The Unthinkable Happens

You’ve worked hard in your career for years.  With every paycheck you have received, it is likely that your employer has deducted partial premiums for private long term disability (“LTD”) insurance.  These insurance policies are issued and administered by huge private insurance companies.  These policies are supposed to provide you with monetary benefits (usually 60%-80% of your normal earnings, depending on the policy), in the event you become disabled due to injury or illness.  Like most people, you probably don’t think twice about what that payroll deduction is going towards until the unthinkable happens and you find yourself disabled and unable to work.

Most expect that their LTD insurance policy will be there as a safety net, insuring that you and your family will be able pay the bills in your time of need.  Unfortunately, the majority of claimants who find themselves disabled and out of work, will face denials of benefits from the companies that administer these LTD policies.   The law that governs most of these policies is known as “ERISA,” which is an acronym for The Employee Retirement Income Security Act of 1974, 29 U.S.C. §1132.  This federal legislation has caused more stress for disabled workers and allowed more insurance companies to act with impunity by denying valid claims than any piece of legislation in American history.  However, the more you know about ERISA and how these claims are handled by our federal courts, the better your chances are of “leveling the playing field” and getting the financial benefits you deserve.

Long Term Disability Claims in Federal Court

If your disability insurance claim has been denied, it has been reviewed by a “plan administrator,“ an employee of the insurance company who is given virtually boundless discretion in determining whether to deny your LTD claim.  Before you can pursue your case in federal court, you must first “exhaust your administrative remedies.”  This means you must completely re-submit your claim to the internal appeals procedure put in place by the insurance company.  There are often many levels of appeals, usually with the same result:  claim denied.  Once you have exhausted your administrative remedies, you finally have a right to file a lawsuit.

Once your case is field in federal court, things get even stranger.  Why? Because the LTD case is not tried in the traditional sense.  Often, there usually are no testifying witnesses, no cross examinations, and no closing arguments by lawyers.  To the contrary, most LTD cases are simply decided by a federal judge who examines the “administrative record.”  The administrative record is the insurance claim file, as compiled and maintained by the insurance company.  Think of it as a “basket” in which all the relevant documentation to your claim is dropped, including:  questionnaires completed by you, your medical records, and statements of treating physicians  as well as those of the “hired gun” physicians employed by the insurance company.   The administrative record is usually the only evidence reviewed by the federal judge in a LTD case.

Moreover, after reviewing the administrative record, a federal judge can only reverse an insurance company’s LTD denial if it finds the insurance company’s determination was “arbitrary and capricious.”  This means there was virtually no evidence – at all – to support the insurance company’s denial.

Is There Hope?

Sounds like a pretty unfair process doesn’t it?  The passage of ERISA certainly was a coup for the insurance industry.  It allowed them to deny thousands of claims, and effectively keep disabled claimants from obtaining the justice they deserve.   Nonetheless, LTD cases brought under ERISA can still be won if you take certain steps to level the playing field.

Building Your Case by Supplementing the Administrative Record

Under ERISA law, once you have exhausted all of your internal appeals and receive a final denial of your claim from the insurance company, you are not allowed to supplement  the administrative record with any further evidence.  The file is forever closed.  Remember how I previously said to think of the administrative record as a “basket” in which certain documentation is placed, related to your claim?   Therefore, it is extremely important to fill that “basket” with as much favorable evidence as possible, which supports your claim that you are indeed suffering from a long term disability.  So, how do we do that?

First and foremost, it is absolutely crucial that you get an ERISA attorney involved in your claim as soon as you are denied by the insurance carrier, who can start taking steps to make the administrative record more favorable to you.    We can do that numerous ways, including supplementing the file with client testimonials, daily activity affidavits, photos and video.  (This is about as close as a LTD claimant will come to “testifying” in ERISA cases).  I often also use the assistance of Vocational Experts – persons qualified to testify in court as to a claimant’s  loss of access to jobs in the national economy.  Vocational Experts often author detailed reports regarding our client’s disabilities which a judge will read and consider when making the final judicial determination in a LTD case.  Furthermore, some cases warrant the use of independent physicians who will examine our clients and provide a disability assessment report and offer opinions as to whether an individual has the functional ability to be employed.    A well supplemented administrative claim file is the first step to winning a LTD case.

Tips and Tricks You Can Use to Maximize Your Chance of Success

The client can also take steps to increase their chances of winning a LTD case. Make sure to gather all your medical records and review them for accuracy.  I have had more than one case where the insurance carrier told my client that their treating physician said “X,” when in reality, the doctor said “Y.”  Reading and reviewing your own records helps keeps the insurance company honest.  Next, keep a very accurate list of the names and addresses of all health care providers you have seen for your illness and injury.  This makes gathering medical records much easier for your attorney.  In addition, make sure that you carefully read those lengthy letters that you receive from the insurance carrier during the claims process.  These often contain deadlines pertaining to appeals periods, and when the administrative record will close.  Further, if you send anything to the insurance company, send it certified mail, and make a copy of all documentation sent.    Moreover, be VERY careful what you say to the adjuster handling your LTD claim.  They will turn the most innocuous statement into a claim-denying event.   Also, if the insurance company sends you questionnaires, fill them out as completely as possible.   If the insurance form doesn’t provide you with enough room to relate the circumstances of your condition, attach additional pages.  Finally, be aware that insurance carriers often hire investigators to spy on and video you, usually shortly prior to physician exams or independent medical evaluations that are set up by the insurance carrier.

Final Thoughts

ERISA governed LTD cases are won (and lost) by what is in that little basket of evidence called the administrative record. Consulting with an attorney as soon as possible after you receive a letter from the insurance company denying your LTD claim increases your chance of obtaining a favorable outcome.   ERISA attorneys can use many resources to supplement the administrative record with information that can force the insurance carrier to pay the long term disability benefits that you deserve.    If your disability insurance claim is denied, call an experienced ERISA attorney immediately, who can start fighting for your rights.

Copyright 2009, 2020 by Brent H. Jordan, Attorney at Law