LONG TERM DISABILITY BENEFITS DENIED?
We can help you get your benefits.
You are disabled and can’t work. You thought your disability insurance would be your safety net and replace your income since you can no longer work.
- Your insurance premiums were paid, each and every month.
- You want to work, but can no longer do so.
- Your doctors say you are disabled.
- You filed your application for benefits on time.
- Your family desperately needs the valuable income the insurance benefits would provide.
Yet here you are, because an insurance company has denied your benefits. They will cash your (or your employer’s) premiums check each and every single month. They smile and tell you not to worry, you are in good hands, and your family will be taken care of.
But when the unthinkable happens, and you end up disabled no longer able to work, they deny your claim.
That’s when they reveal their true colors. When you need the benefits the most, you are left holding a heartbreaking denial letter, unsure of what to do next. Having your benefits denied or terminated is financially and emotionally devastating.
ERISA & Long Term Disability Insurance Laws in California
If your employer provided you with the long term disability insurance policy, then it is most likely governed by ERISA (Employee Retirement Income Security Act of 1974). This is a set of federal laws that govern almost every aspect of employee benefits, including long term disability benefits. ERISA governs the majority of long term disability policies out there.
These and other laws stack the deck against you, in favor of the insurance companies. However, if you purchased your policy directly from an insurance broker, and are not an employer, ERISA might not apply and you will have more favorable laws on your side.
ERISA doesn’t apply to all LTD plans, however. If you purchased your plan individually, or work for a church or public agency, your plan may be exempt from ERISA. Even church owned schools and universities. If so, California law applies. California law is generally more favorable for plaintiffs when their benefits are denied or terminated.
Are You Disabled? Own Occupation vs. Any Occupation
The standard used to determine if you are disabled is contained in your LTD policy. Your LTD insurance company is bound by this standard. There are essentially two standards, and a lot of policies combine the two standards.
The two standards are “own occupation” vs “any occupation.” If your policy applies the own occupation standard, you will be considered totally disabled if you cannot perform the material and substantial duties of your current occupation. This standard is easier for you to satisfy.
If your policy contains the “any occupation” standard, then you will only be considered disabled when you cannot engage in any gainful occupation you are reasonably suited for, based on your education, experience, and other factors.
The majority of policies now contain a hybrid definition of disability. After your long term disability kicks in (usually after 6 months, after your short term disability policy ends) the initial period is covered by the “own occupation” standard. After a short period of time, usually 24 months from the start of your disability, the “any occupation” standard kicks in.
Own Occupation Standard in LTD Cases
Own occupation sounds simple enough, but we are dealing with insurance companies here. They turn simple things into complex issues. They may try to argue that you are only disabled if you cannot perform the duties required of your occupation as it is performed in a typical work setting. You would want to argue that they should limit their review to the duties that you actually performed, not what other people may do at their job and their workplace.
Any Occupation Standard in LTD Cases
This standard is tougher for you to meet. It begins with an analysis of your employability. We look at your education, your work experience, salary history, wage analysis in your geographic area, and many other factors. The higher your level of occupation, the harder it will be for you to find a comparable position.
Keep in mind, courts generally hold that if you are capable of part time work, then you are not unable to engage in “any occupation” and you are not totally disabled, depending on the language of policy.
Some policies will include the language, “any gainful occupation” or “regular occupation.”
When the insurance company starts proposing occupations for you, they must consider your pre-disability occuation with respects to the nature, remuneration and status. If you are an engineer at a large tech firm, the insurance company can’t suggest you should take a job at a dry cleaner.
Many policies will actually specify the amount you must be paid. Generally, if you cannot perform the duties of an occupation that pays you at least 60% of your previous salary you will be considered totally disabled. But check your policy language. Some policies are even more favorable, paying you if you cannot earn at least 80% of your previous salary.
Terminated LTD Benefits When Standard Changes
As I mentioned earlier, the majority of long term disability policies change from “own occupation” to “any occupation” after a short period of time. Since any occupation is a harder standard to meet, the insurance companies take this opportunity to terminate your benefits.
They may conduct an investigation, send you a questionnaire, even contact your physicians. Essentially, they are looking for a reason to terminate your benefits, and if they find anything they can use, they will. Many disabled workers have their benefits terminated at this point.
How ERISA Affects Your Long Term Disability Claim
ERISA is an extensive, complex statute that essentially determines how your LTD claim is processed. The following list isn’t exhaustive, but these are the major effects:
- After you file a claim for benefits, a decision must be made within 45 days after the plan receives your application. If the plan needs more time, they must send you a letter explaining why they need more time. This extension lasts 30 days.
- If the plan requires more information from you, they must give you at least 45 days to provide this information. The plan must then issue its decision 30 days after you provide this additional information.
The plan can request a second extension of 30 days.
- If your benefits are denied or terminated, ERISA requires your plan to provide you copies of documents, records, and any other information relevant to the claim for benefits
- If the LTD plan denies your claim, the administrator must send you a notice in writing or electronically, with a very detailed explanation of why the claim was denied.
- They also need to describe the appeal process. The plan must include the rules, guidelines or exclusions used in their decision to deny your appeal, and provide you with instructions on how you can request these documents from the plan.
- The plan also must identify, at your request, any medical or vocational expert whose advice was obtained by the plan.
Timely LTD Appeals
- You have a right to appeal the decision. This appeal must be completed within a certain amount of time. If you do not file an appeal on time, you may lose all of your rights to pursue your benefits. You have at least 180 days, but the plan can allow more than 180 days for an appeal.
- The appeal must be reviewed by someone new. The reviewer cannot be the same person who reviewed the claim, or their subordinate.
- After you appeal, your disability plan must make a determination within 45 days, unless special circumstances exist and an extension is needed, then they have another 45 days. They must inform you of this extension in writing.
- Some plans require two appeals, and ERISA allows them to require it. But no more than two appeals can be required.
- If the plan doesn’t change its mind on appeal, you can file a lawsuit in federal court.
- The federal court’s review of your long term disability insurance lawsuit will be limited to the evidence available to the disability plan at the time their final determination was made. Essentially, the evidence you want the court to review must be submitted at the application and appeal stages. You cannot introduce evidence at trial. That’s why it’s imperative to prepare the appeal as thoroughly as possible.
- There is an exception to the above rule. Limited discovery is allowed when a conflict of interest applies, but only to the issue of the conflict.
- Go here for an extensive discussion on ERISA LTD appeals.
Filing A Lawsuit After Your ERISA LTD Appeal Is Denied
If your administrative appeal is denied, you can now file a lawsuit in Federal court. You now must file a civil lawsuit to enforce your rights under your policy. San Diego, the birthplace of California, is in the United States District Court, Southern District of California. That is where you would file your lawsuit. This district also covers Imperial county.
But this not your ordinary lawsuit. We’ve all seen lawsuits and trials on TV, with a courtroom, a judge, bailiff, jurors, witnesses and all the other pieces that make for great TV.
ERISA lawsuits and trials for long term disability denials are completely different. There are advantages and disadvantages in the way these lawsuits are handled.
Who do you sue?
The answer depends on the type of plan, who funds the plan, and who is responsible for making the claim determination. Usually, the company you are suing will be the disability insurance company, since they are the ones responsible for determining the claim and paying benefits.
But there are some plans which are self-funded. In other words, the employer themselves funds the plan with their own money, and then hires out the claims administration to a third party. In that situation, it’s safer to go ahead and sue the employer and the third party claims administrator. Both will claim they are not the right party to sue, and you can dismiss one later, after you determine which party was the right one to sue.
New Evidence Is Generally Not Allowed
Unlike regular civil cases, new evidence is generally not allowed in ERISA LTD lawsuits. This is why the appeal process is so important. The only evidence allowed is the paper file established during the claims process, and following appeal.
So basically, the only evidence the court will consider, is all the documents contained in the insurance company’s claim file when they denied your appeal. There will be no witnesses. No testifying. No discovery process like in normal civil lawsuits where each party “discovers” what the other side has.
There are exceptions to this rule, but in general, your appeal is the last chance to introduce evidence you want the court to consider. That’s why it’s important to make sure the appeal is handled correctly so you have the best chance to prevail at the court level.
There Is No Jury Trial In ERISA LTD Lawsuits
Unlike regular civil cases, you do not have a right to a jury trial. The judge assigned to your case will decide it. And there isn’t even normally a trial. There are no witnesses, no testifying, no experts. Many cases are decided by cross motions for summary judgment. Where both sides claim the case should be decided right then and there for them.
ERISA Long Term Disability Lawyer
If your benefits were denied or terminated, you need to fight the long term disability insurance company with everything you have. If you received a letter from your insurance company denying or terminating your benefits, we will review your letter for free. Give us a call or fill out the form on this page.