Recently the United States District Court for the District of Colorado determined an insurance provider wrongfully terminated a client's long-term disability (LTD) benefits. Paquin v. The Prudential Insurance Company of America highlights potential issues for others receiving benefits for an extended period.
In 2003 the claimant contracted encephalitis, inflammation of the brain, from a mosquito infected with West Nile Virus. The viral infection caused him to sustain brain damage and cognitive difficulties that interfered with his job. Through his employer, the claimant was insured for LTD benefits.
The insurer, Prudential, approved the claimant's benefits from April 2004 through the beginning of January 2015, with a short termination early on when the claimant unsuccessfully attempted to return work. Prudential reviewed the claim periodically and continued to determine the claimant qualified for benefits.
However, in early January 2015 Prudential terminated the claimant's benefits. According to the case documents, the termination decision was based "in large part" on an independent neuropsychological test and Prudential's resulting conclusion that there was insufficient evidence of continued impairment. Following two unsuccessful appeals, the claimant filed a lawsuit under the Employee Retirement Income Security Act (ERISA).
Court findings and conclusion
The court acknowledged that an insurer can deny or terminate a claimant's benefits even if it paid benefits prior to the denial. However, in this case the court found the evidence supported the claimants right to continued benefits and that Prudential's decision to terminate benefits after nearly 11 years was an abuse of discretion. Prudential must pay the claimant past due benefits with interest and reinstate his claim. The judge also added that the claimant may file a motion to recover attorney fees and costs related to the claim.
Remember, past LTD benefits payments are not a guarantee of future benefits payments. Be wary if your insurer requests independent evaluations and the findings are inconsistent with other's doctor's conclusions. If your insurer unfairly terminates your claim, you have options. An experienced insurance law attorney can help you learn more about your next steps.