WARNING: Lincoln Financial Disability Denial Requires Two ERISA Appeals before Filing Suit
Author: Attorney Rachel Alters
You MUST file TWO appeals with Lincoln prior to filing suit!
Most long term disability insurance companies only require one mandatory appeal prior to initiating a lawsuit in federal court. Some insurers allow a voluntary appeal after the first appeal is denied, but do not require a second appeal prior to filing suit. However, Lincoln National Life Insurance Company requires TWO MANDATORY appeals before a suit may be filed in federal court. Lincoln requires two mandatory appeals by claimants in order to exhaust all administrative remedies. It is extremely important that this administrative process be followed in order to preserve your rights to your disability benefits. The plaintiff in the case below did not file a second appeal and as a result lost his rights to his LTD benefits.
In the case of Sylve v. Lincoln National Life Insurance Company, out of the Eastern District of Louisiana the plaintiff brought suit against Lincoln for failure to pay LTD benefits. He had fallen off a crane at work and was disabled as a result. Lincoln paid his LTD benefits for 24 months under the “own occupation” definition, but terminated his benefits once the definition changed to “any gainful occupation.” The plaintiff’s attorney filed an initial appeal with Lincoln which was again denied. In the denial letter, Lincoln stated: “Based on the information provided, we have determined that we are unable to approve benefits beyond September 1, 2013. As a reminder, your client has exhausted the first level of appeal. If you or your client disagrees with this decision you or your client may pursue the final administrative appeal… such request must be made in writing by May 22, 2014.”
A second appeal was never formally filed with Lincoln. According to ERISA, a plan participant has standing to bring a civil action “to recover benefits due to him under the terms of his plan or to enforce his rights under the terms of the plan.” 29 U.S.C. § 1132 (a)(1)(B). Before resorting to federal litigation to recover benefits, “claimants seeking benefits from an ERISA plan must first exhaust available administrative remedies under the plan.” According to the Court in Sylve, the plaintiff failed to exhaust all administrative remedies under the plan and dismissed the case with prejudice.
The law firm of Dell & Schaefer Chartered did not represent the plaintiff in the above matter. However, we felt that it was important to bring this case to the attention of those who may be insured by Lincoln to ensure that this unfortunate scenario does not happen to them.