The Third Circuit Court of Appeals recently rendered a very difficult decision in favor of Hartford Insurance Company dealing with the interpretation of pre-existing condition clauses in long-term disability income policies. The three judge panel ruled 2-1 in favor of upholding Hartford’s denial of disability benefits. The law in each state is different for pre-existing conditions, therefore a disability claimant should consult with a disability insurance attorney prior to filing a claim for benefits.
In the case we are going to consider here, Jay Doroshow v. Hartford Life and Accident Insurance Company, two judges found Hartford had been neither capricious nor arbitrary when the insurance company denied Doroshow’s claim for long-term unemployment. The third judge disagreed, arguing in his dissent that Doroshow had not received treatment for the condition that precipitated his claim with Hartford. We will have to look at the backdrop against which this case developed.
Jay Doroshow joined the staff of CVS Corporation and qualified for coverage under its long-term disability income insurance plan (administered by Hartford) on July 1, 2006. The policy stated that benefits would not be payable for disabilities “caused by, contributed to, or resulting from… a pre-existing condition.” The look-back period on the policy was 12 months (3 months for exempt employees).
Doroshow went in for an electomyographic (EMG) test on July 25, 2005, just under a year from his effective date of coverage. While this test demonstrated that Doroshow had some form of motor neuron disease, it did not lead to a diagnosis of ALS.In December of 2005 Doroshow suffered a stroke. On May 16, 2006, during a follow up visit for the stroke he had previously suffered, Doroshow’s doctor noted in his file that he felt that ALS was not the diagnosis. It wasn’t until March 15, 2007 that Doroshow was finally diagnosed definitively with ALS. He applied the following day for disability benefits under his plan with Hartford.
After reviewing Doroshow’s medical information, Hartford denied him benefits based on the fact that he had been under treatment for motor neuron disease during the three month look-back period. Because his doctor had discussed the possibility of ALS during his May 15, 2006 office visit, Hartford considered ALS a pre-existing condition.
Doroshow appealed first with Hartford, and then filed an action with the District Court for the Eastern District of Pennsylvania, claiming that Hartford’s denial was arbitrary and capricious. Both parties filed motions for summary judgment. District Court granted summary judgment to Hartford stating that Doroshow had not demonstrated the arbitrary and capricious nature of Hartford’s denial.
When the appeal of this decision reached Third Circuit Court of Appeals, the primary consideration was whether Doroshow’s condition should be considered pre-existing even though it had not been diagnosed during the look-back period.
Two of the judges ruled that it could be, while one dissented. The two judges based their reasoning upon the fact that not only had his physicians suspected ALS before the look-back period, Doroshow had a family history to suggest that this was a reasonable diagnosis. The court rules that for Hartford to deny disability benefits based on this information was logical not capricious.
These two judges agreed with the dissenting judge that in general they would not consider ruling out a condition as giving advice or treatment for a condition. But based on Doroshow’s family history of ALS, the two judges felt that it was not unreasonable for Hartford to determine that he received advice from his physician for this condition, especially when two other doctors had also considered ALS in connection with his symptoms.
The dissenting judge argued strongly that probability is not pre-existing. She stated her concern that this decision contradicted previous decisions. She also felt their decision would strengthen the tendency for insurance companies to look at any symptom that an insured person has during the look-back period as demonstrating a pre-existing condition. Her concern is that by concluding that “Doroshow likely had ALS all along, ALS was a “pre-existing condition.'” This does a disservice.
Cases like this will continue to be dicey, because case law interpretation isn’t a science. It involves trying to define exactly what policy language means. We can expect to see more cases that test the definition of what a pre-existing condition really is.