Life Insurance Company of North America sued under ERISA in three different cases for denial to pay disability benefits

Three different lawsuits were recently filed by disability lawyers under the Employee Retirement Income Security Act (ERISA) against the Life Insurance Company of North America (LINA) in the Federal Courts of Illinois and Minnesota for improper denial of claims for disability benefits.

The First Case

In the first complaint, the plaintiff through a disability attorney filed a lawsuit in the District Court for the Northern District of Illinois. The plaintiff was employed as a general manager for SCI Funeral and Cemetery Purchasing (SCI). While working for SCI, the plaintiff participated in both a short-term and a long-term disability plan that was sponsored by SCI and underwritten and administered by LINA.

The plaintiff stopped working at his position on December 10, 2009 due to symptoms associated with a major depressive disorder, acute stress reaction, generalized anxiety disorder, personality disorder, hypertension, agoraphobia, and insomnia, along with side effects from his prescribed medications. Plaintiff claimed short-term disability (STD) benefits on December 11, 2009.

Despite multiple requests from Plaintiff, LINA failed to provide a copy of the STD disability plan, even though LINA used parts of the Plan’s language to deny benefits. Initially, LINA did pay for benefits after acknowledging Plaintiff’s disabilities in a May 14, 2010 letter, but only through April 10, 2010.

STD benefits were stopped on May 27, 2010; LINA claimed that Plaintiff no longer met the Plan’s definition of disability. Plaintiff appealed the denial letter and submitted extensive medical evidence to prove his disability, but LINA again denied Plaintiff LTD benefits on October 27, 2010. As all administrative appeals have been exhausted, Plaintiff filed this lawsuit.

The Second Case

This lawsuit was filed at the District Court for the District of Minnesota Fourth Division by a disability attorney. The plaintiff was an employee for Aldi. She was provided with a LTD coverage plan that was fully insured and administered by LINA. Due to her salary, Plaintiff was a Class 1 employee under the Plan.

During her time working as a full time store manager for Aldi, in or about October 2005, Plaintiff unloaded a grocery truck at Aldi and sustained an injury that caused pain in her back and lower-right extremity. This same incident occurred again in or about May 2006 and on or around July 12, 2006. After the July incident, Plaintiff was no longer able to work as a Store Manager.

Despite several treatment methods, including facet joint blocks, right transforaminal epidural steroid injection, a three-level lumbar discography, and a spinal rehabilitation program, from November 2, 2006 to May 30, 2007, little to no improvement was made in her condition. On or around April 22, 2007, Plaintiff filed a claim for LTD benefits with LINA. LINA granted LTD benefits on September 5, 2007, with the period beginning January 11, 2007 after a benefit waiting period of 180 days.

Plaintiff underwent recommended intradiscal injection on October 4, 2007. On or around November 21, 2007, LINA informed the Plaintiff that LTD benefits would be terminated and that her claim would be denied beyond October 19, 2007. LINA’s claim was that there was no longer continuing documentation to support Plaintiff’s inability to perform her own occupation.

Plaintiff appealed denial. On or around February 6, 2008, LINA reversed its denial and reinstated Plaintiff’s LTD benefits. Plaintiff underwent more procedures to reduce her lower back pain between April 2008 and August 2009. LINA again informed Plaintiff that it was terminating her LTD benefits in October 2009 because the medical information on file no longer supported that she could not do her occupation.

On or around November 10, 2009, LINA stopped paying Plaintiff’s LTD benefits. Plaintiff immediately appealed this denial, supplying medical evidence and undergoing tests to prove she was so disabled that she could not continue her occupation. On or around December 18, 2009, LINA again denied the Plaintiff of LTD benefits. Plaintiff again appealed on June 16, 2010 after undergoing more procedures and supplying more evidence to LINA. After continuous dialogue and submittal of evidence from the Plaintiff to LINA, LINA again denied Plaintiff LTD benefits on November 23, 2010, stating that the Plaintiff can do sedentary work based on observance of videos provided to LINA. Since all administrative levels of appeal were exhausted, Plaintiff filed this lawsuit.

The Third Case

The third case was filed by a disability attorney at the District Court for the District of Minnesota Fourth Division. The suit alleged that LINA denied LTD benefits beyond Dec. 16, 2009 despite the Plaintiff undergoing numerous operations and procedures for a fall that occurred in her cabin on August 10, 2009. It was very difficult for the Plaintiff to comply with LINA’s requests for updated medical records since both LINA and Lakeview Clinic, where Plaintiff received continuous treatment for her injuries, would not cooperate on providing updated medical records in a timely fashion.

LINA claims that the records did not indicate a continuation of benefits was needed beyond December 16, 2009, despite numerous submissions by the Plaintiff toward her injuries and treatments. On August 20, 2010, LINA again denied the Plaintiff’s continuation of LTD benefits. Plaintiff appealed this denial on November 2, 2010, including additional medical evidence to support her disability claim. LINA again denied her claim on January 18, 2011, citing no “consistent functional impairment.”

Relief Sought in the Lawsuits

In the three mentioned cases, the relief sought by the plaintiffs from LINA in their lawsuits comprises of:

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There are 5 comments

  • Thanks! I will be in touch. I did not mean to post as a comment to the other cases, should have put it in as a consultation request. Just got to writing the summary and did not realize till after I posted.

    But I am quite certain the tactics used with me were carefully developed by CIGNA to cut short the payment on legitimate claims, and take it as 100% profit (off the suffering of recovering employees who were promised the employer STD benefit).

    John B.Jul 10, 2014  #5

  • John,

    Please feel free to contact our office to discuss how we may be able to assist you.

    Stephen JessupJul 7, 2014  #4

  • CIGNA (LINA) approved my STD, then terminated my STD benefits after 3 months, while on 6 months leave from work due to near fatal ventricular tachycardia, and healing of my ICD implant. The plan for my employer claims to be governed by the laws of their home state, Minnesota, though I live and work in Florida.

    My job is very physical, frequent lifting 50-100 lb and above shoulder level, though I am an assistant store manager, in the ‘lean’ operations concept, assistant managers are also the main stock help in this retail store.

    Ventricular Tachycardia is a class of heart arrhythmia, and the type of pattern I had iis normally fatal, espeically since it was unwitnessed, involved passing out, several more attacks then self-report to the ER. I had no history of heart trouble, though my family did. My attacks were triggered by dehydration and low potassium, but no heart blockages were found, just a minor level of ventricular valve leakage. The hospital APs required me to accept an ICD implant, though the full origin of the VT episodes was not determinable.

    During the approved period of STD benefits, my attending physician (AP) established lifting restrictions for my left arm for weight and range of motion, to ensure I did not damage heal in of the implanted disc and cable.

    After 8 weeks the weight limit was raised to 20lb with my left arm, no motion above the shoulder. That limit continued after the 12 week exam. CIGNA/LINA refused to extend my claim beyond 12 weeks and closed it.

    I had not received STD payment in 2 weeks as they claimed to ‘not have enough information’, then I happened to call as they were drafting the letter denying further payment. Though my employer refused to allow my return to work with any physical restrictions (judging I could not do the great majority of the job), CIGNA claimed my inability to perform my job due to AP restrictions was not a ‘disability’ or functional incapacity. Therefore, they refused to pay the folllowing 3 months of 60% base pay which was the employer-promised STD benefit.

    It seems just plain wrong for an employer, as administrator of their STD ‘benefit’, to refuse my return to work with limitations since they believe I can’t perform the job, then at the same time, their insurance agent says I dont have a disability or ‘functional incapacity’ (basing it only on medical anatomical damage).

    My contention is the physician restrictions were reasonable and necessary, given the severity of my VT attack and high probability of eventual recurrence, and the extra healing of the ICD necessary due to my highly physical work. I also am thin, and the device protrudes 3/4″, stretches my skin, and is painful if bumped, so it is not as quick a recovery as heavier people.

    The money is only $6000 but is big when it is all you have during that time. LINA played little games, such as asking my VA doctor to provide more info, several days before the STD payment transmission, then deny payment for the week, saying they didn’t recieve information yet.

    Meanwhile, my employer HR reps implied that ‘usually’, STD once approved, runs up to the time of an employee’s return to work. Initially the AP wanted me out thru 9 months, but I convinced him that 6 months might be good enough since I would be terminated waiting any longer (according to another employer letter).

    And to me it also is a matter of principle. I already obtained the LINA admin file, and wrote a letter requesting appeal and that they withold their appeal decision until I have opportunity to submit complete information.

    My AP is a busy cardologist at a VA hospital, so I have had limited access and no ‘functional capacity’ or ‘doctor’s opinion’ yet on the basis for the length of lifting restrictions (though it is common sense), only the medical records which don’t have a lot of detail.

    Do I have a case? And, is it related to any potential ongoing class actions?

    John B.Jul 6, 2014  #3

  • Colleen,

    Although I wholeheartedly agree with you, unfortunately, there is nothing illegal about the offset. The policy is essentially a contract- the premium is paid in accordance with the language contained in the policy purchased by the employer and provided to the employee. However, dependent on the policy language there are times that the carrier erroneously oversteps its bounds when applying offsets. If you do have any questions, please feel free to contact our office.

    Stephen JessupNov 15, 2013  #2

  • Somone needs to stop long term disability companies from offsetting an injured person’s recoveries for injury, pain and suffering, etc. While I understand any portion attributable to “income” could be offset, they are taking every penny my husband won in his personal injury claim and claiming they can offset the amounts they were supposed to pay by the other settlement. This effectively took away any other award he won thus removing his rights to recover from other insurance companies for pain and suffering. CIGNA and/or LINA need to be stopped.

    Colleen OuimetNov 14, 2013  #1

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