When you make a claim for long-term disability insurance, or even life insurance, under an employer-sponsored ERISA plan, you may not immediately think to consult an attorney. But one of the first things the insurer asks is when you obtained coverage under the policy. The reason is it wants to know whether your claim would be excluded as a pre-existing condition. Most policies provide that if you received some form of treatment for a condition, were prescribed medication for it, or were evaluated for it within three months before obtaining coverage, any resulting disability will be a pre-existing condition. Most policies also state that once you have had coverage for over one year, the insurer will no longer exclude disabilities caused by a pre-existing condition. The rationale is that once you have worked with coverage for over a year, there is less concern over adverse selection. Adverse selection is a state of information asymmetry between you and the insurer making you more likely to have a covered risk. This seems simple enough, but defining the contours of when you have been evaluated, received treatment, or taken medication for a condition can easily result in disputes with the long-term disability insurer. A recent case shows how contentious the claim can be.
In Langdon v. Principal Life Insurance Co., No. 14-cv-6980, 2016 U.S. Dist. LEXIS 122683 (N.D. Ill. Sept. 9, 2016), the policy defined pre-existing condition as one for which the insured received treatment, consultation, care or services; or was prescribed or took medication in the three months before becoming insured. Plaintiff had been regularly going to his dentist due to dental work breaking down, forming abscesses, root canals, pain, enlarged sinuses, and inflammation. The month before Langdon obtained long-term disability coverage, the dentist observed an enlarged lymph node, and the dentist referred him to a surgeon. The surgeon documented being concerned there may be a parotid mass, and that it could be a significant diagnosis. Right after Plaintiff became covered under the disability insurance policy, his doctors performed a biopsy of the mass and diagnosed the sample as squamous cell carcinoma, an advanced throat cancer. Langdon had to go out on disability leave, but the insurer denied the claim, asserting Langdon was evaluated for the condition in his numerous trips to the dentist.
Langdon sued to recover benefits under ERISA § 502(a). The Court held Principal wrongly denied the claim as a pre-existing condition. While Langdon had been evaluated for a mass in his lymph node, and had seen a dentist numerous times regarding pain in his teeth and other conditions, there was no reason to suspect, let alone treat, cancer until the doctors performed the biopsy. The court explained the relevant question is not whether the claimant had the condition before coverage became effective, but whether the claimant received treatment for the condition. Because Langdon had other conditions for which to seek treatment, the earlier treatment was not for the cancer. It was for pain in his mount, inflammation, etc.
Drawing the line between treatment for a condition diagnosed soon after you obtain coverage, and treatment for other conditions before coverage can be a fine line. If you have a claim for long-term disability or life insurance within twelve months of obtaining coverage, it would be wise to talk to a knowledgeable ERISA long-term disability lawyer before making the claim.