We often write about denied or terminated disability insurance claims that claimants appeal to court under the federal law ERISA. ERISA usually applies when short- or long-term disability insurance policies are available to claimants through their employers.
In Part 1 of this post, we told readers about a recent Third Circuit Court of Appeals case called McCann v. Unum Provident in which a doctor appealed his long-term disability insurer’s termination of his benefits. In that post, we explained how the Third Circuit Court of Appeals determined that the federal law called ERISA applied to the dispute.
A preliminary issue in every federal court appeal in a denied or terminated claim for benefits under a short- or long-term disability insurance policy is whether ERISA governs. ERISA is the Employee Retirement Income Security Act, the federal law governing most benefit plans available through employers.
Disability insurers all too often engage in a behavior known in the industry and among claimants’ advocates as cherry-picking. Cherry-picking refers to a practice of insurance administrators or consulting doctors who selectively assign undue weight to particular records and ignore others when they analyze medical records to determine whether claimants are disabled and eligible for benefits.
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.
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.
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.”
On August 17, the U.S. District Court in the Northern District of Oklahoma issued an opinion reversing a long-term disability insurer’s denial of benefits, ordering that the insurer pay the claimant 24 months of benefits based largely on mental-health impairments. In Redden v. Aetna Life Insurance Company, the judge explained the inherent conflict of interest that a LTD insurer has when it has both the role of discretionary decision maker on the question of claimant eligibility and is in the position of financial responsibility when it finds for the claimant.
At our law firm, we represent disabled clients in their applications for long-term disability benefits. It is not unusual for LTD insurers to make mistakes in their decision-making processes, causing a wrongful denial of benefits. Often when an experienced lawyer carefully reviews the administrative record of medical and vocational evidence the insurance company or its administrator relied on to deny or terminate benefits, the attorney discovers errors.