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Who may I sue if my long-term disability benefits are denied, my employer, the insurance company, or both?



Attorney Cesar GavidiaAuthor: Attorney Cesar Gavidia

The answer is that it depends on the type of Plan; who funds the benefits and who is responsible for making the claim determination. In most cases, the entity sued is the disability insurance company, since it is the party responsible for both making the claim determination and paying benefits. Although it may be designating as the Plan Administrator, suing the employer that sponsors the Plan but otherwise does not fund the benefits or makes determinations on claims would not be appropriate.

However, what if the employer self-funds the Disability Plan, but delegates the claim determination responsibilities to an outside third-party administrator? It may be appropriate in this instance to sue the employer, since they fund the benefits, and the third-party administrator responsible for making the claim determination. Certainly, the employer may attempt to argue they are not a proper party to the suit since they do not make the claim determination and it is delegated to a third-party administrator, and the third-party administrator could try to make a similar argument and say that they are not a proper party to the suit since they do not pay the benefits. If it is determined that one of the two defendants should be dropped from the lawsuit, it may be done at a later time.

There are 34 opinions so far. Add your comment below.

Paul Nolan:

What do you do if the employer provides health insurance only if you are receiving LTD and the insurance company terminates your benefits?

Roger:

That may apply to long term, what do we have to protect us in the short term disability denial?

Attorney Stephen Jessup:

Paul,

Typically the only way to get the health benefits back is to successfully secure your LTD benefit again. If your claim is pending appeal please feel free to contact our office to discuss how we may be able to assist you in securing your benefit again.

Attorney Stephen Jessup:

Roger,

It depends on what party is funding the policy/disability benefit.

Roger:

I need help. I have been out of work from 10-20-2014.

Attorney Stephen Jessup:

Roger,

Please feel free to contact our office if you have any questions regarding a disability insurance claim.

Robert K.:

Please help me resolve my long term disability issues. My claim was denied right at the time my short term had expired. My doctor will not sign a work release untill he feels I am ready to return to work. I suffer with
bipolar with severe depression. His concerns are self inflicted injury due to the fact I cant sustain. I have already sold my house and will lose my transportation. Going thru the short term was a miserable experiance the documentation and holding payments only made my situation worse. The insurance company would lay the blame on myself or my doctor for the delays. This went on for six months. When the short term ran out they denied my long term which had been pending and in place. The ltd and the fmla procedure was approved thru our benifits specialist at the time. I was told I had the wrong information concerning a pre exsisting condition. I did not get a position offer back according to the fmla approved agreement and no return to work service clearance from my doctor. This will make my life extremly difficult. On the end of the month I will also lose my health insurance and will no longer be able to purchase medications and further treatments, and still no release for work. I have absolutely no recourse or means of support. This so called benefit and handling by the departments in charge has been so damaging to my health my doctor is worried about self inflicting injury. I sit here every day wondering if that is my only alternative. I have many other violations to list as well. I think this gets my point, now I have to do something before it is to late?

Attorney Stephen Jessup:

Robert, please contact our office to discuss your denial of benefits and your rights to appeal same.

Joe:

My wife is a massage therapist she hurt her arm at work and has been denied disability pay and workers compensation. She has been out of work for 6 months with 0 pay. We are financially crushed now, what can we do?

Attorney Stephen Jessup:

Joe, unfortunately, we do not handle worker’s compensation claims so you will need to contact a worker’s compensation attorney to best assess your options. Which insurance company is denying your wife’s claim for disability insurance benefits?

Ernesto:

I have a question, I have a claim going. They did not denied me but I have 180 days to show them proof of my enrollment. They asked a lot info from my doctor and I. We provided everything they requested; after 2 months they said my company did not enroll me. So, I no proof. The last 2 years every paycheck they took out over $9 for LTD. Who’s fault is it? I reach out to a disability attorney’s but they said my case is not denied yet. I need to contact my employer and ask them for proof. What I saw in the website for LTD they contacted my employer several times. How am I grantee that I will get proof?

Attorney Stephen Jessup:

Ernesto, I would agree that only your employer would be able to provide the documentation necessary to establish that you had enrolled in the plan. Have you spoken to your HR department?

Ernesto:

Yes, I have e-mailed HR asking for my proof. No response. It looks like they are not complying with my request. For my understanding The insurance company LTD been asking for my proof as well. It hard for me to get to work since my injury case.

Ernesto:

It makes me feel kinda of depressed due to the fact I paid for something that not available. For me and my family. Hopefully other at work are not paying for something thinking they are covered.

Sophie:

My LTD benefits were denied by my company’s insurance company after they had paid for 24 months because one of the diagnosis’ in my medical records was for depression (the plan only paid disability for 24 months for mental health claims). The reason why I was on disability was for 3 cervical spine surgeries, having nothing to do with mental health. The diagnosis for depression was “situational depression” related to having to give up my career because of the disability. It is my belief I was denied benefits as I was a high wage earner, with a salary of $90,000, meaning they would have had to pay 60% of that amount from my age of 48 until retirement. (This was back in 2011). I contacted an attorney at the time and they reviewed the case and would not take it on contingency, saying they felt they did not have a good enough chance of winning. I did not pursue other attorneys at the time due to chronic pain and other life circumstances. My only income at this time is SS benefits. Is there a “statute of limitations” on how long you can take legal action?

Attorney Stephen Jessup:

Sophie, most policies require legal action to be taken no later than three years after “proof of loss” is required. Courts typically interpret that to mean, within three years of the date of denial. If the claim was denied in 2011 then you be almost certainly beyond that timeframe.

Anne L.:

I received paperwork from my employer’s insurance company for a final “settlement” amount after workmans comp. I signed the agreement, as did my employer, and submitted it. Weeks later, the insurance company sent a new form, offering a reduced amount, saying the state Board notified them that they had miscalculated my degree of disability. Along with the letter noting their error, there was a letter from the state Board saying the insurance company could pay me the original amount, or the refigured, reduced amount. About a 1,500 dollar difference. The insurance is saying they will only pay the lower amount. But if the state Board says they can pay me either amount, and I signed the original paperwork from the insurance company accepting the higher amount, can’t I sue for the original settlement offer?

Attorney Stephen Jessup:

Anne, as we do not handle worker’s compensation claims (only disability insurance claims) you will need to consult with an attorney that handles such claims to best determine your rights.

Mike:

I’ve been waiting for my LTD provider to review my records since September 1st, 2017. At this point I believe they are playing games. I’ve got an undiagnosed condition that has me drinking rivers full of liquids throughout the day and night, whereby quality sleep is non existent. This is due to something causing severe dehydration and dry mouth. When I drink, its like I have a drain in my throat whereby I feel a need to guzzle down ice cold liquids. I attempted working for 3 months until the exhaustion got the better of me. I fell asleep at my desk and decided it was time to see my doctor who suggested I see specialists, which I have been doing. My job is both physically and mentally demanding and I cannot perform my duties under these circumstances. I’ve been pawning and selling my personal effects while waiting for the LTD provider to review my case for 6 months.

Attorney Stephen Jessup:

Mike, the carrier should have had a decision on a new filing within 90 days, barring waiting on any required information. Please feel free to contact our office to discuss your claim, policy and insurance carrier to determine how we may be able to assist you.

Ken:

My disability claim was closed after two years. They sited one of my doctors didn’t fill out their paper work (he was on personal leave at the time) and another said my condition was stable and didn’t fill out the return to work portion of the paper work (after feeling threatened from phone calls and fearing having to go to court). They also included some false statements but mostly toward conditions that were minor in their denial.

The real problem was that they sent out so much paper work/phone calls that no reasonable doctor would want to be bothered. They tried to mislead my doctors into thinking I was cleared by another doctor when I wasn’t. Between records requests and status updates it was something like 14-15 sets of paper work sent out in 2.5 months to three doctors.

The disability itself is listed for Crohns disease but there a host of other medical issues both related and unrelated. While some are easy to see (thyroid problems for instance) others such as joint pain and fatigue are not. My 180 days to appeal are nearing an end and I wanted to know if there is any downside to appealing their decision? Could they still go after me for overpayment etc.? This is scary because at this point non of my doctors will be bothered with more paper work. Also, they have been having their SSD company call me weekly for updates even though they are claiming I am not disabled. I have not been answering as I don’t see how I would be obligated as they are no longer paying me but as they keep calling there is clearing an ulterior motive.

Attorney Alex Palamara:

Ken,

I am sorry to hear of your denial. As the 180 days are coming to an end, please contact us at once! There is no downside to appealing their decision, but if an appeal is not timely filed, you will lose your rights under the policy. Regarding overpayment, if you get approved for an offsettable benefit, they can go after an overpayment if they overpaid you, but please call me at once so that we can discuss everything at length. We are available at your convenience.

Alden J.:

I was approved by my Insurance company AUG for LTD benefits. They paid and approved the claim then 6 months later no new changes in health. They discontinued benefits based off the same medical information they approved it on. Is this grounds for suit now? Do they settle usually on these claims?

Attorney Jay Symonds:

Alden, if this is an employer provided group disability policy governed by ERISA your next step would be to file an appeal. You must exhaust all administrative remedies before filing a lawsuit. I suggest you contact our office and speak with one of the attorneys to address any additional questions you have regarding your specific situation.

Teresa:

I have herniated disc in my Low back and neck, cervical spinal stenosis, depression and anxiety due to losing my income and life changing conditions. I’m a Registered Nurse, floor nursing heavy lifting of patients required, standing, walking, sitting cause pain. I have bilaterally arm and leg numbness,chronic pain, sleep deprivation, have had many falls one in which I almost broke my right ankle. Others have further injured my back and neck causing increased pain. I have seen a neuro surgeon who does not recommend surgery at this time. He wants to wait and see if I can recover without surgery.

I am told by the LTD I am under review as it appears I am not medically supported. Of course I will have to appeal if they deny my case, but it sure is going to add to my anxiety and depression. I will have to sell my house to keep from losing it. I wish there were laws in place they could be held accountable for denying cases and caus causing people to lose everything just because they can do this without any repercussions to their company.

Attorney Alex Palamara:

Teresa, the laws that govern most disability insurance claims (the ERISA Laws) are not fair and we continue to do whatever we can to fight them. If your claim is denied, it sounds like a case we would like to take on. In the meantime, I will gladly speak with you at your convenience so that we can discuss your claim and any actions that can perhaps be taken now to attempt to prevent a denial. Please call me at your convenience.

Kathie:

My husband is a sales representative and earns a 35k salary and commissions and for 2018 earned 70k. the short term disability plan is self funded and a third party advises to pay. We have a copy of the summary plan and I also asked for the master plan and the HR rep said that they don’t have a master plan and the SPD was what they had. The eligible group is “all employees”. There are 2 earnings defintions as noted below and the employer is adamant he is in the “definition of covered earnings” and that the other is for commission only employees. There are no definitions of the types of employees who belong in each earnings definition group in the SPD. I think the commission earnings encompasses salary and also includes commissions. Am i able to sue them for the commissions as part of his earnings as he has been paid 70% of 35k. I work for a disability company and the second earnings definition is what we use for sales reps who earn both. I can’t believe my husband is the only victim of this and others are owed this pay too.

Definition of Covered Earnings
Covered Earnings means an Employee’s wage or salary as reported by the Employer for work performed for the Employer as in effect just prior to the date Disability begins. It does not include earnings received from commissions, bonuses, overtime pay and other extra compensation. Covered Earnings are determined initially on the date an Employee applies for participation. A change in the amount of Covered Earnings is effective on the first of the month following the change. Any increase in an Employee’s Covered Earnings will not be effective during a period of continuous Disability.

Definition of Covered Earnings for Commission Employees
Covered Earnings means an Employee’s wage or salary as reported by the Employer for work performed for the Employer as in effect just prior to the date Disability begins. It includes earnings received from commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are determined initially on the date an Employee applies for participation. A change in the amount of Covered Earnings is effective on the first of the month following the change.

Attorney Alex Palamara:

Kathie, I am sorry to hear of the trouble they are giving you regarding your husbands earnings. I would like to view the SPD. Please contact our firm at your convenience so that we can discuss his claim.

Tracy:

I applied for our Company’s group LTD Coverage. Unfortunately there was a clerical error when answering the Yes/No questions on the evidence of insurability. (I clicked the yes for the COPD/Emphezema). The company denied my application due to the COPD. I then submitted a corrected COI with a letter of explanation. From there it has been requests for physicals, bloodwork, doctors notes and each time they deny me. They keep changing why they are denying me. The last denial was for a condition I dont have and when asked to send notes relating to it, I couldn’t since I don’t have it. And they denied me again. I know there are employees on our coverage that have some pretty severe conditions, I feel like I am being discriminated against because of my initial clerical error. Now they just keep saying “Denied”.

What are my options at this point?

Attorney Rachel Alters:

Tracy, you may have the right to appeal the decision. Possibly HR of your company can assist you in how to best handle the denials.

Lindsay:

I was took off work in November of 2018 by my doctor. I filled for short term and was approved in January at that time my benefits had ran out for short term so it was them switch to long term in February. I have yet to receive anything. They keep telling me its pending on a approval. Here it is middle of June and nothing I am about to loose my home and car. What are my options?

Attorney Cesar Gavidia:

Lindsay, please contact us directly to discuss your options with one of our disability insurance attorneys. Your disability insurer may have exceeded the time period allowed under ERISA to make a decision on your claim.

Ann:

Hi,
Back in April 2019 my company offered (for the 1st time in 15yrs) LTD. After a meeting with the representative, I was the only employee out of 10 to opt in for LTD, as it would be an employee paid expense unlike STD paid by the company. I signed paperwork on that day opting in. About a week later my manager told me she had unsuccessfully signed me up due to technical errors and that she would get it corrected before end of enrollment period. Months go by and I realize the deductions haven’t started to come out of my pay checks. All this time I’m thinking I’ve been enrolled. I am usually not opening my paper check print outs as I have direct deposit.

I go to my manager and she says “they weren’t able to get me enrolled in time and the open enrollment is closed”. I call HR and she tells me that my manager instructed her that I stated to “surpass this enrollment period for me and just enrollment me next period”. Which is a complete lie because we haven’t had a conversation about my enrollment other than her telling me they were working to get the problem corrected. What should I do? Is there something legally that can be done? As I will soon be on short term disability due to a huge surgery and may need LTD as insurance.

Attorney Jay Symonds:

Ann, this appears to be an employment issue with your employer. Without knowing all the details regarding the enrollment process, where the breakdown occurred, and which party bears the responsibility, it would be difficult to say what recourse you have but it seems more likely with your employer, not the insurance carrier. You should pursue further with your HR department.

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