Anyone familiar with the sometimes inexplicable state of disability insurance claim denials won’t be shocked by a recent case where an insurer’s arbitrary machinations ended in a swift summary judgment.
A seemingly unremarkable benefits application
In Mucciacciaro v. Hartford Life & Accident Ins. Co., the plaintiff applied for long-term disability benefits after her chronic back problems made her job as a dental hygienist prohibitively painful. The plaintiff had first requested accommodations from her employer that would allow her to keep working, but her employer denied the request.
Low on reasonable options, the plaintiff continued working full-time through the pain while she applied for long-term disability benefits. Hartford denied her application, pointing out that if the plaintiff was currently managing to work full-time, she could continue to perform her job’s essential duties, despite her condition.
A reasonable appeal
Hartford’s denial implied that if the plaintiff genuinely experienced unmanageable back pain, she would quit her job. The plaintiff appealed, explaining that she worked through the pain while she requested, and was denied, accommodations that would allow her to continue working. More importantly, if the plaintiff quit her job, she would no longer have insurance coverage and be ineligible for long-term disability benefits.
The court gives the legal equivalent of an eye-roll
Hartford seemed blissfully unaware of the “catch-22” analysis it insisted disqualified the plaintiff from benefits. Thankfully, the court identified this absurd logic immediately.
In a chastising opinion, the court explained that Hartford had put the plaintiff in an impossible position, given its self-serving interpretation of the policy. She could “continue working full-time and never be able to prove herself disabled under the Policy or stop working and lose coverage. Under this theory, no employee could qualify for disability and that simply cannot be how the Policy is interpreted.” The court reversed Hartford’s determination, but declined to go further, and sent the case back to Hartford for a new determination on the merits of her LTD claim. Why didn’t the court go further and approve the claim and award Plaintiff her LTD benefits?
But it’s still not over
Alas, our legal system under ERISA is full of second, third and fourth chances for insurance companies. While the court’s quick and withering rejection of Hartford’s claim denial may have seemed like a ray of hope, that hope was promptly extinguished by the court’s failure to award benefits to Plaintiff. Instead, since Hartford had not adequately considered the (obvious) facts surrounding the plaintiff’s claim, the court remanded the case back to Hartford for a new claim determination. This remand procedure is nowhere to be found in the ERISA statute or its regulations, and is completely “judge-made”–but it is standard operating procedure for the courts in ERISA litigation.
Unfortunately, when insurance companies are allowed a “second bite of the apple” to reconsider demonstrably ludicrous denials, even ones carrying the funk of a judge’s rebuke, they do not always take the hint and approve the claim. Hartford may certainly approve the plaintiff’s claim on remand, which would be an appropriate, if late, change of heart; but it’s more likely Hartford will use the court’s decision as a road map as to how to better deny the claim the second time around, and to proffer a less flimsy reason for denying benefits to the plaintiff which will withstand judicial scrutiny the next time.
If the insurance industry had a motto for ERISA, it would surely be “The gift that keeps on giving.”