Though the judgment against the insurer was swift, a recent ERISA case is a timely reminder that sometimes insurers will resort to the benefits cancellation equivalent of throwing pasta at a wall, hoping something will stick.
In Caudill v. The Hartford Life & Accident Ins. Co., the plaintiff’s long-term disability benefits were canceled after a Hartford medical reviewer concluded that he could return to work in a sedentary role. This change of heart came as a surprise to the plaintiff, as he was not supplied with a copy of the medical reviewer’s report.
No specific accusation was formally submitted, but it’s an open secret in the long-term disability insurance arena that insurers routinely deny and cancel valid claims in the hopes that the claimant will give up and drop the matter. In this instance, Hartford’s cancellation of benefits had all the hallmarks of these classic tactics.
Fortunately, the plaintiff had the added strength of a recent Department of Labor amendment on his side, explicitly requiring insurers to provide claimants with a copy of reports that affect their benefits. Withholding this information violated the plaintiff’s right to a full and fair review, as they could not rebut a decision effectively made in secret.
The missing report aside, the court noted that Hartford’s medical reviewer had ignored information in the plaintiff’s file, plainly detailing why he could not return to the workforce, even in a sedentary role.
With a clear administrative failing and an unmistakable disregard for the plaintiff’s legitimate disability on the table, the court ruled in favor of the plaintiff, including a retroactive reinstatement of unpaid benefits with interest.
While we tend to focus on court rulings that go against insurers in this blog, the unfortunate reality is that for every plaintiff who wins their rightful benefits, there are an untold number of claimants who quietly accept defeat. Lengthy, possibly expensive legal battles, squaring off against high-priced insurance lawyers, are a strong deterrent for many people seeking ERISA benefits, and insurers know this.
Consulting an attorney about questionable insurance disputes never hurt anyone. Many claimants are surprised to learn that they are not alone, and, in cases like the one above, their case may even be a relatively easy slam dunk win.