What to Do When Long-Term Disability Insurer Seeks Extension of 45-day Deadline

Employees in Chicago who appeal a long-term disability insurance denial under a group policy enforced under ERISA § 502(a) almost always get the dreaded letter around 45 days later in which the insurer says it needs an extension to decide the appeal. Here are best practices when this happens.

Take a Picture of the Postmark on the Envelope

Often insurers date letters on one day, but do not send it out until days later. After the adjuster writes the letter, it can take 1–4 days for the insurer’s mailroom to send it out. Photograph the postmark as evidence when the insurer sent the letter. Just saying when you received is likely not enough.

Ask Why the Insurer Needs the Extension

If the insurer says it is taking an extension, ask why. Often the insurers give vague answers or explanations, like they need it to complete a medical review. Depending on the insurer, it may utilize its own employed doctors, or hire a vendor that subcontracts the doctor to do the review.

Consider If You Should Immediately File a Lawsuit

The ERISA claim procedure regulation gives a long-term disability insurer 45 days to review the claim, and up to one 45-day extension if “special circumstances” require an extension to process the claim. 29 C.F.R. § 2560.503-1(i). Few cases have defined exactly what “special circumstances” are. In Bustetter v. Standard Insurance Co., No. 18-1, 2021 WL 1198305 (E.D. Ky. Mar. 29, 2021), Standard sent Bustetter a letter on day 44 (but not postmarked until day 47) of its review stating it needed the extension “due to time required to complete the medical review.” The court explained needing additional time for a doctor’s review is not a “special circumstance,” and ordered Standard’s discretion forfeited.

There is still an unresolved split among courts as to whether you must get your lawsuit on file before the insurer issues a late decision, though. If an insurer sent you a letter taking an extension to decide your appeal, you may want to file an immediate lawsuit. Call a knowledgeable ERISA long term disability lawyer before it’s too late.