What you should look for in a denial letter: disability insurance company’s inadequate denial letter causes court to reinstates insured’s disability benefits

Citation: Schneider v. Sentry Group Long Term Disability Plan, No. 04-2689, 2005 U.S. App. LEXIS 19273. (7th Cir. Sept. 7, 2005).

For almost three decades, Janet Schneider worked for Sentry Life and performed many different jobs, ultimately leading up to a position of Director of Underwriting Services. As an employee of Sentry Life, Ms. Schneider participated in Sentry Life’s Group Long-Term Disability Plan. Unfortunately, on October 29, 2001, Ms. Schneider was forced to apply for disability benefits as result of major depressive disorder.

In May 2002, Sentry Life approved Ms. Schneider’s disability benefits and commenced payments. Shortly thereafter, Ms. Schneider submitted to an independent medical evaluation requested by Sentry Life and performed by Sentry Life’s expert. The expert opined that Ms. Schneider was capable of returning to work without any special accommodations. Relying on this evaluation, Sentry Life, sent Ms. Schneider a letter notifying her that her benefits were terminated as she “recovered” from her condition and could return to work.

Ms. Schneider brought suit against Sentry Life alleging that its denial letter did not provide her with an adequate explanation of the reasons for terminating her benefits. Specifically, Ms. Schneider alleged that Sentry Life’s denial letter did not meet ERISA’s statutory and regulatory requirements.

The court held in favor of Ms. Schneider and ordered retroactive reinstatement of Ms. Schneider’s disability benefits. In arriving in its decision, the court reiterated the legal requirements that must be contained in a denial letter. The requirements are as follows:

The denial letter must:

  1. Set forth the specific reason or reasons for terminating benefits;
  2. Reference the specific policy language on which the termination of benefits are based;
  3. Provide a description of any additional material or information necessary for the insured to perfect the claim and an explanation of why such material or information is necessary; and
  4. Set forth a description of the plan’s review and appeal procedures and the time limits applicable to such procedures.

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Dell & Schaefer Client Reviews   *****

Jim F.

My employer offered both Short Term Disability and Long Term Disability insurance as optional benefits among others. The premiums were significant, but since they could be payroll deducted I felt they could be reasonably managed and the security of continued income in the event of a medical disability was well worth the investment. As with the purchase of a first aid kit, most would prefer never having to use it.

I have been very fortunate to have had few illnesses or injuries throughout my life and more specifically my 45 year career as a healthcare professional. It wasn’t until early in 2012 that I was diagnosed with a chronic, progressive disease of the eye. Symptoms were minimal at that time, though regular visits to a retinal specialist, including regular therapy by ocular injection, were necessary to slow its progression, the symptoms did not appreciably interfere with my work. In spite of my treatments the condition continued to progress. In early 2014 the symptoms began to interfere dramatically with my day to day duties. My job required significant computer use and the reading of copious amounts of medical documentation. It became evident to me that I could no longer meet the expectation of my management and clinical position without working frighteningly long hours and enduring the relentless eye strain and other symptoms related to the illness.

Though I had always planned for eventual retirement from my full-time position, like most professionals I had hoped to be able to continue to practice my profession on a part-time basis throughout my retirement as long as I remained competent and able. That was not to be. Thankfully, I had the foresight to elect the disability benefit options offered by my company and have the premiums payroll deducted for many years. I notified my supervisor and HR representative that I had to stop working due to my condition and proceed with the disability application process.

All went very well and after using up my accrued vacation and sick time, my short-term disability benefits commenced. Since my condition is progressive and incurable I felt secure in knowing that once my short-term benefits were exhausted my benefits would continue under the long-term policy. However, much to my surprise, after receiving about a month of benefits I received notification from the insurance company that a decision had been made to terminate my benefits due to lack of objective medical evidence to support my claim, though significant documentation had been provided by my retinal specialist.

I was bewildered and unsure of how to proceed with an appeal of that decision. Since I had 180 days to do so, I decided to research the matter thoroughly. In spite of my being a veteran healthcare professional everything I had been reading on the subject cautioned about attempting to proceed with an appeal on my own. Legal representation was highly recommended.

I then began a review of local attorneys, hoping to find one that provided enough documentation on their website that indicated experience with non-social security disability related cases. I was also interested in seeing evidence of some experience with disability cases related to diseases of the eye and resultant vision impairment. I was unsuccessful.

So I expanded my search to include national law firms. It was then that I discovered Dell & Schaefer. After thoroughly reviewing their website, watching many of the video discussions, noting experience with vision related cases, particular documentation related to the insurance company that handled and then eventually denied my benefits, and reading a significant number of testimonials, I decided to request a free consultation as advertised. It was one of the best decisions I have ever made.

After that consultation, I was very confident that I was in very skilled hands which alone reduced my anxiety level immensely. Attorney Alexander Palamara and his Legal Assistant, Kathleen Bordes, immediately began managing my case, their professional expertise clearly evident.

They worked closely with my retinal specialist, my optometrist and the insurance company in compiling the medical documentation necessary for a successful appeal in an amazingly short period of time, keeping me fully informed all along the way. Shortly after being notified by the insurance company that my benefits would be reinstated and paid through the full term of my short-term policy I received a lump-sum payment.

Once the short-term disability appeal was successfully completed, Alex and Kathy immediately addressed the long-term policy benefits. Again in a remarkably short period of time I was granted those benefits, receiving a lump-sum payment for benefits to date and will receive a payment monthly going forward per the terms of my LTD policy.

I am extremely pleased with how my case was handled and the very favorable outcome. Alex and Kathy were a delight to work with and extremely professional in every way. Incidentally, the fee I paid to Dell and Schaefer for their incredible representation was very reasonable and very well earned.

I highly recommend the services of Dell & Schaefer to anyone who may find themselves in a similar disability-related situation.

***** 5 stars based on 202 reviews

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