Columns

What if there were a non-divisive public policy change that would save the country billions and benefit the average American worker?

By J.J. Conway 

What if there were a non-divisive public policy change that would save the country billions and benefit the average American worker? Well, there is one, and it is ripe for action: The enactment of legislation that restricts how Social Security Disability Benefits may be used by private insurers to “offset” their own financial obligations.

When most of us think of Social Security, we think of retirement benefits. The Social Security Act is a Depression-era law whose original purpose was to protect widows and children when the family’s provider died.

Over time, Social Security’s scope of coverage expanded. It became a primary retirement plan while continuing to provide death benefits to minor children. It also expanded to protect workers who became permanently disabled with the creation of the Disability Insurance Benefits program, known as SSDI. It is this SSDI coverage that has been exploited by the disability insurance industry.

Here’s how:

The typical employee with disability insurance is often covered through their employer’s group long-term disability plan, often an ERISA-qualified plan. If this employee becomes seriously ill or is hurt, they can file a claim with the employer’s disability insurer. When a claim is filed, the insurer sends the employee a packet of forms that includes a contract requiring them to file a claim with Social Security and simultaneously claim disability benefits from the federal government. The insurer will condition the payment of benefits on the claimant’s filing an application with Social Security and pursuing all avenues of appeal. Some insurers will even provide the disabled employee with legal representation to pursue a Social Security claim. This is done right when the claim is filed.

The problem is that, in most cases, Social Security’s legal standard of disability is much stricter than what a private disability contract requires. A private disability contract may pay a benefit if an employee cannot do their own job. Social Security requires proof of an inability to perform any job in the national economy.

So, already, the private disability insurer is forcing an employee to file a claim for benefits paid by the federal government when that same employee has a private contract of insurance. And, worse still, the insurer is requiring the filing of an SSDIB claim when the employee may not yet be eligible.

The reason for this is that the private disability insurer receives a dollar for dollar offset (or credit) for any monies paid by Social Security.

To illustrate this point, take the case of a 40-year-old female with two minor children earning $75,000 per year. If the employer’s disability contract pays her a benefit equal to 60% of her salary, she would be entitled to a monthly payment of $3,750 per month or $45,000 per year.

If she were required to apply for SSDI, and her monthly Social Security benefit was $1,600 and $750 for each of her two children, the government would be paying her $3100. If she is awarded that amount from Social Security– voila – the insurance company’s responsibility drops to $650 per month.

During the period of “own occupation” benefits, typically two years, the insurer’s $90,000 obligation drops to $15,600, and the U.S. Taxpayer is now responsible for paying the claimant $74,400, even though, in our example, the employee had private insurance.

Given the original purpose of the Social Security Act, even with its subsequent amendments, it seems inappropriate to require the U.S. Taxpayer to pay for a benefit where a person has private insurance and may not even qualify for SSDI.

There are, of course, exceptions. In the case of a seriously injured or ill person or the victim of, for example, a stroke, an early claim seeking Social Security benefits is entirely appropriate. And Social Security claimants also received Medicare benefits. So, there are other considerations. But in those cases where an individual’s illness or injury has not yet risen to the level of a permanent disability, this practice seems to benefit no one but the insurance industry.

So, what can be done?

State insurance commissioners have been ineffective at combatting this practice, so the Social Security Act or the ERISA statute could be amended and updated to curb these practices. Here are three suggested reform propositions that could be added:

1) A disability insurer could not require a disabled employee to file a claim for Social Security Disability benefits any earlier that the first 36 months of continuous disability unless the employee wishes to do so voluntarily.

2) A disability insurance company would not be permitted to take an offset for Social Security for any period where the insurer denied a claim for disability benefits; and

3) If a private disability claim in “approved” status is later terminated and then reinstated, no Social Security offset could be claimed for any period where the private contract benefits were not paid.

These are common sense reforms that would bring about real and meaningful change in the lives of the occupationally disabled worker. They would save the federal government billions in actual benefit and administrative costs. And, as a bonus, these changes would clean up questionable claims-handling practices within the disability insurance industry.

—————
John Joseph (J.J.) Conway is an employee benefits and ERISA attorney and litigator and founder of J.J. Conway Law in Royal Oak.

In marking our firm’s 25th anniversary, we were provided a special opportunity to look back at some of the important contributions made by our clients who changed the law in a meaningful way. Their cases have been impactful. From healthcare for children to pension security, the work of our clients is still making a difference in the lives of others to this day.

In marking our firm’s 25th anniversary, we were provided a special opportunity to look back at some of the important contributions made by our clients who changed the law in a meaningful way. Their cases have been impactful. From healthcare for children to pension security, the work of our clients is still making a difference in the lives of others to this day.

As we know, in law, we must always keep looking toward the horizon. And when we do, one of our clients who is working on improving the lives of others is Rachel Cuschieri-Murray.

Rachel has been at the forefront of passing a comprehensive mental health parity bill in Michigan. She and her husband became advocates in the children’s mental health community following a healthcare fight seeking mental health benefits for her son.

Rachel has organized advocacy groups, established a nationwide clearinghouse of information for parents seeking assistance with medical reimbursements, and is now working to bring a comprehensive mental health parity law to Michigan. Rachel’s thinking is ahead of the curve nationally and is needed in our state.

The federal Mental Health Parity and Addiction Equity Act was a bipartisan legislative achievement. The MHPAEA was based on solid public policy reasons and sought to improve upon an aspirational parity law passed earlier that didn’t really do much.

The bill’s two chief sponsors, Paul Wellstone, a Democratic Senator from Minnesota and Pete Domenici, a Republican Senator from New Mexico worked together to secure its passage. It was signed into law by President George W. Bush. Both senators had personal family experiences with mental illness and mental health issues. They wisely recognized that mental illness and addiction is nonpartisan.

So, they crafted a law that sought to destigmatize mental illness and create a kind of “parity,” or equality, in the delivery of healthcare benefits. The law and its regulations targeted such things as artificial treatment limitations, unfair cost-sharing obligations, and other barriers to care like onerous preauthorization requirements.

Following the law’s passage, plans could be required to show that coverage for mental health related issues was no more restrictive than for claims seeking medical or surgical treatments. The law’s scope was again expanded in 2010 under the Patient Protection and Affordable Healthcare Act which was signed into law by President Barack Obama.

While the law was a significant legislative achievement, health law and employee benefit practitioners quickly learned of its limits. For example, there is no private right of action to sue under the MHPAEA. There is no right to a jury trial. This is usually the product of lobbying efforts to water down a law’s strength. Also, there is no real relief beyond a traditional breach of contract remedy, so there is occasionally a duplicative aspect to mental health parity claims.

Oddly, the MHPAEA works best in a class action setting since entire coverage groups can be scrutinized and the limitations of widely issued policies can be better examined statistically for their impact on mental health coverage.

So it was that Rachel, in recognizing the disparity of care particularly for teens and adolescents in crisis, set about to change the law. She heard the stories from others about difficulties in securing care. She knew that insurers continued to play to stereotypes in this area.

Realizing just how much was at stake (the lives of children with mental health challenges) and how inadequate the state’s regulatory system is — an ineffectual insurance commissioner, a broken external medical review system, Rachel thought bigger. She and a number of advocates began working to create a mental health parity act for Michigan that would mean something. If her vision becomes reality, the disparities of care will be eliminated. The enforcement rights of those with such claims will be enhanced.

This is no small feat, and it is a game changer. Rachel and those working towards the law’s passage almost succeeded last year during the state’s legislative session. News reports indicate that Michigan’s largest insurer set out to stop the legislation, and this last-minute push succeeded in blocking the bill.

To provide some cover, the state passed a duplicate mental health parity act which essentially mirrors the federal law. Passage of a more ambitious law awaits, but with Rachel Murray in the fight, the future looks bright for those who need it most.


—————

John Joseph (J.J.) Conway is an employee benefits and ERISA attorney and litigator and founder of J.J. Conway Law.

This is the fourth commentary in a series examining Niccolo Machiavelli’s analysis of challenges facing free governments, past and present, and his admonitions regarding the steps needed to preserve critical institutions.

This is the fourth commentary in a series examining Niccolo Machiavelli’s analysis of challenges facing free governments, past and present, and his admonitions regarding the steps needed to preserve critical institutions.

The previous commentary discussed the “office of dictator” in ancient Rome.

The Roman Republic actually had such an office, but it was extremely limited in scope and duration; only put in place to respond to substantial and imminent threats when traditional political institutions were unable to do so.

When the threat was removed, the dictator stepped down and returned the Republic to its prior good order.  At least that was the model, according to Machiavelli, until Julius Caesar abused the office by leading an army with allegiance to him to threaten violence in the heart of the Republic thereby ending free government in ancient Rome.

The previous commentary concluded noting Donald Trump’s statement in a Fox News town hall meeting in April that he wanted to be “dictator for a day” after his possible election as President this November.  He later “walked the comment back” in a Time Magazine interview saying the comment was a “joke.”

The subject of this commentary poses the follow-up question: If not as future dictator, what role does Trump occupy in current politics and is there any parallel to that role in political history?

Trump is certainly not a “role model” even to supporters. On the eve of the Iowa caucuses, a middle-age Iowa woman, interviewed by an AP reporter, laughingly said that while she supported Trump, “I wouldn’t vote for him as my pastor.”

There are likely a substantial number of responsible roles that other supporters would also not want Trump to fill in their personal lives.

Notwithstanding, supporters enthusiastically embrace his “no holds barred” and “anything goes” approach to political practice, including incitements to violence which they discount because it is not aimed at them.  

Before Trump, a person with these flaws would have been automatically disqualified from any political role in America.  Those same flaws, however, would not be in the slightest disqualifying in 16th century Italy if the role in question was that of mercenary.  

Mercenaries or “condottieri” occupied a prominent position in the political structure of the time.  The five major city states (Florence, Milan, Naples, Rome and Venice) all hired mercenaries to initiate and defend periodic, but repeated, military advances against one another.

Machiavelli railed against their role in Italian politics believing they brought ruin to the legitimate interests of the populace at large and the city states in particular.  His critique of their injurious effect was threefold.

First, by definition, mercenaries are “men without any territory.”  As a result, they owe allegiance only to themselves and view the world from that vantage.  Their leaders mistrust everyone.  They conspire against supposed friends, allies, and employers; and, believe others continually conspire against them.

If it is to their advantage, mercenaries shift allegiance or undercut alliances formed by their employers without hesitation.

Second, mercenaries are only paid in times of war.  As a result, they encourage and prolong division among employing city states and foreign interests in lieu of pursuing peace.

Their greatest source of funds is through plunder from the sacking of the territories of adversaries. They can be bribed and also extort employers and the citizenry if that is to better advantage and less risky.

Third, by practicing only the “Art of War,” mercenaries have no knowledge or experience in governing except by bullying, threats, and violence.

Mercenaries are ruthless and cruel. They demand absolute loyalty from troops upon penalty of exile or a gruesome death.  When unchecked, they rule as tyrants.

Donald Trump is the portrait of the modern-day political mercenary.

He reduced the Republican Party from a democratic institution to mercenary troops who either support him, are expelled, or confront “political death.”  RNC funds have become his personal plunder.

As President and candidate, Trump extorts or connives with foreign powers to provide dirt on domestic opponents.  He continually churns division in our body politic to prevent the possibility of peaceful resolution.  

As all mercenaries do, Trump schemes.  He overlays conspiracy upon conspiracy in a form of destructive paranoia that leads him to proclaim delusion as fact.  

Five hundred years ago, Machiavelli reviewed the aftermath of a political world of free government broken by the princes and mercenaries of Italy.

It is that same world Donald Trump now offers to America.

  —————

Samuel Damren is an attorney and author in Ann Arbor.

This is the second commentary in a series examining Niccolo Machiavelli’s analysis of the challenges facing just political institutions, past and present, and his admonitions regarding the steps needed to preserve their continuity.

This is the second commentary in a series examining Niccolo Machiavelli’s analysis of the challenges facing just political institutions, past and present, and his admonitions regarding the steps needed to preserve their continuity.

Machiavelli is a controversial figure from the Italian Renaissance. He combined political experience in the chancery of Florence with noted scholarship and literary skill. By the end of his life, Machiavelli enjoyed greater recognition across Italy as an accomplished dramatist and poet than for the political works for which he is known today.

One of Machiavelli’s original contributions to political theory, contained in “The Discourses on the Ten Books of Livy,” concerns discord. Contrary to the accepted views of other contemporary historians, Machiavelli contended that “disturbances between nobles and the plebeians … were the primary cause of Roman liberty” in the Golden Age of the empire.

The assertion arose from Machiavelli’s more generalized observation that “in every republic there are two different tendencies, that of the people and that of the upper class, and that all of the laws which are passed in favor of liberty are born from the rift between the two.”

In the ancient Roman republic, that “rift” resulted in the creation of separate consuls and tribunes: one selected by Senate nobles and the other selected by a plebeian assembly. These officials could exercise power in enforcing and proposing laws, but they also could obstruct the powers of one another.  

As a consequence, Machiavelli argued that the “people” and the “upper class” were forced to debate, discuss, and productively negotiate proposed laws to the satisfaction of each other. The process was not simply the product of acknowledged mutual dependency.

To ensure the integrity of the process, tribunes were granted the “power to indict citizens … when they commit any kind of offense against free government” as well as the complementary power “to punish those who make false accusations.”    

These powers were routinely exercised during the period where Machiavelli conceived Rome as the “perfect republic.” Without such institutional powers, factions would be permitted, and encouraged, in Machiavelli’s view, to corrupt forums of government where “wise men” had the opportunity to bring just resolution to political discord.

Machiavelli places significant blame for the erosion of these values and the undermining of critical institutions in ancient Rome on the failure of succeeding emperors to place stewardship of the republic ahead of personal ambition. He is far more caustic in his literary denunciations of the desire of factions in Italy’s 16th century elites to be “worshipped” rather than govern and thereby “become stained with every sort of filth.”

In one of his famous plays, “The Art of War,” Machiavelli directs his protagonist, Fabrizio Colonna, to deride such “princes” –

“They believed it was sufficient to be able to think up a clever riposte … to display wit and quickness in speech; to know how to concoct a scam; to adorn oneself  with precious stones and gold; to slumber and dine in greater luxury than anyone else; to keep plentiful lascivious pleasures at hand; to treat one’s subjects with avarice and arrogance; to become enfeebled with indolence; to award military promotions in exchange for favors; to display contempt if anyone showed some praiseworthy way; and to want their words to be accepted as the responses of oracles.”

Similar disturbances in MAGA politics now work to corrupt American political institutions.

The next commentary in this series presents Machiavelli’s views on the Roman  office of dictator. And yes, they had such an office in ancient Rome; but no, it is  not what you think.


  —————

Samuel Damren is an attorney and author in Ann Arbor.

Over my 40-year legal career — with 20 of those years spent on the prosecution side — I’ve learned a lot about the role of extreme punishments in Michigan’s legal system.

Over my 40-year legal career — with 20 of those years spent on the prosecution side — I’ve learned a lot about the role of extreme punishments in Michigan’s legal system.

I firmly believe that the primary function of our criminal legal system is to ensure accountability and public safety. An overarching consideration and ethical requirement for prosecutors is making an effort to achieve justice, and that means justice for everyone: the community, the victim, the victim’s family and friends, the accused, and the people in the accused’s life.

That’s why I’m proud to support Michigan’s Second Look Sentencing Act. This legislation would allow incarcerated people to petition their judge for a reduction of their sentence after serving at least 10 years if they are found to no longer pose a risk to the community.

Some have the mistaken idea that the longer someone is incarcerated, the “more” justice there is. Far too often, our criminal legal system conflates concepts of public safety and accountability with incarceration.

Extreme, lengthy prison sentences, particularly in such large numbers, produce diminishing returns on public safety.

Nevertheless, Michigan continues to use long-term incarceration and punishment in the promise of more community safety.

I believe that there are some individuals who will never be able to be safely released into the community. When I reviewed individuals eligible for parole as an elected prosecutor, about 38% of the time, I wrote letters opposing parole due to what I

believed to be their continued danger to the victim or society, or due to their incomplete rehabilitation.

Instead, research and the experiences in other states and countries with less punitive systems shows that extreme sentences disproportionately impact the most marginalized individuals in our society. That includes persons of color, especially Black Americans.

In Michigan, 68% of the people serving life and long-term sentences of 50 years or more are

African American. These unnecessarily long sentences tear apart families and cause ripple effects of trauma that make it more likely that the children of incarcerated persons will become involved with the criminal legal system.

Our culture in the United States is uniquely punitive.

Other countries find that they can safely allow incarcerated persons to re-enter society after 15 years or less by utilizing exceptionally well-trained corrections staff, focusing on what is needed for rehabilitation, and keeping incarcerated individuals connected with their families and communities as much as possible.

Of course, even those countries do have provisions for keeping incarcerated those few individuals who continue to pose a substantial risk of causing harm or committing new crimes.

Unfortunately, because we have created a culture that promotes the idea that justice is the same thing as long prison sentences, that is sometimes what victims and their loved ones expect.

For decades, the two most frequent comments I heard from victims were: “I want to know why they chose me or my child to victimize,” and “I want to help make sure they don’t do it to someone else.”

Often, “not doing it to someone else” means they want the person who caused the harm to get needed help, including therapy, support for their families, and meaningful opportunities to heal and truly be rehabilitated.

Lost in the punishment paradigm are the very important voices of victims who truly want a system that rehabilitates and provides a second chance. Lost is the success that other jurisdictions have with shorter sentences and increased options for

review and possible release. Lost are the voices of those who want us to invest some of the huge expenses associated with long sentences to instead provide meaningful healing resources for victims, their families, and for the defendants’ families too.

Michigan’s criminal legal system has too narrowly interpreted what “justice” actually means for the entire society. A more humane, effective system would provide a wide variety of potential options that can be more effective in actually addressing current harm and preventing future harm.

The Second Look Sentencing Act would be a significant step in the right direction, and I urge Michigan legislators to pass this important legislation.

—————

Carol Siemon is the former Ingham County Prosecutor.

It has been more than 30 years since the Michigan legislature imposed “caps” on medical malpractice cases. Since that time there have been only a few challenges to the law.

A. Vince Colella
Moss &?Colella P.C.

It has been more than 30 years since the Michigan legislature imposed “caps” on medical malpractice cases. Since that time there have been only a few challenges to the law. In fact, the paucity of challenges is rather curious, especially given the rather flimsy constitutional grounds on which the law sits.

Putting aside the legal merit of limiting recovery on damages, from a public policy perspective, it just doesn’t make sense. In the late 1980s early 1990s, when states were adopting laws capping damages on mistakes made by doctors and hospitals, studies over the following decades suggested that the industry-proclaimed “health crisis” was not rooted in reality and was likely the product of fear mongering to lower insurance premiums for health care
professionals and limit exposure to legitimate claims of injury and death related to sub-standard health care.

For example, one study from the Center for Justice Democracy at New York Law School found “indisputable” evidence that “caps” on damages in medical malpractice cases (euphemistically referred to as “tort-reform”) produced more medical errors and higher health care costs.

Perhaps more importantly, the study determined that the adoption of damage caps did not increase the number of physicians, shattering the myth that doctors were unable to enter the practice of medicine due to the high cost of insurance and exposure to significant jury verdicts.

Still, notwithstanding data to the contrary regarding them, Michigan joined a number of other states in the passing of reform placing caps on damages. Following the legislative enactment, medical malpractice cases began to percolate through the appellate system centered on the constitutionality of the new law. In Zdrojewski v Murphy, the first appellate panel to address the issue — in an unpublished opinion — the court embraced the propaganda of a “perceived crises in the health care system” and found the public policy for “reducing medical malpractice liability” (the purported impetus behind the law) was sufficient to pass constitutional muster.

While the special interest of protecting doctors and their insurance carriers from having to be held fully accountable for medical errors influenced one panel of judges, the Court of Appeals quickly reversed course. In Wiley v Henry Ford Cottage (a published opinion) the court was outwardly critical of its predecessor opinion and re-emphasized Michigan’s Constitutional guarantee to a trial by jury did not end at determining liability but extended to the determination of damages. The Wiley court aptly pointed out that the fatal flaw in the Zdrojewski opinion was that the existence of a medical malpractice claim is not a creature of the legislation, therefore not subject to legislative abolishment.

In other words, “while the Legislature may take away what it has given, it may not take away what the Constitution has given.” The fundamental unfairness of the caps is simple: arbitrarily reducing the amount of damages awarded by a jury handicaps its ability to provide full justice.

Unfortunately, the Wiley decision did not stand. Under the steady hand of a Michigan Supreme Court regime criticized for wreaking havoc on the rights of personal injury victims, Justice Clifford Taylor penned an opinion that would lead to three decades of discounted justice. Interestingly, the case that cemented the constitutionality of medical malpractice caps did not involve medical malpractice!

In Phillips v Mirac, the issue before the Supreme Court was whether a statutory damage cap on lessors of automobiles, (i.e., rental cars, for injury caused by the negligent operation of the vehicle) was constitutional. In Phillips, the Supreme Court demonstrated its keen ability to perform the legal gymnastics of a proper constitutional analysis while pivoting toward a retrofitted opinion that protected the economic interests of the insurance industry. In finding caps to be constitutional, the court provided statutory examples of limitations on recovery. Of course, none of the anecdotal illustrations involved pure common law causes of action independent of statutory origin.
Conspicuously absent from Justice Taylor’s opinion in Phillips is any reference, analysis, dissection or even mention of the Wiley decision. Perhaps in her dissent, Justice Elizabeth Weaver said it best: “No industry should be allowed to shift its burden of responsibility and accountability to the shoulders of the severely injured merely because it claims to be in crisis.”

The time is now. Caps on damages have the ulterior consequence of de-incentivizing doctors to behave carefully. Lowering the risk of malpractice lawsuits weakens the deterrent factor necessary to maintain responsible care, judgement and decision making of medical professionals. A jury verdict is not an “award” or “compensation,” these are terms associated with things we achieve or earn. Rather, a verdict is a monetary measurement of human suffering. The idea that caps lower insurance premium costs, increases the number of health professionals and creates greater access to health care has been debunked.

The only true consequence of placing a cap on recovery for those who have had the unfortunate experience of unimaginable suffering due to mistakes made by doctors and hospitals is cheating victims of their right to fully recover what has been lost or destroyed.

––––––––––––

A. Vince Colella is a co-founder of personal injury and civil rights law firm Moss & Colella.