You applied for Long Term Disability [“LTD”] benefits through a group policy associated with your employment. Unfortunately, your application for LTD benefits was denied.
A federal law—known as the Employee Retirement Income Security Act [“ERISA”]—applies to disputes like this. Under ERISA, you must exhaust the internal appeals process of the LTD insurer before you can file a lawsuit in federal court to challenge the denial. The denial letter to you should have explained how to appeal and the deadline for doing so (typically 180 days).
Late in 2017, the United States Department of Labor issued final regulations that require new procedures in group LTD claims. These procedures first took effect during April 2018.
With respect to group LTD claims filed on or after April 1, 2018, the following procedures apply:
- Claims and appeals must be decided in a manner designed to insure independence and impartiality of the persons involved in making the benefit determination, such as claims adjudicators, or medical or vocational experts.
- Benefit denial notices must contain a complete discussion of why the plan denied the claim and the standards applied in reaching the decision, including the basis, if any, for disagreeing with the views of health care professionals, vocational professionals, or with disability benefit determinations by the Social Security Administration.
- Initial benefit denial notices must include a statement that the claimant is entitled to receive, upon request, the entire claim file and other relevant documents.
- Initial benefit denial notices must include any internal rules, guidelines, protocols, standards or other similar criteria of the plan that were used in denying a claim, or contain a statement that none were used.
- Claimants must be given notice and a fair opportunity to respond before a denial at the appeals stage that is based on new or additional evidence or rationales.
- The plan must not prohibit a claimant from seeking court review of a claim denial based on a failure to exhaust administrative remedies if the plan failed to comply with significant claims procedure requirements (“deemed exhaustion”).
- Rescissions of coverage, except for rescissions for non-payment of premiums, must be treated as adverse benefit determinations triggering the plan’s appeals procedures.
- Appeal determinations must include a description of any applicable contractual limitations period and its expiration date.
- Required notices and disclosures issued under the claims procedure must be written in a culturally and linguistically appropriate manner.
Effective Internal Appeals
In our experience, the most effective internal appeals include one or all of the following:
(1) statements from one or more of your treating doctors that address specifically the medical issues cited in the denial by the LTD carrier;
(2) statements that address whether the LTD insurer failed to comply with the 2018 regulations; and
(3) statements about the nature and scope of work you did in your last job (assuming that the LTD policy says that you get paid if you cannot perform the duties of your last job).
Thus, and because there is little “lawyering” during this part of the process, we generally discourage people from hiring us (or any lawyer) at this part of the process. In fact, we believe that folks who have to spend money at this part of the process should consult with a vocational expert regarding item (3) above.
Lawsuits When Internal Appeals are Denied
If the internal appeal is denied, your only recourse is to file a lawsuit in federal court. Unfortunately, the law is NOT favorable to individuals who do so. As a general rule, you will lose your lawsuit unless you can prove that the LTD carrier’s decision was arbitrary and capricious (aka irrational). This is VERY difficult to prove. In most civil lawsuits, the person suing wins if they prove their case by a preponderance of the evidence. This means simply that their proof is more convincing than the proof offered by the defendant.
Please contact us if you have questions.