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The Pivotal Law Blog

Pet Insurance: Read The Fine Print

Posted Thursday, June 28, 2018 by McKean J. Evans

Great Danes might be the best dogs - they’re calm, require relatively little exercise and space, and are super affectionate towards their human family. Unlike a lot of needier breeds who need constant activity, Danes reputedly just want to chill with you on the sofa.

The problem with Great Danes is they’re prone to significant, protracted health problems that get incredibly expensive - partly due to their large size and partly due to their susceptibility to congenital and hereditary disorders. Thus, in researching the pros and cons of owning a Dane, I was repeatedly advised “buy pet insurance!” That got me thinking whether pet insurance is actually a good deal or a scam preying on cost-conscious pet owners.

Apparently pet insurance, whatever its benefits, has caught the ire of Washington State’s Insurance Commissioner for some pretty significant problems. One company was found to have violated state law more than 600 times. Among other things, the pet insurer:

  • Illegally failed to give new policyholders copies of their policy contracts;

  • Misrepresented the policy coverage in its marketing and advertising materials;

  • Failed to cancel policies after pets died or the policyholder no longer owned the pet;

  • Sold policies under a fake name, preventing consumers from identifying the company when they had complaints;

  • Misled consumers about under what circumstances the company would refund premiums;

  • Ignored consumer complaints;

  • Sold insurance through unlicensed brokers; and

  • Failed to explain the reasons for refusing to renew coverage.

Pet insurance also tends to come with significant exclusions. Pre-existing condition exclusions are unsurprising. But some policies also exclude “wellness” care and expenses “not directly related to veterinary service” - super ambiguous terms with lots of room for fine print and interpretation that could give the company a basis to deny coverage.

Similarly, some insurance excludes hereditary or congenital disorders - a major drawback if your pet is of a breed (like Great Danes) that are notoriously subject to such diseases.

The upshot is to do your diligence and research the company and your coverage carefully before buying pet insurance, and to double check the policy fine print on your existing coverage to be sure you have the coverage you thought you bought.

Pivotal Law Group attorney McKean Evans has obtained favorable coverage decisions for insureds in disputes regarding coverage denials. If you have concerns regarding a pet insurance dispute, contact McKean at (206) 805-1493 or mevans@pivotallawgroup.com for a free consultation.

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The Importance of Addressing Digital Assets in Estate Planning

Posted Wednesday, June 20, 2018 by McKean J. Evans

More than ever, technology is fundamental to our lives. In 2018, even hardened luddites maintain email, social media, and/or cloud-storage accounts, or store considerable information on their smartphones. Maintaining digital information electronically may be second-nature, but it is important not to overlook it when considering estate planning issues.

Digital assets are particularly relevant to one important estate planning component: the power of attorney. A power of attorney is a written document by which the signer (the “principal”) grants authority to a specific person (the “agent”) to do certain acts or exercise certain powers if the principal becomes incapacitated or unavailable. Agents operating under powers of attorney will likely need to access the principal’s digital assets to effectively carry out their obligations. Unlike traditional assets such as real estate, accounts held at financial institutions, or tangible personal property, digital assets are only accessed through electronic devices. They can be easy to overlook, or to inadvertently discard or delete.

Digital assets are often stored remotely on cloud-based servers operated by third-party entities such as Microsoft, Apple, and Google, which retain control of the servers hosting the digital asset. Storage of digital assets on these entities’ servers is subject to intricate terms of use. Improper access of these assets can expose agents to criminal penalties under the federal Computer Fraud and Abuse Act (CFAA), 18 U.S.C. §1030.

Digital assets are increasingly important. Bitcoin is the obvious example. In one famous case, an individual reportedly tried to comb through a landfill after inadvertently throwing away the credentials to $75 million worth of Bitcoin. Some traditional financial accounts like checking or savings accounts now offer online-only account options. Other examples include digital works generated by musicians, photographers, and other artists, and accounts on streaming channels such as YouTube or Twitch. Even online videogame accounts can be valuable.

Besides assets with monetary value, most people routinely maintain other critical information on cell phones, email, social media, and/or cloud storage. This might include monthly bills for utilities or other critical services, or monthly statements or insufficient funds notices from accounts maintained at brick-and-mortar institutions. It might also include assets with significant personal value to the principal or their family, such as photo albums or correspondence.

Washington’s Uniform Fiduciary Access to Digital Assets Act (UFADAA), Chapter 11.120 RCW, applies to principals exercising authority under a power of attorney. UFADAA provides a framework for granting agents authority to access a principal’s digital assets. The UFADAA permits a principal to allow or prohibit disclosure to his or her agent of some or all of the principal’s digital assets. RCW 11.120.040. Such a designation overrides contrary provisions in terms-of-service agreements, as long as the contrary provision does not require the principal to act “affirmatively and distinctly” from the principal’s assent to the terms of service. Id. An authorized agent is specifically empowered to obtain the content of the principal’s electronic communications from a custodian maintaining such communications, provided that the agent provides the information required by the statute. RCW 11.120.090.

However, agents should be wary of federal anti-hacking laws that could be read to impose liability on an unwary agent accessing a principal’s digital assets. The Computer Fraud and Abuse Act prohibits obtaining information from Internet-connected devices “without authorization.” 18 U.S.C. §1030. It is therefore critical for powers of attorney to expressly authorize the agent to access digital assets – but the principal’s authorization is only half the equation. One federal court has suggested the CFAA makes it a crime to access digital assets even with the individual owner’s authorization if the person accessing the asset also lacks the authorization of the entity hosting the data (e.g., Google or Facebook). In Facebook, Inc. v. Power Ventures, Inc., the court stated that authorization from Facebook users was inadequate to give authorization to access data stored on Facebook’s servers without Facebook’s authorization.

In sum, digital assets are a critical element of any power of attorney or estate planning mechanism. If you have questions regarding a power of attorney or estate planning issue, contact McKean for a free consultation at 206-805-1493 or mevans@pivotallawgroup.com.

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Health Plans Can’t Discriminate Against Mental Health Treatment Says Ninth Circuit

Posted Thursday, June 14, 2018 by McKean J. Evans

Among the challenges of a mental health condition is the difficulty persuading health insurers to cover treatment. Mental health conditions can be difficult to objectively diagnose and can require lengthy and expensive treatment often with little prospect of a conventional “cure.” Hence, health plans have a powerful incentive to minimize coverage for mental health conditions to reduce costs.In response, the federal government, as well as Washington and many other states, have enacted mental health parity laws. In general, these laws prohibit health insurers and health plans from discriminating against mental health conditions by mandating mental health conditions be covered to the same degree as physical ailments.

On June 6, 2018, the Ninth Circuit Court of Appeals confirmed the federal Mental Health Parity Act prohibits health plans from discriminating against mental health conditions for the purposes of health insurance coverage. In Danny P. v. Catholic Health Initiatives, the court determined the health plan violated the law by denying the plaintiff’s claim for the cost of an inpatient stay at a residential mental health treatment facility.

In ruling for the plaintiffs, the court determined the Mental Health Parity Act required the health plan’s coverage of inpatient mental health treatment facilities be no more restrictive than coverage for stays at skilled nursing facilities. Since the Act prohibited imposing more restrictive coverage requirements on mental health treatment than on treatment for physical conditions, the Act precluded the health plan from deciding to cover room and board at skilled nursing facilities for medical patients while refusing to provide the same coverage for mental health inpatient care.

The Danny P. decision is an important win for patients seeking mental health treatment and vindicates Congress’ intent in passing the Mental Health Parity Act that mental health patients be free from discrimination by their health plans.

Pivotal Law Group attorney McKean J. Evans represents insureds and employees in health plan coverage disputes, and has successfully compelled health insurance plans to cover treatment. If you have questions about health insurance coverage, contact McKean for a free consultation.

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Insurance Dispute Timing

Posted Tuesday, June 12, 2018 by McKean J. Evans

How Long Do I Have To Dispute An Insurance Claim?*

If your insurer denies your claim or takes some action with which you disagree, how long do you have to dispute the insurer’s decision? For example, if your health insurer refuses to authorize surgery, or refuses to cover prescription drugs; your homeowner’s insurer refuses to pay the full bill for repairing your home after a fire; or your car insurer refuses to pay for damage you sustained in a crash?Most people are probably generally aware their legal claims may be subject to specific deadlines. But confirming the specific deadline applicable to a particular insurance dispute, and the action needed to comply with the deadline, can be tricky.

The first and most important question is whether the insurance is employer-sponsored. If so, it is likely subject to a federal law called the Employee Retirement Income Security Act (“ERISA”). ERISA imposes important deadlines insureds must meet in order to preserve their right to dispute the insurer’s adverse decisions regarding payment or benefits. First, insureds have a limited period of time after receiving the insurer’s notice of an adverse benefit determination (e.g., the insurer’s letter refusing to cover treatment) in which to appeal the insurer’s decision internally. This period is often relatively short (e.g., 60, 90 or 180 days) and the specific period depends on the terms of the employee benefit plan. Second, if the insurer refuses to reconsider its denial after the internal appeal, insureds have a similarly short deadline in which to file a lawsuit disputing the insurer’s decision. Again, this deadline is often short and depends on the specific language of the employee benefit plan.

The rules differ for non-employer insurance. Insurance that is not procured through an employer is not subject to ERISA. There is no internal appeal process. Instead, insureds typically have a specific period of time from learning of a dispute (e.g., the insurer’s failure to pay benefits) in which to file a lawsuit against the insurer. The specific period of time depends on the specific claims the insured can assert, which depends on the details of the insurer’s conduct. For example, insureds typically have four years in which to sue an insurer for violations of Washington’s Consumer Protection Act. Other legal claims typically have different deadlines in which to file suit.

This is complicated by the fact most insurance policies contain a provision requiring the insured to bring suit within a shorter time, regardless of the particular claim asserted. This policy-specific limitations period is often quite short (e.g., six months) so it is critical for insureds to carefully review their policy contracts. Often, these policy-specific deadlines can be circumvented – they may apply only if the insurer can prove their investigation of the claim was harmed by the delay, and, even if so, they may not bar all claims the insured has against the insurer. The upshot is virtually all insurance-related legal disputes are subject to deadlines by which insureds must assert specific claims or risk losing their legal rights. The specifics depend on the details. Often, even if a deadline has passed, insureds may still have legal recourse. Thus, it is critical for insureds to be mindful of any applicable deadlines regarding insurance claims and disputes, and seek advice from an attorney to confirm any applicable deadlines.

Pivotal Law Group attorney McKean Evans has obtained favorable coverage decisions for insureds and ERISA plan participants in disputes regarding coverage denials. If you have concerns regarding applicable insurance claims deadlines, contact McKean at (206) 805-1493 or mevans@pivotallawgroup.com for a free consultation.

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Washington Supreme Court Strikes Down “Maximum Medical Improvement” Limits in Auto Policy Coverage

Posted Tuesday, June 12, 2018 by McKean J. Evans

On June 7, 2018, the Washington Supreme Court, in Durant v. State Farm, ruled insurers may not limit payments to policyholders under auto insurance Personal Injury Protection (“PIP”) to only treatment needed for the insured to reach “maximum medical improvement” (“MMI”).

PIP coverage is required to be offered in Washington auto insurance policies. In exchange for additional premiums, PIP coverage requires the insurer to pay for the insured’s medical expenses related to physical injuries covered under the policy. In the Durant case, State Farm’s PIP coverage contained an additional sentence: “Medical services must also be essential in achieving maximum medical improvement for the injury you sustained in the accident.”

After State Farm refused to pay medical bills State Farm claimed were not essential to MMI, Durant hired a lawyer and filed a lawsuit challenging State Farm’s limitation on PIP coverage payments for only medical bills essential to achieving MMI. Durant claimed the MMI limitation violated Washington’s insurance regulation governing PIP coverage, WAC 284-30-395(1), which limits the reasons insurers may use to deny PIP coverage.

The Supreme Court agreed with Durant. The court applied the plain language of WAC 285-30-395(1), which provides three bases on which an insurer may deny PIP claims:

“the medical and hospital services: (a) Are not reasonable;(b) Are not necessary;(c) Are not related to the accident; or (d) Are not incurred within three years of the automobile accident. These are the only grounds for denial, limitation or termination of medical and hospital services permitted…”

The court determined the final sentence was dispositive: insurers may deny PIP coverage only for the four reasons identified in the regulation. Since “essential to maximum medical improvement” is not identified in the regulation, it is an invalid basis on which to deny PIP coverage.

State Farm argued the MMI limitation was part of the permissible limitation to medical services that are “reasonable” or “necessary.” But the court noted State Farm’s policy limited PIP coverage to medical bills that were “reasonable,” “necessary,” and essential to MMI. Thus, the court concluded the MMI limitation improperly exceeded the scope of the “reasonable and necessary” requirement. The court also noted Washington’s Insurance Commissioner previously warned insurers adding criteria to PIP benefit payments violates WAC 285-30-395(1).

The court confirmed WAC 285-30-395(1) and related statues “reflect Washington’s strong public policy in favor of the full compensation of medical benefits for victims of road accidents.” State Farm’s limitation unlawfully “denies Durant his PIP medical benefits necessary to return him to his pre-injury state.”

The Durant ruling clarifies an important aspect of Washington insurance law and confirms insureds’ right to coverage for medical treatment for injuries sustained in auto collisions.

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