Is “Claim Exhaustion” Required in Long-Term Disability Claims?

There’s a lot on the line for those seeking long-term disability. Unfortunately, far too many claimants are unfairly denied benefits as a result of the insurance carrier putting their profits over people. If you’ve received a denial for your long-term disability claim, you have the right to file an appeal. However, you must follow the requirements for your appeal carefully. One simple mistake could ruin your chances of receiving this much-needed benefit. In fact, many claimants turn to an experienced Chicago disability insurance attorney for help with their initial claim or their appeal. If your appeal fails, you do have a potential remedy through the court system. 

Internal Appeals Required by the Courts

While ERISA doesn’t explicitly require claimants to exhaust their administrative remedies before filing suit, it’s a court-established doctrine. ERISA even mentions a “full and fair review” of adverse benefit determinations for health, life, disability, accidental, and other employer-sponsored benefits. Just like other plan requirements, if your plan requires you to exhaust your administrative remedies before turning to the courts for help, you must do so. In other words, long-term disability claims do require exhaustion. In these circumstances, failure to pursue an internal appeal when it’s required will likely leave you with no chance of receiving your long-term disability benefits.

Exceptions to Claim Exhaustion

The court does allow a few exemptions to the exhaustion requirement. Generally, courts allow exemptions under two circumstances:

• If the procedures are inadequate
• If the appeal is futile

However, it’s the plan participant or their Chicago disability insurance lawyer on their behalf that must prove that one of these exceptions applies.

Inadequate Internal Procedures

This court exemption refers to the plan’s internal claims handling procedures providing an insufficient remedy for the claim. It’s the claimant’s burden to establish that the procedures followed by the claims administrator weren’t in compliance with ERISA or its implementing regulations. More specifically, the claimant needs to show how the administrator’s conduct or the plan’s terms violate ERISA. Proving a minor mistake won’t suffice. 

Futility

On the other hand, the futility exemption applies if turning to the plan’s internal, administrative remedies would be futile, useless, or otherwise “doomed to fail.” Historically, the courts have examined three factors to determine if the futility exemption should be allowed:

• If the definitions for “fully disabled” for purposes of short term disability (STD) and long-term disability (LTD) benefits are considerably the same
• If the plans are integrated— relying on and referring to each other
• If the denial or termination of STD benefits precludes the approval of any LTD claim
• If the same entity administers both plans

Questions about Claim Appeals or Exhaustion? Call a Seasoned Chicago Disability Insurance Attorney Today

At Bartolic Law, our seasoned Chicago disability insurance lawyers know how confusing and daunting long-term disability claims can be. At the appeal stage, it’s imperative that everything is done correctly in accordance with the law and the terms of the plan. With an attorney on your side, you can ensure that you have the best chances of receiving your benefits through an appeal or going to court if necessary. Contact our office today to schedule your complimentary case consultation and learn more about how we can help with your claim.