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Long-Term Disability Benefits Archives

UNUM consents to $15,000,000 fine and process to correct denied claims back to 1997

On September 2, 2003, a group of state insurance regulators formed a multistate examination to determine if the individual and group long term disability income claim handling practices of UNUM reflected "systemic unfair claim settlement practices" as defined in the Unfair Methods of Competition and Unfair Deceptive Acts and Practices in the Business of Insurance Model Act (1972) or NAIC Claims Settlement Practices Model Act (1990) pursuant to the procedures established by the NAIC Market Conduct Examiner's Handbook.  Contemporaneously with the Multistate Examination, the United States Department of Labor (DOL) was conducting an investigation of UNUM pursuant to Section 504 of ERISA.

Sufferers of CFS or Fibromyalgia Cannot Be Denied Their Long-Term Disability Benefits by an Insurer Without a Specialist

In a recent court decision, the Long-Term Disability Insurer put great weight in the suggestion that letters by the disabled woman's doctor were "contradictory".  The Insurer argued that the doctor's first letter diagnosed Chronic Fatigue Syndrome as the cause of the Claimant's ailments, but in her second letter the doctor suggested her chronic fatigue was caused by sinusitis. 

People Denied Long-Term Disability Benefits Need Make-Whole Remedies

The Employee Retirement Income Security Act of 1974 (ERISA) currently provides a person who has been improperly denied long-term disability benefits, remedies that include reinstatement to the LTD plan, payment of past due benefits, interest, and attorney fees.  ERISA remedies do not currently allow the disabled person to recover the additional damages suffered as a consequence of the benefit denial.  Such damages may include damage to credit rating, loss of a home, tax liability, loan interest, and other harms that result directly from the improper denial of disability benefits. Justice Ruth Bader Ginsburg has recently joined, "the rising judicial chorus urging that Congress and [this] Court revisit what is an unjust and increasingly tangled ERISA regime."  Because the Court has had a cramped construction of the "equitable relief" allowable under ERISA, a "regulatory vacuum" exists.  A series of the Court's decisions has yielded a host of situations in which persons adversely affected by ERISA-proscribed wrongdoing cannot gain make-whole relief.  There is a stark absence, in ERISA itself and in its legislative history, of any reference to an intention to authorize the recovery of extracontractual damages for consequential injuries.  Most recently, the Court ruled that, as " ERISA, by its terms, only allows for equitable relief," the provision excludes "the imposition of personal liability ... for a contractual obligation to pay money." 

Disability Insurers Must Now Feel Your Pain

What about the unfortunate employee who is covered by a disability policy but can't satisfy the insurer's demand for objective proof?  Claims for disability benefits made by people who suffer from chronic pain and fatigue syndromes are often denied for lack of objective medical evidence.  Because chronic fatigue syndrome and fibromyalgia cannot be verified by objective medical tests, these conditions pose a challenge for long-term disability benefits law.  This problem is being fixed in our federal courts under the Employee Retirement Income Security Act of 1974 (ERISA).  ERISA protects employees who have been improperly denied their long-term disability benefits.

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