An issue in every federal case that reviews a denied or terminated long-term disability insurance claim is what standard of review the court should apply. Normally, ERISA governs an LTD policy obtained through an employer. ERISA is a complicated federal law that sets standards and procedures for insurers and their administrators when they process LTD claims.
On September 26, a U.S. magistrate judge in Ohio found that a plan administrator had engaged in an arbitrary and capricious decision-making process when it denied a Honda account representative’s short-term disability claim.
Courts across the country grapple with the challenge of reviewing denied or terminated long-term disability claims based on fibromyalgia. On September 21, 2018, a federal judge in Massachusetts found that Unum and a supplemental insurer had wrongly terminated Judith Kamerer’s LTD benefits after almost a decade of payments. Kamerer suffers chiefly from fibromyalgia and depression.
It is not unusual for an insurance company to deny a claim for long-term disability insurance benefits on flimsy grounds. It may continue to deny the claim on review even if the claimant has submitted clear and persuasive evidence of disability. When this happens, it comes as no surprise that the claimant, who may be suffering from a significant physical or mental impairment that is preventing her from working, will also experience serious anxiety and stress because of the LTD insurer’s egregious denial.
We have written in this space before about long-term disability insurance companies’ use of a variety of surveillance methods, including social-media monitoring, in the quest for evidence they can use to deny or terminate claims. The more serious and permanent the disability or the higher the salary of the claimant, the more expensive it will be for the company to pay out claims over time. Unfortunately, despite the contractual obligation to pay valid claims, LTD insurers are not often motivated to step up and pay claims without first making efforts to discredit claimants’ disabling impairments — and surveillance is a major part of those efforts.
On September 19, Judge William Orrick of the U.S. District Court in the Northern District of California reversed a disability insurer’s denial of long-term disability insurance benefits. The court interpreted a provision of the insurance policy that said a claimant is not disabled for benefits purposes if he or she could perform his or her job with “reasonable continuity.”