Employees receiving long-term disability benefits in Chicago under ERISA-governed benefit plans frequently contact lawyers for two reasons: their claim was denied, or the insurer paid the claim, but not in the correct amount. The first situation is understandably much easier to identify than the latter, given you are receiving benefits and the only way to verify if it is the correct amount is to check the group insurance policy’s terms, including the definition of covered earnings, whether or not it includes commissions or bonuses, the disability benefit percentage, and whether or not the benefit includes items like cost of living adjustments or retirement plan contributions. Further, the insurer may offset certain income you receive that may not call for offset under the policy, like personal injury settlements or workers’ compensation. You may have enrolled in an optional buy-up benefit, and many group disability policies have different classes of employees that pay different benefit percentages or have different maximum benefits.
It is virtually impossible to check the insurer’s calculation without the insurance policy in hand, and knowing the components of your compensation from your former employer. Not surprisingly, so many individuals trust the insurer’s calculation, and wait to question it years after they began receiving benefits. Claimants also get increasing interest in the subject as the amount of past due underpayment grows to a sizeable sum. But by that time, it may be too late to successfully challenge the calculation due to a time limit in which to appeal (180 days).
A good example of how waiting to question the insurer’s calculation can have devastating outcomes occurred recently in Haase v. Metropolitan Life Insurance Co., No. CV 15-2864, 2016 U.S. Dist. LEXIS 100113 (E.D. Pa. Aug. 1, 2016). The plaintiff there sued under ERISA § 502(a)(1)(B) to challenge the offset of his workers’ compensation benefits and calculation of benefit dating back to 2005. But Haase’s case was time-barred. His cause of action accrued the first time MetLife underpaid his claim, and the policy required lawsuits be brought within three years. Due to the delay past the time limit to file lawsuit, the court never even got to determine whether MetLife owed Haase money for the past ten years, and he had no ability to reset the monthly payment going forward.
If you suspect the long-term disability insurer is not paying the proper amount of benefits under your policy, don’t wait. Call a reputable ERISA long-term disability lawyer today.