A denial of disability insurance benefits too often comes as a surprise to individuals who file legitimate claims and are genuinely unable to competently perform their job duties with reasonable continuity. Making the decision to apply for disability insurance benefits is difficult; but when one determines that it is necessary, most individuals who have paid for these policies or are covered by a group policy expect the insurance company to fairly and objectively review their claim and pay the disability benefits to which they are entitled under the policy terms. Unfortunately insurance companies are not always inclined to timely review claims and pay the benefits owed under the policy. This is true for individual disability insurance policies (those taken out and paid for directly by the insured) and group policies (those procured by an employer as a benefit of employment or through a professional group/association). The focus of this blog is appealing the denial of group policies that fall under the Employee Retirement Income Security Act of 1974 (ERISA). It should be noted that filing a detailed and thorough appeal where a denial has been issued under an individual or group policy is extremely important; however under ERISA claims an appeal is required before a lawsuit can be filed and litigation is primarily limited to the information in the claim file at the time of the final denial.
Lincoln Financial Group Buys Liberty Life Assurance Company for $3.3 billion
Lincoln Financial Group has announced that it has entered into an agreement to acquire Liberty Life Assurance Company of Boston from Liberty Mutual Insurance Company for $3.3 billion. The acquisition is expected to be completed in the second quarter of 2018. With this acquisition, Lincoln Financial is posed to become number one in combined fully insured disability sales market share in the group benefits area, as well as third in the combined total life and fully insured disability sales market share. It is not yet clear when the full transition will take place, whereby current Liberty Mutual customers will be dealing directly with Lincoln Financial.
The Department of Labor Implements New Regulations to Increase the Protections Afforded to Disability Insurance Claimants
Section 503 of ERISA requires employee benefit plans to provide written notice to any participant or beneficiary whose benefit claim has been denied, and to provide the claimant a full and fair review of the claim. Despite these protections, claimants face an uphill battle in attempting to overturn wrongfully denied claims. On December 16, 2016, the Department of Labor ("DOL") announced the release of a final rule to strengthen consumer protections for workers making claims for benefits under their workplace group disability insurance plans. The final rule was to apply to claims submitted after January 1, 2018. However, after significant complaints from the insurance industry alleging, without any factual underpinnings, that the final rule would increase the cost of disability insurance, decrease workers' accessibility to the coverage, and cause a surge in litigation, the DOL announced on November 4, 2017 that it was delaying the implementation of the final rule by 90 days. The DOL allowed the insurance industry to provide data to support its claims and permitted claimants' advocates an opportunity to respond. The DOL was flooded with comments from claimant advocates explaining the necessity of the final rule. In contrast, the DOL found the "data" produced by the insurance industry underwhelming and determined that it simply did not support its allegations. Accordingly, the final rule will go into effect April 1, 2018.
