Long-Term Disability Insurers Must Show You New Evidence Before Denying Your Claim

Employees in Chicago with claims for long-term disability benefits often worry their claims will be denied, or terminated even after approved. Many ask if it is enough that they complete the claim forms and their doctors certify the disability. Sometimes that is sufficient for a claim approval, and sometimes it is not. Sometimes the insurer consultants its own medical professional to question your doctor’s restrictions and limitations. This can be an internal medical director working directly for the insurance company, or even an outside doctor hired through a vendor. But an insurer cannot rely on such an opinion to take an adverse position on your claim without showing it to you first and giving you an opportunity to review and comment under 29 C.F.R. § 2560.503-1(h)(4)(i). When an insurer fails to do so, it can work in your favor, as demonstrated by a recent case.

In Caudill v. The Hartford Life & Accident Insurance Co., No. 1:19-cv-963, 2023 WL 2306666 (S.D. Ohio Mar. 1, 2023), Caudill claims long-term disability insurance benefits and Hartford approved the claim. Then in 2019, it abruptly terminated his benefits based on a medical review it obtained opining Caudill could perform sedentary work. But Hartford did not provide Caudill a copy of the report before terminating his benefits. In addition, the medical report ignored many favorable pieces of evidence in Caudill’s file, such as a functional capacity evaluation showing Caudill could not perform sedentary work. Caudill sued under ERISA § 502(a).

The United States District Court for the Southern District of Ohio ruled in Caudill’s favor and against Hartford. It held because the 2019 benefit termination succeeded the 2018 amendment to claims procedure regulations requiring insurers to provide new evidence to claimants before terminating benefits, Hartford failed to comply with ERISA. The court also held Hartford’s decision was arbitrary and capricious for ignoring the evidence favorable to Caudill in relying on the medical report it never shared with Caudill. Because Caudill was on claim before Hartford terminated benefits by failing to comply with ERISA, the court ordered Hartford to retroactively reinstate Caudill’s claim and pay him back benefits.

If your claim for long-term disability benefits has been denied or terminated, don’t waste any time. Call a skilled ERISA long-term disability attorney right away to protect yourself from the insurer violating ERISA.