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An ERISA Lawyer Explains What Happens If Your Disability (LTD) Claim Is Denied or Terminated

Unfortunately, disability insurance companies will always deny or terminate a certain percentage of claims. Your long-term disability claim may be denied or terminated for a variety of reasons. Sometimes, the insurance company did not get all of your medical records. Other times, you may have a complicated or confusing diagnosis. And, sometimes, there’s no valid reason at all.

If your LTD claim has been denied or terminated, you have the right to appeal. However, ERISA sets out a strict appeal process. It is important to have an experienced ERISA lawyer by your side who can help you understand your legal rights and responsibilities before filing an appeal.

Filing An Administrative Appeal

When your group long-term disability insurance claim is denied or terminated, ERISA requires that you first file an appeal with the insurance company. This is sometimes called a “claim appeal” or “administrative appeal.” The claim appeal may be the most important part of the appeals process, due to ERISA’s strict evidentiary rules. If you don’t put in all evidence that supports your claim during this administrative appeal, you may be precluded from doing so later. Effectively, claims are won and lost at the administrative appeal stage, so no effort should be spared to fully document your right to benefits.

Review Your Denial / Termination Letter Carefully

Before filing an appeal, you must understand the reasons for the insurance company’s decision and follow ERISA’s appeal procedures. Your denial/termination letter from the insurer should include information discussing:

  • The reason for your denial or termination of benefits
  • What information may help your claim
  • How to begin the appeal process
  • The filing deadlines that apply in your appeal

You should also refer to the actual insurance policy and plan document for a more detailed understanding of the appeals process. These documents set out the specific requirements of your disability plan. If you need help understanding the policy or plan document, consult with an experienced New Jersey/New York ERISA lawyer.

Request A Copy Of Your Disability Insurance File

When your ERISA claim is denied or terminated, you should immediately request a copy of the insurance company’s file. This file should include copies of all the evidence relevant to your claim. The insurance company’s record may be large, but you (or your ERISA lawyer) must review the entire file and determine how strong or weak the insurance company’s position is. This is also essential to understanding what evidence must be added to the record to adequately support your claim on appeal.

Submit An Appeal That Stacks The Evidence In Your Favor

Next, you or your ERISA lawyer will submit an appeal before the filing deadline set out in the policy and plan document. If you do not file a claim appeal before this deadline, the insurance company’s decision will become final and you cannot later successfully challenge it in court.

Your appeal should include a detailed and fact-based written argument and evidence supporting your claim. This evidence may include:

  • Medical records,
  • Diagnostic testing reports (such as MRI, CT and EMG and reports),
  • Functional capacity evaluations,
  • Neuropsychological evaluations,
  • Vocational evidence (like job descriptions and labor market surveys),
  • Expert opinions (from medical or vocational experts), and
  • Letters from your doctors.

Again, it is important to “stack” the insurance company’s record. It is extremely difficult to submit evidence after the insurance company makes a final decision on your appeal.

The insurance company will review your appeal and issue a decision. If your appeal is granted, you will receive disability insurance benefits, retroactive to the date of the wrongful denial or termination. If your claim appeal is denied, you have “exhausted your administrative remedies” and may then file a lawsuit.

Appealing To The Federal Courts

If the insurance company upholds its denial or termination of LTD benefits, you can file a lawsuit in federal district court. Depending on your policy, the filing deadline may vary. Your policy should set out all of your policy’s filing deadlines. Do not ignore your insurance plan’s filing deadlines. Once the filing deadline has passed, you cannot pursue your disability claim in court.

Filing A Complaint

To start a federal lawsuit, you must file a complaint. A complaint is a formal court document that summarizes the key issues of your dispute. The insurance company will have an opportunity to respond to your complaint.

The insurance company also must provide you and the court with a complete copy of your claim file, which the court refers to as the “administrative record”. Typically, the federal court will not consider evidence that is not already in the administrative record.

Unlike other personal injury or disability-related claims, you will not have an in-person hearing in an ERISA appeal. Instead, the federal judge or magistrate will review written arguments from your lawyer and that of the insurance company, along with the evidence contained in the record, and make a decision based on what is already in the record.

Applying The Standard Of Review

Depending on your disability insurance plan, the federal judge will either apply a “de novo” or “arbitrary and capricious” standard of review. A standard of review dictates how much power a judge has to second-guess a claim decision by an insurance company. Sometimes, a judge can review any and all issues in a claim. Other times, their ability to review and evaluate issues is much more limited.

The “de novo” standard is applied unless there is specific language in the insurance plan that gives the plan administrator (usually the insurance company) broad discretion on claims decisions. Check your plan document for this language. De novo review allows a judge to set aside the insurance company’s decision and issue his or her own opinion. Most employees prefer the “de novo” standard of review.

If your insurance plan requires the “arbitrary and capricious” standard of review, the judge’s powers are more limited. The judge must uphold the insurance company’s decision unless it is completely unsupported by the evidence. Insurance companies prefer the “arbitrary and capricious” standard.

Once the judge has reviewed all the evidence and legal arguments, he or she will issue a decision. You have the right to appeal this decision.

Do I Need An ERISA Lawyer In An Administrative Appeal?

ERISA administrative appeals are very complicated and technical. If you fail to meet your policy’s filing deadlines, you cannot receive disability insurance benefits. Additionally, a successful appeal involves a detailed analysis of legal, medical and vocational issues. Most disabled employees hire an ERISA lawyer to help with this process.

You should not put off hiring a lawyer in a disability insurance appeal. Unlike other types of disability-related claims, it is nearly impossible to submit evidence after the first level of appeal (with the insurance company). An experienced New Jersey/New York ERISA lawyer can help you build your case and “stack” the record, and can also handle a federal court lawsuit.

Contact An Experienced ERISA Lawyer Today

If your LTD claim is denied or terminated, it is in your best interest to speak with a knowledgeable ERISA lawyer right away. Contact Uscher, Quiat, Uscher & Russo, P.C., at 201-781-5645 today or send an email.