Is there an advantage to filing an ERISA disability lawsuit after the expiration of the 45 day deadline and before the disability insurance carrier makes a decision on an ERISA Appeal?
Yes, as it can change the “standard of review” a court must apply at trial from the “arbitrary and capricious” standard of review to a “de novo” standard, which in turn increases the chances of success at trial.
Arbitrary and Capricious Standard in Disability Insurance Cases and Discretionary Clause
In the majority of ERISA governed long term disability policies, the insurance company adds a “discretionary clause” (although more States are banning these clauses), which allows, the insurance company what amounts to free rein to interpret the provisions of its policy. This in turn means that at trial the “standard or review” with which the court will determine entitlement to benefits will be under an “arbitrary and capricious” standard of review. Under the “arbitrary and capricious” standard of review the plaintiff must prove (1) that they are disabled from a medical condition and (2) that the insurance carrier acted “arbitrary and capricious” (unreasonable) in denying the claim. As we have discussed in numerous videos and articles, this latter step is where most insurance companies prevail, as it does not seem to take much for a court to determine an insurance company gave a reasonable review of a claim. In short arbitrary and capricious is a bad thing for claimants.
HOWEVER… and the De Novo Standard of Review
In insurance carrier’s failure to provide a response to an appeal within the 45 day timeframe (in the absence of tolling of time to review or a proper request for an extension) allows an insured to file lawsuit under ERISA predicated upon 29 C.F.R. § 256.503-1(f), which reads in part:
“[A] claimant shall be deemed to have exhausted the administrative remedies available under the plan and shall be entitled to pursue any available remedies under section 502(a) of the Act…”
The reason for this is to protect a claimant by insuring that the administrative appeals process does not go on indefinitely.
So what happens when you file a lawsuit based upon a failure to make a timely decision? Your claim could be reviewed under the de novo standard of review. Under a “de novo” standard of review the ultimate question of disability is limited to whether or not the Judge feels that the insured is disabled under the terms of the policy. This takes away the deference a judge must give to the review conducted by the insurance company under the “arbitrary and capricious” standard of review. Thus the de novo standard of review is a great thing for disability claimants.
The Courts Agree With The Need to File A Timely ERISA Lawsuit
In a recent Pennsylvania federal court decision in the matter of Dibartola v. The United States Steel and Carnegie Pension Fund (“Pension Fund”), the Court eludes to how important the timing of the filing of a lawsuit can be. In the Dibartola case, the plaintiff was denied disability benefits under the Pension Fund and ultimately filed an ERISA appeal of the denial. Following the submission of the appeal, the Pension Fund did not render a decision on the claim within the 45 day deadline imposed by ERISA. However, instead of filing lawsuit immediately on account of same, Dibartola waited until after a final decision to deny the benefit was rendered by the Pension fund. This spelled the difference between an “arbitrary and capricious” standard of review and the much more favorable “de novo” standard. The Court states in its opinion:
“If Plaintiff had chosen to proceed prior to the administrative determination denying benefits, and thus filed suit under 29 U.S.C. § 1132(a), on the basis of the Plan’s failure to comply with 29 C.F.R. § 256.503-1(f), the Court’s standard or review, according to sister Courts of Appeals, would be de novo…”
However, Plaintiff chose not to file suit after the period of time under § 2560-503-1(f) had arguable expired. Instead, she chose to await a decision from the Plan… [W]hen a claimant makes the choice to wait for a determination from a plan instead of filing suit as permitted by section 2560.503-1(l), the Court is require to apply an arbitrary and capricious standard of review.
This is not to say that even if Dibartola had filed suit immediately after the expiration of the deadline that the court would have found her disabled even under the de novo standard of review. However, it is to say that Dibartola would have had a much better chance of success of prevailing at trial. It should be noted that this firm did not represent Dibartola nor were we involved in any way in the case.
What We Learn
The Courts take the deadlines imposed by ERISA very seriously and failure to file a lawsuit when it is ripe could have a detrimental effect on your claim for benefits. If your claim for long term disability has been denied or your insurance company has not responded to your appeal, please feel free to contact Dell Disability Lawyers for a free consultation to determine how we may be able to assist you. Hiring an experienced ERISA disability attorney can be the difference between collecting and not collecting.
Resources to Help You Win Disability Benefits
Get Your Disability Application Approved
Prevent a Disability Benefit Denial
Negotiate a Lump-Sum Settlement
Our goal is to negotiate the highest possible buyout of your long-term disability policy.
Attorney Alexander Palamara of Dell Disability Lawyers gets LTD Benefits Reinstated for former Walmart Manager who is now found disabled from Any Occupation
NFL Disability Review Board Ignores Evidence of Disability and Appeal Court Reverses Lower Court Decision
California Federal Judge Orders Standard Insurance Company to Pay Disability Benefits to Teacher with Lyme Disease
Reviews from Our Clients
Very satisfied with the work of this team. Took well care of my case and took all the necessary time to be responsive and attentive when I had questions. Guided me through recovery and returning to normalcy. All thanks to Jason & Tabitha, thank you!
I’m extremely satisfied with the experience I have had with this firm from day one. The lawyer who has handled my case, Alex, is very efficient and attentive to all my questions and concerns. They are always aware of how my case has gone and they care about my health. I feel optimistic with them because they are very attentive during the process of my claim. I would not hesitate to recommend families and friends if in any situation they need their services. Kathleen as well has been very well and assisted me with this case. I highly appreciate everything they have done for me.
It’s unfortunate when disability insurance companies come after older disabled policyholders just to help their bottom line. It can be a living nightmare the damage they can do to a family. Dell Disability Lawyers are polite, understanding and knowledgeable. They call you back and answer any question you have no matter how unimportant it can be. The amount of stress they took off of myself and family was incalculable. I recommend them highly to take care of any disability case whether it be filing for benefits or reversing a claim decision. They are outstanding.
I could not have been happier or more appreciative of the hard work they performed on my behalf. I was well briefed on my case and it was closed in a timely manner with a financially successful resolution.
Mr. Symonds and Sonia as well as everyone else we have worked with throughout this process have been very helpful, professional and caring to our situation. We are very thankful to have this great team on our side.
Without them my LTD company was dropping my plan with me still suffering from my accident, even with doctor’s statements I’m still disabled. The LTD company didn’t want to advance my policy to the next stage of years of pay. Dell Disability Lawyers saved my policy, and helped to enforce the LTD company’s own policy (for its policy holder, me) that I would be covered still under the LTD policy I had paid for at my previous job, when my accident occurred. These lawyers know what they are doing and can help you too. LTD companies will try to drop you when you still need coverage just because they don’t want to pay on your policy anymore. Don’t let them break contract with ya because they are trying to get out of it. Hit em with legal action to ensure the continuation of your policy you paid for. Dell Disability worked very well for me and continue to do so.
I was denied long term disability benefits from The Hartford after being on it for years. I found Dell Disability Lawyers after doing research online. In a matter of days they responded and explained to me everything that would be done. Dell Disability Lawyers were able to settle my suit against The Hartford very quickly and responded to me quickly. I would definitely recommend this team of lawyers for anyone that is fighting for their disability insurance.
I have had nothing but a great experience with Dell Disability Law Firm. Mr. Alex Palamara and his team went above and beyond my expectations. They will respond to emails and phone calls in a timely manner. Thank you once again for taking my case.
This law firm is the best so far. MetLife denied me two times, they appealed two times for me and they won of course. So if you are on disability and want a chance at winning your case use this firm Dell disability lawyers, kind courteous understanding and they get the job done. You won’t be disappointed.