Employees in Chicago and around Illinois often have long-term disability insurance offered through their employers, but often misunderstand the burden of proof in obtaining those benefits. It largely depends on whether the insurer, or claims administrator, has discretionary authority to interpret the terms of the plan and make decisions on benefit claims. It essentially means a court reviewing your benefit denial would give a lot of deference to the insurer. Naturally, insurers always want such a term in the plan.
No matter whether the insurance policy provides the insurer with discretionary authority, it is always your burden to establish you meet the terms of the policy to be eligible for disability benefits. But people often mistakenly believe once they have started receiving benefits, they do not have to do anything to continue receiving them. Not so. The claims administrators have a continuing duty to administer the plan according to its terms and they make ongoing eligibility determinations. Occasionally, an insurer will come across evidence suggesting the insured is no longer disabled, or evidence suggesting the insured never was disabled. In these cases, it is not the insurer’s burden to prove you are no longer entitled to benefits. Rather, the evidence becomes part of the totality of evidence the insurer weighs, and it is always your burden to demonstrate you are disabled.
Such a case recently emerged from the Fifth Circuit Court of Appeals. In Truitt v. UNUM Life Insurance Co. of America, a plan participant had been receiving long term disability insurance benefits, when an acquaintance of hers approached her insurer, Unum, and presented to Unum hundreds of pages of emails suggesting the participant had been engaging in activity inconsistent with her being disabled. After suing for her benefits under ERISA section 502, the participant argued Unum failed to investigate the accuracy of the information submitted, but the Court of Appeals held Unum’s decision to terminate benefits was not unreasonable because the participant did not produce any contradictory evidence of her own.
When receiving disability benefits, you should exercise extreme caution in what sorts of activities you engage in, and whom you share information with. You never know when such information could be used against you, and even if it is not completely accurate, it could support an insurer’s decision to terminate your benefits. If you have questions regarding your long term disability insurance, contact a knowledgeable ERISA lawyer.