Most disability insurance policies contain clauses that provide for the denial of disability claims for the first policy year if the disabling impairment was a pre-existing condition during a period of time immediately before the policy took effect – called the look-back period. One common tactic insurance companies use to deny claims is to tie the qualifying disability back to diagnoses, medical care, medication taken or treatments received during the look-back period – and to call the related nondisabling impairments pre-existing conditions for purposes of denying the otherwise-valid claims, even when the connections are tenuous.
Questionable links not enough
Many courts do not agree with this excuse for denying claims. Instead, they require the connection between the earlier medical issue during the look-back period (often three or six months) and the current disabling condition to be strong, significant or substantial. For example, it would likely be valid for an insurance carrier to deny a claim based on a pre-existing condition if during the look-back period the claimant had the same impairment on which they base the current claim. For example, if they had a clear diagnosis of lupus during the look-back period and later applied for disability benefits based on more advanced lupus, the denial based on a pre-existing condition would probably be reasonable. However, judges have been skeptical of attempts to link earlier medical issues with current disabling conditions when the link is questionable. In the well-known case of Bradshaw v. Reliance Standard Life Insurance Company, the plaintiff suffered a disabling stroke nine days after having given birth, for which she filed a long-term disability claim. The insurance company denied the claim, saying that her early-stage, healthy pregnancy during the look-back period was a disqualifying pre-existing condition.
She argued to a federal appeals court that the insurer’s assertion that the pregnancy was a pre-existing condition that “contributed to” the stroke was an “attenuated definition of causation.” The court disagreed with Reliance, explaining that the four steps required to link the pregnancy with the stroke (pregnancy caused high blood pressure caused preeclampsia caused the stroke) are “too many.” It was unreasonable for the insurance company to deny the claim using the pre-existing condition exclusion based on such a shaky link. To be a pre-existing condition, the court requires that the earlier condition “substantially contribute” to the disability. As one federal court put it, the question “becomes a matter of where we draw the line on chains of causation.” Some small contribution to the ultimate disability is not enough, especially considering that the law views disability insurance policies as positive supports and protected interests for those they insure.