Just How Long Can a Long Term Disability Insurer Take to Decide Your Claim?

Long term disability insurance claimants in Chicago frequently call a lawyer while their claim or appeal is pending asking what to do about how long the insurer is taking to make a decision.  Sometimes the insurer keeps asking for more and more information, it calls necessary proof of loss, which may or may not really be relevant to your claim, just to slow down the decision.  Other times, the insurer may just outright ignore the regulatory deadlines because claimants proceeding without an attorney often do not know the insurer is subject to a deadline.  So what do you do if the insurer simply will not make a decision?  Some colleagues in New Jersey recently had to address this very matter.

In Puzzo v. Metropolitan Life Insurance Co., No. 15-3190, 2016 U.S. Dist. LEXIS 40766 (D.N.J. Mar. 29, 2016), Joseph Puzzo was in a serious car accident where he suffered a traumatic brain injury.  MetLife paid Puzzo long term disability benefits under the policy through March 28, 2014, but then terminated the payments.  Puzzo appealed the decision, but  MetLife failed to issue a decision regarding Puzzo’s appeal, and after waiting more than 6 months for a decision Puzzo sued to recover the long term disability insurance benefits under ERISA § 502(a).

MetLife argued that Puzzo did not exhaust administrative remedies prior to filing the lawsuit, as courts require.  But MetLife’s failure to issue a decision rendered the administrative remedies deemed exhausted under ERISA regulations.  See 29 C.F.R. § 2560.503-1(l) (explaining a claimant is entitled to pursue any remedies under ERISA § 502(a) if the administrator does not follow a reasonable claims procedure as outlined in the regulation).  MetLife communicated to Puzzo that it received his appeal on October 31, 2014.  But MetLife would then have had to either make a decision on the appeal, or communicate that it needed one 45-day extension, by December 15, 2014.  Before that deadline, MetLife did not make a decision, request any additional information, or communicate that it needed the 45-day extension.  Instead, MetLife allowed six months to pass with no action, and Puzzo was justified in proceeding to litigation.

If you have a pending claim or appeal for long term disability insurance benefits, and question how the insurer is handling your claim, talk to a knowledgeable ERISA long term disability lawyer today.