Employees in Chicago making claims for long-term disability insurance often ask how an insurer could deny a claim when their doctor stated they are disabled. While your doctor’s input is usually necessary, it is not usually enough. Below gives a few reasons to help explain why.
Most Group Long-Term Disability Insurance Policies Are Governed by ERISA § 502(a)
Unless exempt from ERISA, the federal statute governs most group long-term disability insurance policies. ERISA has a complex claims procedure regulation, 29 C.F.R. § 503-1, that sets procedural timelines and requirements for an insurer reviewing your claim before you can sue. On the other hand, it also creates a process for the insurer to introduce contradictor evidence.
ERISA’s Remedies Are Generally Limited to the Benefits, and Potentially Attorney’s Fees
ERISA’s remedies if you must sue are generally limited to the benefits and attorney’s fees expended in litigation. See ERISA § 502(g). As a result, insurers have incentive to build a colorable defense prior to litigation that they do not have in states with strong bad faith insurance denial laws. This increases the importance of building as strong of a case when making your claim or challenging a denial, and treating it like you are preparing for trial.
You Generally Cannot Strengthen Your Case in Litigation
If the insurer issues a final denial, you can file a lawsuit. Here’s a good background on exhausting administrative remedies before filing a lawsuit. But then a court generally reviews the record of the claim denial. This functions like an appellate proceeding, resulting in the pre-litigation stage acting more like a trial. Therefore, wen making your claim, or challenging a denial, it is imperative to put forward all the evidence you would want to make your case at trial. This should include at a minimum all available medical treatment records, any objective testing of your limitations, input from your doctors who treated you for good lengths of time, any vocational opinions tying your limitations to occupational requirements, and even something to mimic giving testimony at trial. We particularly like to use videotaped interviews to functional like a direct examination at trial, instead of written declarations used by other firms.
When claimants do not follow these steps, they can run into turbulence. In Calkin v. U.S. Life Insurance Co., No. 4:20-cv-00035, 2021 WL 1700771 (S.D. Tex. Apr. 29, 2021), Calkin received a Social Security Disability award, and his doctor gave a statement that he was disabled, but it was not enough. The insurer obtained multiple medical reviews of Calkin’s records and concluded he could work in a sedentary capacity. When Calkin sued under ERISA § 502(a), he unfortunately lost.
If your long-term disability claim was denied, call a skilled long-term disability insurance attorney to help you challenge the denial and prepare your request for review like a trial, giving you the best chance of getting your claim paid.
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