LTD and ERISA Lawyers: Riverside, Orange & San Bernardino Counties
Administrative law is the area of law that deals with government agencies, such as the Food and Drug Administration (FDA) or the Social Security Administration (SSA), and their rule making, adjudication, and enforcement functions.
The main goal of administrative law, and lawyers who practice administrative law, is to protect the rights and interests of the public as it interacts with the government. For example, when a person submits a claim for Social Security disability benefits (SSDI), it is up to the attorney representing that claimant to present the claim and follow it along to the point that the disability claim is adjudicated by the administrative law judge (ALJ) at an administrative hearing.
Government agencies create, implement, and enforce their own rules and regulations. When an administrative agency, such as the Social Security Administration, issues administrative rules and regulations, those rules and regulations carry the force of law. The body of law that administrative agencies create is called “administrative law.” It is different from judicial or case law, which is created by judges when they adjudicate cases brought before them.
At the federal level, it's the U.S. Congress that creates federal law and federal agencies that are empowered to create their own rules and regulations.
Federal agencies are created and governed pursuant to the U.S. Administrative Procedures Act, passed by Congress in 1946. It regulates federal agencies, which, in accordance with this Act, must govern themselves with transparency and accountability.
When agencies propose new regulations, they are published in the Federal Register, and before they become law, the public is given a period to comment on the proposed rule or regulation. After public comment, the agency then creates a final regulation, which is published in the Code of Federal Regulations (CFR).
Disability Claims Under Social Security (SSDI)
The Social Security Act and the federal agency that enforces it, the Social Security Administration (SSA), are perfect examples of administrative law. The SSA, as part of its mandate, has created a comprehensive set of rules and regulations that govern all aspects of a claim for disability benefits under the Act.
The regulations and procedures that govern a disability claim are complex, and the deadlines for complying with them are strictly enforced. If you miss a deadline, under most circumstances you will not be able to fix it.
Built into the disability rules and regulations promulgated by the SSA are certain administrative law principles such as deference to the agency, benefit decisions that are based on the administrative record, no Seventh Amendment right to a jury trial, limited or no discovery, and a non-adversarial hearing before an impartial administrative law judge.
Disability Claims Under ERISA
The claims process for long-term disability (LTD) benefits under an employer-based group disability plan (ERISA) is very different from SSDI. ERISA law is not “administrative,” and yet, over the years, courts have adopted many administrative law principles.
In ERISA cases, one obvious difference is that a private insurance carrier is involved in making benefit decisions, rather than the government. Often it is the same insurer that determines both eligibility for disability benefits and pays those benefits, thereby creating an inherent conflict of interest.
The claims procedure for ERISA disability claims, unlike that for Social Security, is highly adversarial and very different from what one would find in an administrative agency.
However, many of the administrative principles that govern administrative agencies have been applied by courts to ERISA cases. [Reference: “The paradox of the misuse of administrative law in ERISA benefit claims.” Mark DeBofsky. 37 J. Marshal Law Review, 727 (2004).]
For example, the administrative law principle of granting deference to the administrator (in the case of ERISA that would be the insurance carrier), not permitting a jury trial or allowing “discovery” (e.g., depositions or document demands), and reliance on the administrative record are all well-established principles of administrative law that work well in SSDI cases, but are of dubious fairness to the claimant in ERISA cases.
In a highly adversarial process, such as ERISA, the appropriateness of applying administrative law principles, which are better suited to administrative agencies such as the Social Security Administration, is questionable.
But that's what we have.
However, in the state of California, there is some promising news for claimants applying for long-term disability benefits under ERISA. California Insurance Code § 10110.6 is new legislation that prohibits discretionary clauses in long-term disability plans. In Orzechowski v. Boeing Co. Non-Union LTD Plan, No. 14-55919, 856 F.3d 686 (9th Cir. 2017), the Ninth Circuit held that § 10110.6 applied equally to ERISA cases. [See: “Discretionary Clauses After Cal. Ins. Code § 10110.6.”]
What that may mean is the elimination of one of the most onerous and unfair administrative law principles, that of deference to the insurance carrier's benefit denial decision, at least in California. Hopefully, the Ninth Circuit will continue to apply § 10110.6 to ERISA cases in this way.
Perhaps courts will also chip away at some of the other administrative law principles to create a more even playing field for claimants applying for long-term disability benefits under ERISA. As claimants' attorneys, we'll hope for the best.