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I am an attorney with over 20 years of experience representing individuals who have been unfairly denied long-term disability insurance or have had their disability benefits terminated. Based on that experience, I know how difficult and trying it can be to deal with any insurance company on a disability claim - - both the law and the procedure relating to disability insurance claims are stacked against the claimant. Consequently, I have started this blog as a resource for those who are fighting for justice against their insurance provider.

 

The Disability Insurance Claim Process:

The Basics

Long term disability benefits are generally provided by employers pursuant to the terms of an underlying insurance contract, referred to as “the plan.” While the provisions of most disability insurance plans must comply with the requirements of the Employee Retirement Income Security Act (ERISA), the plans are still contracts and the insurance companies who draft them have wide latitude in setting the contract terms. However, nearly all plans share the same basic process:

1. First, the Application - - typically a preprinted form to be completed by your doctor.

2. Second, the Insurance Company’s review and decision.

3. Third, the Administrative Appeal.

Thereafter, if a claimant’s administrative appeal is unsuccessful, the claimant may initiate a lawsuit in Federal Court to challenge the denial decision. However, this federal lawsuit is limited in two very fundamental aspects - - (1) there is no right to a jury, and (2) the Federal Judge’s review of the case is generally limited to reviewing only what was provided to the plan administrator during the appeal process. Moreover, depending on the degree of discretion that the underlying plan bestows on the particular plan administrator, the Federal Judge’s review may also be limited to determining only whether the plan administrator abused that discretion in making the denial decision, and not whether that decision was in fact right or wrong.

Needless to say, this process is slanted in favor of the insurance company rather than the claimant.

The Administrative Appeal Process:

The Stacked Deck (Part I)

 

Nothing better illustrates the inherent unfairness of the disability insurance claim process, as well as the cold and calculating nature of disability insurance companies, than the standard “notice” that insurance companies must provide claimants after a denial decision. Under the Employee Retirement Income and Security Act (ERISA), which is the Federal law that governs most long-term disability insurance claims, a person who has been denied disability benefits, or had prior benefits cut-off, must be provided notice of their right to appeal the decision pursuant to the insurance companies administrative appeal process. This appeal process is almost always a prerequisite to filing a lawsuit and is very important because any subsequent judicial review will likely be limited to a review of the documentation provided to the plan administrator.

However, the insurance companies almost always fail to include that “little detail” when they inform a claimant of a benefit denial. Instead, in their letter notifying the claimant of a benefit denial decision, insurance companies almost always simply provide the minimum notice required under ERISA: “If you wish to appeal this determination, you or your representative may do so by submitting a written request within x number of days” (usually 180 but could be as short as 60 days).

Obviously, what they leave out is that whatever you submit with your appeal will likely be all that a subsequent Court will ever see. And, unfortunately, the results can be tragic. For example, one of the very first clients I ever represented in a long term disability case - - I will call her Mrs. Wilcox - - was an older woman who had worked for the same large manufacturing company for some 20 years before an illness prevented her from continuing to work. Mrs. Wilcox was provided a “LTD claim form” from her employer’s HR department, and she took it to her doctor and he signed it, and she then submitted the form as directed but was denied her benefits. In the notice letter Mrs. Wilcox received, the insurance company only provided her the same language that I quoted earlier - - “if you wish to appeal, you must submit a written request …. “

Which is exactly what Mrs. Wilcox did. She sat down and drafted a long sincere and heart felt letter in which she described how important her benefits were to her financial security and how she had limited savings, and would the company please reconsider. However, the LTD form she had submitted earlier was not sufficiently filled out and crucial medical documents had not been provided, and what Mrs. Wilcox really needed to do was submit those missing medical records. Unfortunately, by the time she consulted with me, after her appeal has also been denied, it was too late.

I have always considered this lack of notice from insurance companies about the actual significance of the appeal process to be reprehensible - - the companies appear to deliberately downplay the importance and quite literally make it seem like the administrative appeal is a simple matter of “submitting a written request”. In order to avoid the same fate as Mrs. Wilcox, every disability insurance applicant should consider consulting with an attorney if their application has been denied or their benefits terminated.