For the last 35 years, we have been dealing with long term disability insurance carriers’ refusals to pay the claims filed by our clients. The excuses covered every possible reason for non-payment. “Your client is not covered” they would argue, or “he waited too long to file his LTD claim.” Other carriers would claim, “the medical evidence does not support disability” or even, “our own medical professionals disagree that the medical conditions keep her from going back to work.” I could go on and on about the hollow reasons presented by insurance companies as support for not paying valid LTD claims over almost four decades of litigation. Suffice to say that it is clear to me that private insurers love to accept your (or your employer’s) premiums to purchase Long Term Disability Insurance coverage, but they don’t much like to pay a dime in LTD benefits to their insureds.
Nor can I carve out an exception for particular LTD insurers who actually pay LTD benefits on a regular basis. Over the years, virtually every insurer joins the line in denying our clients’ benefits outright, or cutting off benefits within the first year or two of LTD payments, despite medical evidence that the insured’s disabling medical conditions either stayed the same or got progressively worse. As a result, we have been forced to file claims against Cigna, Unum, Provident, The Hartford, Aetna, The Standard, United/Mutual of Omaha, Lincoln, AIG/American General, Mass Mutual, the Equitable and New York Life, the Principal, Guardian, Aflac, Northwestern Mutual, Met Life, Sun Life and State Farm, Reliance Standard, Liberty Mutual, and others. Most of these disability insurers have become named defendants in lawsuits we have filed in Federal Courts around the Southeast United States on behalf of our clients, claiming arbitrary denial of valid LTD claims using one or more of the excuses mounted above (some listed in my representative cases https://solowaylawfirm.com/about-us/our-attorneys/daniel-m-soloway/). Whether by settlement or judgment, most of these claims have resolved very favorably for our clients. Nevertheless, the claim denials continue to occur on a regular basis.
Numerous issues arise in the context of litigating a disabled person’s entitlement to LTD benefits. This article will summarize some of these issues and provide helpful information where appropriate. It is not intended to cover every possible scenario and indeed, disability insurers continue to come up with novel invalid reasons for refusing to pay benefits to our clients. Thus, while some of these issues may apply to you, it is always best to call our office for specific advice that applies to your particular LTD carrier and your specific medical conditions.
Issue One: Are You Covered?
Simple question, right? Not really.
First, let’s discuss whether you even know if you have LTD coverage. Obviously, if you went out and purchased “individual” disability coverage, and paid the monthly premiums to the insurer, then you know that you are covered for disability as a general matter. Whether you get any benefits for your particular disabling condition forcing you to stop work is a different matter, but at least you can state that you are actually covered for long term disability.
The problem is that most people don’t have the extra money sitting around to purchase an individual policy from a local independent insurance agent. Instead, most people who have LTD coverage receive such insurance from their employers as part of group coverage for some, most or all of the company employees. Where the employee is required to pay for a portion of the monthly LTD insurance premium, that employee usually knows that he has such coverage. But where only the employer pays the premiums for the group coverage, the employees within the group may not even be aware that they have such LTD coverage. For these persons, my advice is simple- ask your employer, speak to the company benefits person, consult your employee handbook, and do whatever you can to determine whether you have such group LTD coverage.
Whether you or your employer (or a combination thereto) pays for LTD coverage, that fact doesn’t always end the inquiry of whether you are covered. For instance, almost every group LTD plan I’ve reviewed over the last 35 years requires the eligible employees to be “full-time” workers, meaning that they are averaging at least 40 hours per week. Certainly, some employers will also cover part-time workers averaging at lease 20-39 hours, but you get the point. I have seen LTD insurers over the years deny coverage merely because, immediately before the employee stops work, they had reduced their hours in order to try and continue to stay on the job. No good deed goes unpunished, as they say, but insurers will often hang their hat on any excuse available to deny coverage. As for this excuse of reducing hours prior to stopping work completely, we have succeeded in establishing coverage in every one of these claim denials.
The “full-time” employment coverage provision is only one of many technicalities used by carriers to deny our clients’ LTD claims. For instance, many insurers state in their policies that even full-time employees are not covered until the “effective date” of the policy. So, for instance, if the “effective date” is 6 months after you begin work, a disability occurring during that first 6 months of employment is not covered. Also, many LTD insurers include a “pre-existing conditions clause,” which uses certain dates even after the “effective date” of coverage to defeat the coverage granted by the policy. The LTD plan may exclude coverage for disability occurring within the first year of coverage if you suffered from or received medical treatment for the same disability within the 6 months before the coverage became effective. For example, let’s say you were injured in a car accident 11 months after your effective date of LTD coverage, suffering a severe back injury that puts you out of work. If the insurance carrier finds out that during the 6 months before you became insured, you complained about a backache to your family doctor and were told to take Tylenol, the carrier will often deny coverage using this “pre-existing condition” exclusion from coverage. For a backache! We ultimately litigated, and won, that LTD case as well, showing the pre-existing condition to be entirely different than the disabling condition. The point, however, is that technicalities and “fine print” exclusions from coverage are often used by disability carriers to deny LTD claims no matter how flimsy the defense to claim might seem.
Even where the LTD carrier admits to the existence of coverage, we have seen numerous instances where the insurer claims that such coverage “terminated” because the insured stopped work before filing his or her claim. Of course, virtually every LTD plan contains language stating that coverage terminates when the employee is no longer employed. But this provision is meant to exclude coverage for employees who quit or were fired from work, not when they stop work because they become disabled. Yet carriers will use pretzel logic to argue that because the employee was no longer at work when he became disabled and applied for benefits, the LTD policy had terminated and was no longer available to the insured employee. We have never lost a claim where this ridiculous defense has been raised by any insurer, but that does not stop them from asserting such a defense to paying benefits.
Issue Two: Is Your Disability Covered?
Every LTD policy has certain disabilities that are completely excluded from coverage and some disabilities that allow for coverage limited to only 2 years, as opposed to the usual benefit period to age 65 or your NRA (normal retirement age). For instance, most LTD policies do not cover, and will therefore not pay any benefits for any disability:
- unless you are under the regular care of a physician;
- caused by your commission or attempt to commit a felony;
- caused or contributed to by your being engaged in an illegal occupation; or
- cause or contributed to by an intentionally self-inflicted injury.
Seems simple enough, right? While it is fairly simple for reasons 2, 3 and 4, we have had LTD carriers deny benefits under reason number 1, where the insurer denies benefits claiming that its insured was NOT under the “regular care” of a physician. Where our client missed a few appointments (due to circumstances beyond their control), or where the physician saw our client periodically but used others in his office who were not physicians (nurses, physicians assistants and other aides), LTD insurers have claimed that such physician care was not “regular” enough to be covered! Yet not once in 35 years have we lost a claim of LTD benefits under such a tortured view of a doctor’s regular care of his patient, even where the doctor only saw his disabled patient once or twice a year. Yet insurers are quick to adopt any policy defense its claim adjusters feel has even an outside chance of success in justifying non-payment of disability benefits.
Even where the claim is not specifically excluded from coverage, LTD carriers will use coverage limitations to justify an early benefit termination. For example, virtually every group LTD plan limits “Mental and Nervous Conditions” causing disability to only 2 years of benefits unless the insured is hospitalized after these 24 months. Yet where an intervening physical disability is a concurrent cause of the employee’s inability to work, the insurer will still refuse to pay more than the 2 years of benefits despite physical disability being eligible for payment to age 65 or normal retirement age. Federal court litigation is the remedy for such refusal to pay additional benefits, something the attorneys at the Soloway Law Firm engage in every month for our long term disability clients.
Issue Three: What Law Applies to My LTD Claim?
While most individual policies are paid for by the named insured and not the employer, most group policies insuring a group of employees are paid for by the employer as part of the “fringe benefits” provided to its employees. The law of the State of Florida governs most carrier refusals to pay individual policy benefits. However, Federal law known as “ERISA” governs most refusals to pay benefits to a member of the group of employees insured for LTD under the Plan. And this difference of law can be devastating to your claim.
For example, if the insured bought his own individual plan from some independent insurance agent in Northwest Florida, then the law of Florida applies to any benefit termination. Our state law is very consumer-friendly, allowing almost unlimited discovery of facts, a trial by jury on all issues, and the award of attorney fees and taxable costs to the successful claimant. We can present your LTD case to the jury through your friends and family members and other witnesses such as your long-term treating physician and other medical and psychological expert witnesses. If the jury agrees that you are disabled, the state court judge will enter judgment in your favor and also award your attorney fees and taxable costs against the LTD insurer that denied your initial claim or cut off your disability benefits. You will be placed back on monthly disability benefits and your back-due benefit award will include interest on the money withheld from you by the insurance company.
Unfortunately, the same fairness and simple remedy for insurance carrier misconduct is not available to most employees in America. In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA) (https://www.dol.gov/general/topic/health-plans/erisa). While the purpose in enacting ERISA was to protect employees from a company’s mismanagement of employee funds, insurance companies have used ERISA as a shield from their responsibilities to their insureds.
Under ERISA, you don’t get a jury trial. Instead, a Federal Judge decides your claim. Under ERISA, you cannot present evidence before this Federal Judge either. No witness can testify at your trial, not friends, family, nor your medical doctors and other providers. Instead, you must present all the evidence you have to the insurer during the “administrative review process,” and the Federal Judge thereafter in a Federal Court lawsuit merely reviews that evidence already submitted to the injurer’s claim adjuster and appeal specialist.
And here lies the worst part of Federal Court review of your ERISA LTD claim. If the Federal Judge agrees with us that you are disabled and the insurer was wrong in finding otherwise, YOU STILL DON’T WIN! That’s correct, you read the statement right, the group insurance carrier still gets away with the benefit denial if all you show is that you are disabled and their conclusion was absolutely wrong. Instead, you must prove a virtual impossibility, that the carrier was not only wrong, but also, its claim denial was “arbitrary and capricious.” This is a narrow legal standard of review meaning basically that the insurer’s denial was overwhelmingly unreasonable and unaccountable given the evidence presented in the claim. This ridiculously high standard of review is so difficult to meet that few ERISA cases resolve in favor of the claimant. More often than not, you will read that under ERISA, the insurance carriers win almost 90% of the time in Federal Court because they simply pay a medical doctor to review your medical records and provide a written opinion indicating that you are clearly able to work and therefore, not disabled. While the Federal Judge may not agree with this insurance doctor, you still don’t win the case because the judge rules that since the insurer had a qualified “independent” doctor review your records, the decision made by the insurer might be wrong but it was not “arbitrary and capricious.” Thus, the judge finds, you lose your ERISA claim for LTD benefits.
With such terrible law, you may ask, how does the Soloway Law Firm prevail for its clients in their ERISA LTD cases? The answer is that after 35 years of litigating these federal disability claims, we’ve developed numerous strategies against these LTD carriers to build and win your ERISA cases. Whether your claim is against Cigna, The Hartford, UNUM, Provident or Aetna, we work hard to generate the evidence necessary to prove the extent of your disability. If your carrier is The Standard, Mutual of Omaha, Lincoln, AIG/American General, Principal, MetLife, Liberty Mutual or Reliance Standard, we get involved as early as possible, well before your appeal, to anticipate all possible defenses to paying your valid claim and thus guard against improper claim denials and benefit cutoffs. Whether your carrier is Mass Mutual, New York Life, The Equitable, Guardian, AFLAC, Northwestern Mutual, Sun Life, State Farm or even a third-party administrator like Sedgwick, we force them to comply with every federal regulation making up the ERISA review process, in order to establish their failures and thus succeed in winning your case before the federal judge.
Conclusion:
Winning your Long Term Disability Claim is no easy matter. Over the last 35 years, we have learned of most of the technicalities relied on by insurers to deny claims. We have met them on the Federal Court battlefield hundreds of times, fighting for our LTD clients in order to force a reasonable settlement or litigate a successful end whereby our client is put back on claim for future benefits until they reach retirement age, with an award of back-due benefits with interest, and attorney fees and costs if possible. Where necessary, we can appeal our clients’ cases to the Federal Courts of Appeals and the U.S. Supreme Court, and our firm has actually presented argument in these high courts. Our clients deserve aggressive lawyers taking on these billion dollar insurers, and we fight these battles the old fashioned way – through simple hard work, integrity and ethics, and a belief that our disabled clients deserve victory in their claims for long term disability benefits.