Individuals who receive short term disability and long term disability coverage as a benefit of their employment are often shocked when their insurance carrier unreasonably delays the review and approval of a claim or unjustifiably denies or terminates their disability benefit. Despite a legitimate claim and medical proof that their illness or injury prevents them from working, many insureds find themselves holding a letter from their insurance company explaining that, based on its review of the claim, the insured is not disabled and benefits are therefore denied or terminated. The letter often contains incorrect information about the insured’s health; it tends to omit important information and facts; and the carrier very often points to the opinion of a “consulting physician” who read the medical records and attempted (insincerely) to contact the insured’s physician as the basis for the denial. Upset, scared, and frustrated, the insured appeals the denial without fully understanding their rights and “rules of the game”. Unfortunately, not understanding the appeals process and what must be included to overcome a denial of benefits in an ERISA claim puts the insured at a disadvantage. Moreover, the failure to appeal within the 180 day deadline may prevent the insured from further pursuing their right to these benefits.
Many employer sponsored short term disability and long term disability policies fall under the Employee Retirement Income Security Act of 1974 (ERISA) and are thus subject to the deadlines, parameters, and limitations of that law. ERISA is a federal statute that sets minimum standards for most voluntarily established employer or group retirement, health, and disability plans. These plans are provided by an employer or large group such as the ADA, AMA, and ACA. The terms of these plans dictate the minimum requirements for coverage and how a claim is to be reviewed. ERISA does not cover health plans established or maintained by government entities, churches, or policies procured directly by an individual on their own behalf. While ERISA was allegedly designed to benefit the employee and encourage employers and large groups to provide such benefit plans to their employees or members, the parameters within this law often work against the insured if they are not aware of the limitations and their rights. Insurance companies including Cigna, Aetna, MetLife, Mutual of Omaha, Northwestern Mutual, Unum, Prudential and numerous others understand what is required for an insured to overturn a denial and have been well trained to include within the claim file the information necessary to strengthen their position and avoid a court order overturning a wrongful denial of benefits. The insured or claimant on the other hand, is usually unaware that they must appeal the denial within 180 days if they do not want to lose the right to pursue their benefits and that the information contained within that Appeal is the only information about their situation and claim that a court will review should a lawsuit need to be filed.
Basically, the Appeal is the insured’s trial, as very little additional information can be added to the file once the Appeal has been filed and a Final Denial issued by the insurance company. ERISA claims are federal court claims and are not tried by a jury. There is limited discovery and the standard of review, in most cases, favors the insurance carrier. The standard of review is the standard utilized by the Court when reviewing the claim and deciding if the insurance carrier’s actions were wrong and should be overturned. In many instances, the standard of review is “arbitrary and capricious”. Basically this means that the Court must not only determine that the insurance company’s denial was wrong but also that the denial was “arbitrary and capricious” or wholly unreasonable. Therefore, if the wrongful denial does not rise to that extreme level then the denial of benefits is upheld by the Court. Insurance companies have become extremely savvy about this standard and do their best to avoid an arbitrary and capricious denial. It is thus up to the claimant to make sure all proof of disability and evidence of arbitrary and capricious behavior is clearly documented and included in the appeal. Failure to do so can make it very difficult to win if a lawsuit needs to be filed.
At Disability Insurance Law Group we are familiar with the tactics used by insurance companies to try and avoid having a denial reversed and have been very successful at winning these claims at the appeal level so that our clients’ benefits can be reinstated quickly and without the need for a lengthy lawsuit. We work directly with our clients’ physicians, employers, family, and our own consultants to prepare a thorough appeal that lets the insurance company know that should they uphold their denial we are ready and willing to file a lawsuit. We have a reputation among the insurance companies for fiercely defending our clients’ rights and aggressive litigation tactics. In fact our clients have included many adjusters whose own benefits have been denied by their employer/insurance company. For additional information about ERISA appeals please feel free to visit our website www.DiLawGroup.com or contact us via the website or our toll free telephone number (888) 644-2644.