Yearly Archives: 2019

5 02, 2019

An Example of Justice Being Decided by the Review Standard for ERISA Disability Benefits

By | 2019-10-09T18:32:28+00:00 February 5th, 2019|Uncategorized|Comments Off on An Example of Justice Being Decided by the Review Standard for ERISA Disability Benefits

A recent Colorado case—Ellis v. Liberty Life Assurance Co. of Boston—illustrates the importance of de novo review when a court evaluates an insurance company’s wrongful denial of disability benefits in an action governed by the Employee Retirement Income Security Act (“ERISA”).  Initially, the court upheld the benefit denial after conducting an abuse of discretion/arbitrary and capricious review—a review that gives deference to the insurance company’s conclusions.  But it reversed the denial on reconsideration, after conducting a de novo review—an independent determination of whether a preponderance of the evidence supported disability, giving no deference to the insurance company’s conclusions.

In early-2012, Ellis suffered a significant health issue resulting in a debilitating cognitive impairment.  Ellis could no longer work, however, through his employment he had obtained an ERISA-governed long‑term disability insurance policy issued by Liberty.  Liberty approved and began paying the $8,572 monthly LTD benefit.  Over time, Ellis underwent multiple neurocognitive evaluations and continued under the care of multiple physicians, each concluding that Ellis’s impairment precluded employment.  Twice over Liberty’s own consulting neuropsychologist reached the same conclusion.

Liberty then hired Dr. Gant to perform “independent” neuropsychological testing of Ellis.  The test results were ultimately deemed “invalid” and Dr. Gant concluded he was “not certain” whether Ellis was cognitively impaired.  Nevertheless, in December 2013, Liberty terminated Ellis’s LTD benefits based upon Dr. Gant’s conclusion.  Ellis appealed—submitting additional compelling evidence of his disability.  Liberty hired a second “independent” neuropsychologist, Dr. Belliveau, who merely reviewed the paper file and concluded it did not support a finding of cognitive impairment.  Liberty upheld the denial, forcing Ellis to file a lawsuit to obtain justice.

The judge initially entered judgment in favor of Liberty, upholding the termination of benefits.  He noted Liberty’s original denial was based upon Dr. Gant’s questionable conclusions and despite significant evidence supporting the claim.  He also noted that on appeal Liberty’s neuropsychologist’s findings were difficult to follow and unpersuasive.  Nevertheless, believing the policy pre-dated a Colorado law prohibiting an insurance policy from delegating discretionary authority to the insurer, the judge was compelled to honor the policy’s delegation clause and conduct an abuse of discretion review.  While he found the conclusions of Drs. Gant and Belliveau unpersuasive, they nevertheless constituted evidence in support of Liberty’s determination such that the denial was not arbitrary and capricious and had to be upheld.

On reconsideration, the judge concluded the Colorado law did, in fact, apply, thus mandating de novo review.  Giving no deference to Liberty’s determination and independently evaluating the evidence, the judge found that Liberty’s conclusions were not supported by a preponderance of the evidence and that Liberty “attached greater weight to the relatively scant evidence that supported a denial . . . than to the voluminous evidence that supported a contrary conclusion.”  The judge “conclude[d] that de novo review of this case dictates a different result than the arbitrary and capricious standard of review previously employed.”  He then ordered Liberty to pay Ellis the wrongfully denied LTD benefits.

28 01, 2019

Pre-Existing Conditions—Don’t let these landmines blow-up your LTD claim!

By | 2019-10-09T18:32:36+00:00 January 28th, 2019|Uncategorized|Comments Off on Pre-Existing Conditions—Don’t let these landmines blow-up your LTD claim!

Most long-term disability insurance policies (and some short-term disability policies) contain a clause excluding pre‑existing conditions.  This clause allows an insurance company to avoid paying benefits for conditions that existed before coverage began.

The most common clause provides that, if you become disabled within 12 months after the coverage began, no benefit will be paid if you received any type of medical treatment, care or service (including prescribed medications), related to the disabling condition during the 3 months before the coverage began (the “look-back” period).  Some clauses extend the period to the first 24 months of coverage, with a 12-month look‑back period.  Others provide that, if you were treated for a condition during the look-back period, no benefits will be paid unless you complete 12 months of coverage without further treatment for that condition.  Ultimately, the clauses vary and the applicable terms can only be determined by reviewing the specific policy at issue.

As a general rule, insurance companies apply pre‑existing condition clauses very broadly.  They look for any treatment received during the look-back period that could be used to justify denying benefits—regardless of how remote the relationship may be.  For example, consider someone involved in a serious accident shortly after his or her disability coverage begins, who undergoes multiple low-back surgeries, and is left permanently disabled.  In an effort to deny benefits, a company may look to a physician’s record documenting a nominal complaint of low-back pain during the look-back period.

If you are considering filing a disability claim, first determine whether you completed the policy’s pre‑existing condition period.  If you have not, then consider whether, during the look‑back period, you received any type of medical service (including prescriptions) that even remotely-relates to your disabling condition.  To the extent possible, you may want to delay your disability leave until you have cleared this landmine.  Too often, individuals lose disability benefits they would have otherwise received, only because they took disability leave before completing the pre‑existing condition period.

If you are concerned that your insurer erroneously denied your claim based on a pre‑existing condition or if you need assistance applying for benefits, the attorneys at Guerrini & Thompson, P.C. stand ready to help you evaluate whether you could benefit from our services.

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