drastically limits the possible recovery when you do win, that’s pretty much unavoidable if the attorney is working on a contingency. If the law only allows you to recover what the benefits should have been in the first place, and the attorney is getting a percentage of the recovery as his fee, then yes it has to come out of those benefits.

Do we like that? Of course not. The alternatives, however, are for attorneys to work for free (which happens more often than you may suspect but of course does not make for much of a business plan) or for clients to pay by the hour (an arrangement most clients have no interest in nor ability to sustain).

I think of attorneys like me as being much in the mold of John D. MacDonald’s great beach-bum private dick Travis McGee:

McGee's business card reads Salvage Consultant, and most business comes by word of mouth. His clients are usually people who've been deprived of something important and/or valuable (typically by unscrupulous [and sometimes also legal] means) and have no way to regain it lawfully. McGee's usual fee is half the value of the item (if recovered) plus expenses, and those who object to such a seemingly high fee are reminded that getting back half of something is better than nothing at all.

My fellow McGees of ERISAworld and I regain the ill-gotten loot lawfully, if you can use that word to describe a process which brings discredit to the law. And we typically don’t charge as high a rate as Travis did – in fact I’ve never even heard of a contingency fee as high as 50%.

Travis McGee charges what he does because he has to incur some significant risk in working on his clients’ behalf: those people who took the loot in the first place don’t give it up without a fight. My colleagues and I also take on risk, and quite a lot of it, because ERISA doesn’t allow us to recover anything without a fight, never mind making our clients whole. I know for a fact we work very hard, and against some pretty significant odds, all because, to be a bit touchy-feely for a moment, we believe in what we do.

It would be a lot easier to make a hell of a lot better living by just taking cases not subject to ERISA, where we can get a percentage of emotional distress damages, punitive damages, and get in on that lottery that folks like think is so outrageous. But we choose to specialize in a field which drastically and artificially limits the recoveries our clients can get, and therefore necessarily limits our fees too. We do that because we see injustice and we want to do our small part to square accounts.

Like any other contingency fee practice, the cases we are able to win have to pay not only for themselves but for the ones we lose too. When we get an award of attorney fees (which is not guaranteed in any case) our clients share in that along with us, at least in any arrangement I’ve ever heard of. ERISA claimant's law is genuinely a calling, if you ask me, and no lawyer in his right mind goes into this field in order to get rich.

Look, I’d love it if the law were such that my clients could always be made whole for the way their insurance company treated them and there was enough left over to keep the doors open at my little law practice. But the law is stingy, and if we can’t make them pay all they should, on behalf of our clients and ourselves, we go forth and try to make them pay as much as the law allows. As Travis McGee’s boon companion Meyer said of him in Darker Than Amber,

I’ve seen how you take on problems. You get deeply involved. You bleed a little. Indignation makes you take nutty risks. All that splendid ironic detachment goes all to hell when you detect a dragon off in the bushes somewhere.

And by the way Travis saw ERISA coming. As he said, in 1964 mind you, in The Deep Blue Good-By,

And I am very wary of a lot of other things, such as plastic credit cards, payroll deductions, insurance programs, retirement benefits, savings accounts, Green Stamps, time clocks, newspapers, mortgages, sermons, miracle fabrics, deodorants, check lists, time payments, political parties, lending libraries, television, actresses, junior chambers of commerce, pageants, progress, and manifest destiny.... But these things can never form lecture material for blithe Travis McGee. I am also wary of earnestness.

Anyway, that’s me and my colleagues. Salvage Consultants.

Thursday, October 1, 2009

The Problem, redux

On the first day of each month I'll be posting a reprise of the first post on this blog, which contains an overview of the Problem. It'll be updated and edited as we go along. But I'd like to have a summary of the Problem available frequently, hence the monthly repeat and update. So off we go...

ERISA is the Employee Retirement Income Security Act, and it is codified in Title 29 of the United States Code, starting with section 1001. It's federal law, enacted in 1974, and it was supposed to protect employees' rights in connection with their pension plans and benefit plans (health, disability, life insurance, that sort of thing). But it doesn't. Quite the contrary.

This blog is dedicated to the ERISA problem.

What is that problem? It mainly concerns those benefit plans (ERISA is actually not a bad law with respect to pension plans). Pension plans is what they had in mind when they enacted it -- benefit plans were an afterthought.

And it shows. If your insurance company wrongfully denies your claim, you might figure you can always take them to court. You can do that (usually), but when you get there you'll find things don't make any sense. We'll go into the particulars soon, but for now:

If you get your insurance coverage through your employment, then in virtually every case ERISA preempts state law (meaning it cancels it out, eradicates it, takes its place). But, having gutted state law relating to insurance disputes, it fails to provide any reasonable substitute. The remedies it provides (i.e. what you get if you win a lawsuit) are very, very stingy. And ERISA severely compromises your ability to secure even the scant remedies it does provide.

1. Remedies. ERISA limits the recovery you might get to the benefits which should have been provided in the first place, and an award on account of attorney fees in the court’s discretion. Example: you have your disability benefits wrongfully denied. As a result, you have no income, your credit rating is trashed, you lose your home and you are driven into bankruptcy. You file your ERISA suit and against the odds, you win. What do you get? The benefits they should have been paying you back when it might have done you some good. That's all (you might -- might -- get something on account of your attorney fees too).

The trashed credit, the lost home, the bankruptcy, the ruined life? Bupkis. ERISA does not allow for any recovery on account of these sorts of consequential damages -- none. And this applies even if the insurance company committed outright fraud when it denied your claim. Incidentally, I find it quite difficult to understand why the insurance industry, uniquely among all industries in America, needs to have immunity from liability for fraud if it is to offer its services at a reasonable price. Anyway, this concern goes beyond making people whole; it also directly impacts the behavior of insurance companies.

As of now we have a situation where the law tells insurers they face no meaningful consequences if they deny care improperly or even commit outright fraud. As one federal judge has commented, "if an HMO wrongly denies a participant's claim even in bad faith, the greatest cost it could face is being compelled to cover the procedure, the very cost it would have faced had it acted in good faith. Any rational HMO will recognize that if it acts in good faith, it will pay for far more procedures than if it acts otherwise, and punitive damages, which might otherwise guard against such profiteering, are no obstacle at all." Insurance companies, of course, are not charities, but corporations; their boards are subject to a fiduciary duty to maximize shareholder value. If it is possible to accomplish this by mistreating insureds, then it follows insurers will do precisely that (and believe me, they do).

2. Procedure. In ERISA litigation, courts have determined among other things that there is no right to a jury; that discovery (the pre-trial process where you obtain the other side's documents, take depositions and such) is to be significantly abridged; that the evidence which may be introduced at trial is limited to that which the insurer deigned to assemble during its claims evaluation process; and that, when the policy contains language vesting "discretion" in the insurer, if you prove the insurance company was wrong -- you lose. In order to win, you must prove the denial was "arbitrary and capricious" -- that is to say, ridiculous, absurd, unintelligible, crazy. And lo and behold, the insurance companies grant themselves "discretion" when they write their policies. In this way we treat insurance companies as if they were federal judges. But Learned Hand they are not.

These days we're all debating health care reform and what to do about the uninsured. ERISA matters a lot here, because if you get your insurance through your employment, then consider yourself to be in that group. If by "insurance" you mean something like an enforceable promise by an insurance company that it will pay for what it says it will, what you have doesn't qualify. What you have is a piece of paper saying some company will pay your claim if it feels like it. You don't have insurance at all -- you only think you do.