Most employee benefit claims involving long-term disability are insured by disability insurance companies. As a result of industry consolidation, there are now only a handful of long-term disability insurers that underwrite group long-term disability insurance. While each company handles claims somewhat differently, and while insurance policies from different companies may differ somewhat in their wording, they all base their claim decisions on whether the insured has suffered a loss of income on account of a sickness or injury. Our goal in this article is to deepen understanding of insurance companies and provide guidance for challenging benefits claim denials.
The Landscape of Disability Insurance Companies
Some of the more familiar names in the field of long-term disability insurance are:
- Unum Life Insurance Company of America
- Provident Life and Accident Insurance Company
- Paul Revere Life Insurance Company
- New York Life (Life Insurance Company of North America)
- Hartford Life and Accident Insurance Company
- Prudential Life Insurance Company of America
- Metropolitan Life Insurance Company
- United of Omaha Life Insurance Company
- Guardian Life Insurance Company, Standard Insurance Company
- Lincoln National Life Insurance Company
- Principal Life Insurance Company
- Reliance Standard Life Insurance Company
The policies issued by each of those companies may seem comparable, but subtle differences in policy wording can result in dramatically different claim outcomes. Where the insured is employed also matters a great deal. Group long-term disability insurance policies issued to private-sector employers are almost always governed by the Employee Retirement Income Security Act (ERISA).
The Implications of ERISA on Claims
When ERISA applies, established insurance law principles are often negated, including claimants’ right to sue for bad faith damages if the benefit is denied unreasonably. Likewise, many policies contain language reserving “discretion” to the insurance company to interpret the policy terms and to decide claims. Such language may result in an insurance company winning in court if a claim is denied even if the court disagrees with the determination. So long as the insurance claim denial is not found arbitrary and capricious or an abuse of discretion, the court will uphold the insurer’s finding.
Depending on whether ERISA applies, a claimant’s rights and the remedies that may be pursued in the event of an insurance claim denial may vary significantly in disability insurance litigation. The subtleties of the insurance policy terms may also affect whether the claimant receives benefits; and if so, for how long.
The Variables of Disability Insurance
Disability insurance has been deemed a “unique risk” by insurers because it differs substantial from other types of insurance – most insurance involves a specific event that triggers coverage. In disability insurance claims, though, there are several variables that determine whether claims are paid.
First, the insured must meet eligibility standards that are spelled out in the policy such as working at least 30 (sometimes 40) hours a week.
Second, while the Affordable Care Act has precluded disqualification due to pre-existing conditions, a claimant who suffers a disability within the first year or two of the effective date of coverage that is due to a condition that was treated, diagnosed, or even strongly suspected immediately prior to when coverage began is generally ineligible to receive benefits.
Third, the insured needs to medically qualify to receive benefits. In other words, the claimant must have a medical condition that causes clinically identifiable physical or mental restrictions or limitations that impair the claimant’s ability to work.
Finally, the disability insurance company also makes a vocational determination. With rare exceptions, a diagnosis alone is not a disability. The effect of that diagnosis has to be correlated with the claimant’s ability to perform their regular job or perform other jobs. In some instances, there needs to also be an earnings analysis as well to determine whether the insured is capable of earning a salary comparable to past earnings.
The Role of Insurance Companies
Insurance companies administer disability insurance claims. Their staff collects information from the claimant, the claimant’s lawyer, and from treating doctors. The evidence is initially reviewed by claim adjudicators and nurses; and insurers may also have doctors on staff or who are accessible through vendors to help understand and evaluate the evidence. The insurance company may also have vocational consultants to help them understand the vocational issues that arise in disability claims such as whether a claimant who may be unable to perform the duties of their regular occupation may nonetheless possess skills that are transferable to another occupation.
Despite commonly held beliefs about insurers striving to deny meritorious claims, insurance companies are obligated to exercise good faith and fair dealing when they assess claims; and claims subject to ERISA must be adjudicated under fiduciary standards which the U.S. Supreme Court has held mandates the application of “higher-than-marketplace quality standards.” Although insurance companies can perform covert surveillance of claimants, it is not as common as popularly believed, although insurers often check claimants’ social media postings. Insurance companies also have the right to have claimants examined by a doctor of their choosing; however, that right is also exercised somewhat infrequently.
Common Challenges Claimants Face in Long Term Disability Claims
Because of the complexities of long term disability insurance, some claimants face difficulties in having their disability insurance claims approved. In some instances, claims are denied due to inadequate documentation or lack of critical laboratory or imaging results. Long term disability insurers also sometimes issue claim denials that mistakenly maintain that a claim for disability benefits is based on a pre-existing condition exclusion. In other cases, insurers may approve a claim but wrongfully assert that the claim is based on a condition that has a limited pay period such as a behavioral health disorder or what are sometimes referred to as “self-reported” illnesses such as migraine headaches, fibromyalgia, or conditions that cause chronic fatigue. If ERISA applies, claimants may face an especially difficult challenge in establishing the denial is arbitrary and capricious.
Overcoming Unwarranted Disability Insurance and ERISA Claim Denials
All long term disability insurance claimants would benefit from receiving advice from a knowledgeable and experienced attorney even before they make a claim. A small investment in legal fees early in the process can often head off a marge larger expense if a preventable denial can be avoided. DeBofsky Law has been handling long term disability insurance and ERISA-governed disability benefits claims, appeals, and litigation since the 1980’s and have vast experience and proven expertise in offering valuable legal counsel and skilled representation in claim appeals and litigation.
DeBofsky Law: Your Advocate in Insurance Benefits Claim Challenges
We have a motto at DeBofsky Law – “We don’t just follow the law, we make the law.” The reason we say that is because we have won numerous cases that are repeatedly cited by courts as groundbreaking legal precedent on a variety of issues. Here are a few more recent examples:
- Scanlon v. Life Insurance Company of North America – S. Court of Appeals for the Seventh Circuit, August 31, 2023. Scanlon overruled a district court’s finding in favor of a disability insurance company based on test results and other medical evidence that clearly established the plaintiff’s inability to meet the demands of his occupation.
- Lacko v. United of Omaha Life Ins. Co., 926 F.3d 432 (7th 2019). DeBofsky Law successfully argued in Lacko that the trial court erred in upholding a benefit denial because it failed to consider the actual duties of the insured’s occupation.
- Kennedy v. Lilly Extended Disability Plan, 856 F.3d 1136 (7th 2017). DeBofsky Law convinced the U.S. Court of Appeals to upheld a ruling that a claimant suffering from fibromyalgia was entitled to ERISA disability benefits.
- Fontaine v. Metropolitan Life Ins. Co., 800 F.3d 883 (7th Cir. 2015). In Fontaine, the court of appeals ruled that policies issued or delivered in the State of Illinois cannot contain language that would trigger an arbitrary and capricious standard of judicial review.
- Raybourne v. CIGNA Life Ins. Co. of N.Y., 700 F.3d 1076 (7th Cir. 2012). Raybourne ruled that a disability insurer had improperly terminated a claimant’s disability benefits. We convinced the court that the insurance company failed to consider a Social Security disability benefit determination and that the insurance company was motivated by a financial conflict of interest. The court also upheld an award of attorneys’ fees to Raybourne’s counsel.
- Stephan v. Unum Life Ins. Co. of America, 697 F.3d 917 (9th Cir. 2012). In Stephan, DeBofsky Law was successful in overturning a lower court decision by convincing the court that the long-term disability insurance company acted arbitrarily and capriciously by failing to properly evaluate the insured’s “earnings” that he was receiving at time the disability began. The court also determined that communications between a claim adjuster and an in-house attorney did not fall within attorney-client privilege and had to be disclosed.
- Holmstrom v. Metropolitan Life Ins. Co., 615 F.3d 758 (7th Cir. 2010). In Holmstrom, DeBofsky Law successfully argued that the judge in the lower court mistakenly found that a long term disability benefit denial was not arbitrary and capricious. The court of appeals found the denial was arbitrary and capricious and that the insurance company failed to recognizing the significance of a claimant’s pain in its disability assessment and also criticized the insurance company for presenting claimant with a “moving target” as to what evidence to submit.
These cases are just a few examples of situations where DeBofsky Law, Ltd. has taken on major insurance companies and corporations – and won!
Our Approach – Empowering Our Clients to Challenge Well-Funded Major Insurance Companies and Come Out Ahead
Insurance companies are well-funded, and many claimants are intimidated and afraid that they lack the resources to challenge an unfair insurance claim denial. That’s where we come in. Our decades-long experience in taking on the insurance companies and winning evens the playing field. The examples given above illustrate our litigation successes, but we have also won uncountable claim appeals where we have successfully challenged benefit denials and thus headed off litigation.
Our Proven Track Record in ERISA and Disability Claim Appeals
ERISA disability claim appeals are complex. They are governed by detailed regulations issued by the U.S. Department of Labor designed to make the process fairer for claimants, but insurance companies often engage in gamesmanship to shore up their denials. The principal tool that disability insurance companies use is the so-called “peer” reviewer – a doctor or panel of doctors hired to review the medical evidence and offer their opinions. Although every disability insurance policy gives long-term disability insurers the right to have the claimant undergo an independent medical examination, in practice, such examinations have become increasingly rare. And when examinations do take place, they are often performed by doctors who are frequently retained by insurance companies.
Claimants need guidance on how to handle claim appeals, which are legal proceedings, just like court cases. Most courts require claimants to go through the appeal process before they are allowed to go to court; and a failure to handle the appeal properly can make it impossible to win in court later if the appeal is unsuccessful. That is why it is so important for benefit claimants to obtain representation by an attorney who is both experienced in handling claim appeals and has a proven track record of success.
Disability claim appeals involve a lot of time and effort. They require a detailed analysis of the insurance company’s claim file; and then, in consultation with our clients, we compile additional evidence we believe will convince the insurance company to overturn its denial. But that’s only part one – we then need to put together the appeal, which involves a recitation of all of the evidence and explains why the insurance company’s decision is wrong. We structure the arguments we present based on well-regarded legal precedents that have addressed the same issues in an effort to present a bulletproof appeal.
The process is also time-consuming. Claimants have 180 days following receipt of a denial to submit an appeal; however, while that may seem to be a lengthy period of time, it goes quickly when evidence needs to be gathered from multiple sources. Then, after the appeal is submitted, a determination is supposed to be issued within 45 days, but a 45 day extension is permitted. During that time, disability insurers are required to share any medical reports they receive that may be unfavorable to the claimant; and we often then have to submit rebuttals before a final determination is issued.
Our experience and expertise in handling claim appeals has made the difference for our clients time and again. And even when appeals we have submitted are not successful, we know we have laid the groundwork to significantly enhance the chances of success in litigation.
Client Testimonials for Disability Claim Appeals
Here’s what some of our clients have had to say about our work on their appeals:
“Thankful for all of your help in this appeal process..and hopeful that other long covid clients have the same result.”
“Impressed and encouraged by an excellent appeal by Mark DeBofsky – succinctly, effectively and efficiently presented, researched and argued.”
“I worked with Martina Sherman who worked tirelessly for several months to bring my case to a satisfactory, fair resolution without going to court. It was the best outcome possible. I have such respect for Martina, her dedication, knowledge, and professionalism were remarkable. I can’t thank her enough.
“I am absolutely thrilled that my appeal won!! And I have all of you to thank for that.”
“The three of us closest to this, me, my wife and my business partner all uttered the same word after reading the appeal, and I am not making this up – Wow!”
“I was amazingly fortunate to have found Attorney Marie Casciari and her team at DeBofsky Law”
Our Legal Expertise: Guiding You Through Every Stage of Disability Insurance and ERISA Claims
We don’t just handle appeals, though. We also counsel clients and help them shepherd their claims through the initial claim process. Our firm has also gained a nationwide reputation for the litigation results we have achieved in courts across the country. Court cases are difficult; and we often have to deal with a court review standard that is extremely favorable to insurance companies. Under such a standard, the insurance company wins so long as it can convince a court that its determination was “reasonable,” even if the court thinks the decision was wrong. In many of the cases listed above, we have successfully overcome that judicial review standard to secure victory for our clients.
No one should feel that they have to give up in the face of a claim denial. Hiring a lawyer to vindicate their rights is essential. Our dedicated attorneys who believe in you and your case will make a difference.
Why the Right Legal Expertise Matters in ERISA and Disability Claims
Disability insurance is a critical benefit that workers need for their economic security in the event their careers are disrupted due to a serious illness or injury that keeps them from working. Because the benefit is so important, claimants need to place just as much importance on hiring an attorney who is familiar with insurance company practices and who can assist them in navigating the ERISA disability benefit claim, appeal, and litigation process. The successful resolution of an insurance dispute often depends on having the right lawyer who has the experience and expertise needed to successfully resolve a claim in the client’s favor.
DeBofsky Law with offices in Seattle and in Chicago, is committed to providing all of its clients with top-tier representation in all aspects of the disability claim process – from applying for benefits, through appeals of claim denial, and, if needed, through the courts and even appellate courts. If you are in need of our services, please contact us today for a consultation.