32099 South Woodland Road
Cleveland, Ohio 44124
216-789-8775
216-831-8544 (facsimile)

Advantages

The use of Claim Appeal Fiduciary Services, Inc. to process final claim appeals for your ERISA-governed plans is not only a clear Best Practice, but also delivers only advantages to your plan participants. Despite the best of intentions, companies that sponsor ERISA governed plans, or insurance companies that make money selling insurance are looked upon with suspicion when they process their own claim appeals. When any entity handles all levels of appeal, it is difficult to establish that the appeal is handled by a person or entity that is not subordinate to the prior decision-maker, as required by the claim regulations. In such a case there remains a strong perception of self-dealing. This lack of independence in the appeal process negatively impacts the integrity of the plan, increases risk and destabilizes the costs of providing valuable employee benefits.

"A fiduciary's duty of loyalty to the beneficiaries might be compromised by the fiduciary's own self-interest. Common sense tells us that this rationale is applicable both to decisions involving plan interpretations and to decisions involving factual determinations; in both, the same conflict of interest operates such that a conflicted fiduciary may favor, consciously or unconsciously its interests over the interest of plan beneficiaries." Torress v. Pittston, Co., Inc., 346 F.3d 1324 (11th Cir. 2003).

In pension plans, 401(k) plans and self-insured disability and medical plans, corporations and their officers and employees have increasing concerns about corporate governance, conflicts of interest, and fiduciary authority and liability. Courts consistently take a dim view of conflicted fiduciaries and in many judicial circuits, the obvious conflict results in a less deferential standard of review. Overall, a lack of independence:

Negatively impacts the integrity of the disability plan;
Increases risk and destabilizes costs;
Implicates corporate governance and creates potential fiduciary liability; and
Results in conflicts of interest that increase judicial scrutiny of decision-making and may violate corporate conflict of interest rules.

The solution to all of this is CAFS. Substantial advantages to using CAFS as the independent fiduciary for final claim appeals include:

Limited liability for company employees (individuals or committees)
No need to continually train and keep up to date of developments in law
Devotion of the proper time and development of the required expertise
Consistency in rulings
A fresh look that cures process errors
No conflict of interest
Efficiency in expense and cost
Favorable perception of employees and claimants
No burdens on internal employees' time (litigation and multiple claims)
No difficulty in scheduling meetings and meeting claims deadlines
Deflected targets for potential lawsuit
Improved quality, timeliness, reliability and perception
Decreased litigation costs because of a sophisticated approach and a lack of any conflict of interest.
Reliability, stability, and efficiency.

There are no disadvantages to using CAFS to process final claim appeals for your ERISA governed pension, short and long term disability and other ERISA plans. Indeed, with CAFS' fully integrated approach, your ERISA plans will operate more efficiently and with more integrity.