No one expects their long term disability claim to be denied, but if this has happens to you it is important that you know how common this is. Claims adjusters routinely deny long term disability claims, and your claim being denied by your insurer does not mean that you are out of options.
When you have long-term disability (LTD) coverage through an individual or group policy, such as an employer-provided plan, you expect to receive income replacement benefits when you are unable to work due to an illness or injury. Unfortunately, LTD insurance providers sometimes deny claims for a disability that genuinely interferes with our ability to do our job. A denied LTD claim is both stressful and confusing – how do you know what action is appropriate to convince or compel your insurance company to honour your claim for disability benefits?
There are many reasons why your long-term disability claim application may have been denied or your benefits may have been unfairly discontinued. When this occurs, you have two choices if you wish to proceed with your claim: you can typically appeal the decision through the insurance company’s internal appeal process or you may commence a lawsuit against the insurer.
Insurance companies generally provide an option whereby a person may appeal the insurer’s denial of disability benefits. This process almost always requires the claimant to provide additional corroborating evidence, including medical documentation and/or medical tests. A key requirement is that your documentation proves that the specific symptoms of your condition prevent you from performing the essential aspects of your job, within the first two years of becoming disabled. After two years, you must provide evidence that you are unable to perform any occupation for which you are reasonably suited.
The internal appeal process also often requires a claimant to undergo examination by the insurer’s doctors who are, unfortunately, generally more skeptical of reported symptoms than your own physician. Also, be advised that insurers often have already made up their mind about the legitimacy of your case when they first denied your claim, so it can be difficult to reverse their decision. This means that appealed claims are also frequently denied and a claimant may find themselves going though multiple levels of appeals over many months, involving repeated letters explaining why your benefits were terminated or denied. Of course, an extended and unsuccessful appeal for LTD benefits is not only financially taxing, but also emotionally stressful and extremely frustrating for anyone, particularly for someone who is ill or injured.
A claimant may encounter a number of pitfalls during the internal appeal process, in addition to the difficulty of reversing the insurer’s original decision. One potential problem is that the insurance company’s doctor may provide a biased assessment that can hurt your case, and this assessment may be relied on even if you later decide to proceed with a lawsuit. Also, if the appeals process drags out over a long time, a claimant may miss the legal deadline for filing a civil suit after their appeal was unsuccessful.
Another potential pitfall concerns a contractual obligation under some LTD plans that forces claimants to make a choice between the appeal process and a lawsuit (with no allowance for allowing both strategies if the appeal fails). This is a scenario that was the focus of a June 2017 trial heard by the Nova Scotia Court of Appeal, Nova Scotia Association of Health Organizations Long Term Disability Plan Trust Fund v. Amirault, which involved an employee whose long-term disability claim was initially rejected by her group disability Plan administrators. Under the rules of the group Plan, if an employee’s disability claim is first rejected, they may request reconsideration of their claim based on further evidence. If this reconsideration is also not successful, a claimant has two choices – they may request a review hearing before an independent appeal board or they may take legal action, but the contract states that they cannot do both.
In this case, the claimant decided to have her claim decided by the independent appeal board. However, when the appeal was unsuccessful, the claimant sued the trustees of the plan. The Plan trustees then brought a motion for summary judgement to have the claimant’s LTD claim dismissed because it contravened the terms of the Plan. At the summary judgement trial, the claimant’s lawyer argued that the claimant, Ms. Amirault, did not know what she was signing when she elected to appeal before the appeal board and also, that there was an unequal bargaining position between the claimant and trustees of the plan. The motions judge found that there was some evidence that the claimant “may have not understood at least one of the documents that she signed” and accordingly, the judge rejected the trustees’ motion to have the claimant’s lawsuit dismissed.
The trustees of the Plan subsequently appealed the motion judge’s decision in the 2017 trial, on the basis that: a) there was no evidence presented that gave rise to a dispute of material fact (i.e. facts that affect the ultimate decision); and b) no question of law arose from any of the claimant’s legal arguments. The Court of Appeal examined the evidence, including written communications between the Plan administrators and the claimant, and decided that there was no evidence that the claimant may have not understood any of the documents she signed and therefore, the Court found that the trial judge was incorrect in his conclusion. The Appeal Court found that the claimant had provided no evidence to support her allegation that she was confused about her rights or that she wasn’t aware that the appeal precluded a lawsuit. Also, she never pleaded that her decision to appeal via the appeal board was invalid. Further, she signed a written document, with witnesses, agreeing that she could not commence court proceedings if her appeal before the LTD Plan Appeal Board was denied. On the question of law for this case, the Appeal Court asserted that the Plan was not a negotiable contract for the claimant; rather, it was negotiated by her employer and employee representatives and all employees are subject to the rules and benefits under the plan. The Court of Appeal found that the summary judgement motion to dismiss the claimant’s case should have been granted.
If your long-term disability benefits were terminated or your disability claim was denied, talk to a competent disability claims lawyer to ensure that you have chosen the strategy for obtaining LTD benefits that provides your best chance of success. At Kotak Personal Injury Law/Disability Lawyers, our knowledgeable and experienced staff can advise you on your legal rights, given your condition and the legal requirements of your disability plan. We can properly assess what evidence and legal position will result in a successful claim for benefits. It’s a good idea to call Kotak Personal Injury Law/Disability Lawyers before taking any other steps, such as the internal appeal process, that may place a greater financial burden on you and your family, particularly if the appeal drags out and is again denied.