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Michigan Long Term Disability Insurance Lawyer Blog

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The Standard Insurance Company recently agreed to reverse its decision to deny LTD benefits to a client of the firm who had ongoing and persistent back problems. The Standard denied the claim ostensibly because “the medical records do not provide substantiation of a significant Physical or Mental Disease process which would render you Disabled.”

The client subsequently underwent a “Right-sided PLIF L5-S1 with Thompson cage, local bone, Vitoss, bone marrow aspirate right-sided transpedicular nerve root decompression L5 and S1, bilateral fusion L5-S1 with mantis instrumentation.” Even after the surgical records were provided by the client the Standard maintained its denial. The client then hired SMDA to pursue her final (and voluntary) appeal.

SMDA filed an administrative appeal of the denial decision and provided additional documentation further establishing the clients inability to perform her own occupation. Key among this was a more detailed explanation of her condition provided by the attending orthopedic surgeon who actually performed the extensive back surgery.

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SMDA was fortunate enough to receive another favorable decision from the federal court finding that the Long Term Disability insurer again wrongfully denied our client’s claim for benefits.

In Deloach v. The Great Atlantic & Pacific Tea Company (A&P) the Judge reversed the claims denial decision finding that the client was disabled as a result of his medical condition. The Court rejected the Defendant’s request to review the case utilizing a discretionary standard of review. Instead, the Court agreed with our argument that the plan documents failed to properly assign any discretionary authority to the entity that actually made the claims denial decision. (Cigna) This is a prime example of why obtaining the proper standard of review is absolutely critical in a case for ERISA governed LTD benefits.

This is the second time this matter has been litigated as the Defendant’s initially denied the claim during the “own occupation” benefit period. SMDA had previously brought suit and convinced the Court to reinstate benefits. The Court ordered a remand for consideration of benefits during the “any occupation period.” This second suit was instituted when the claim for “any occupation benefits” was denied.

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SMDA was hired by an employee of ArvinMeritor when her claim for Short Term Disability benefits was rejected. The client had suffered a fractured coccyx in a slip and fall and overtime was eventually diagnosed with Fibromyalgia and Depression. Despite the universal support of each of her treating physicians her employer rejected her claim for benefits upon the recommendation of the third party disability benefits administrator, Cigna.

After SMDA filed suit the case was submitted to private arbitration with a retired Circuit court judge. The Judge agreed with our argument to apply a De Novo standard of review because of the manner in which the claim was handled which was critical:

Because the Plan does not authorize the delegation of the Plan Administrator’s discretionary authority, LINA’s determinations with respect to Claimant’s claim for benefits under the STD provisions of the Plan are subject to de novo review.

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I came across this recent article by the Onion satirizing Long Term Disability insurer giant, Cigna. WARNING-STRONG LANGUAGE, NOT APPROPRIATE FOR ALL. The article takes a satirical poke at CIGNA for failing to treat its insureds fairly. While the article is obviously based upon the Onion’s imagination it will likely strike a chord with anyone who has been put through the arduous LTD claims process or had their claim denied from some apparently bogus reason.

I have to say that I get more calls about CIGNA denials than almost all the other LTD insurance companies combined. I also have personally represented a number of clients where the claims denial rationale leaves me scratching my head. Bad claims decisions make good cases. Unfortunately, the client/insured is the one who pays the price while struggling to make ends meet until the claims denial can be reversed.

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In another recent SMDA victory, the Federal Court overturned Metropolitan Life Insurance Company’s decision improperly under-calculating the claimants LTD benefits. In Gray v. Metlife the Court found that Metlife had wrongfully excluded the claimants “Health and Welfare” pay from his “base monthly earnings.”

The Court determined that the ERISA claim should be reviewed De Novo since the policy was amended after March 1, 2007 when the State of Michigan banned the use of discretionary clauses. This is one in a number of cases confirming this important issue.

Reviewing the policy language the Court found:

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SMDA filed a lawsuit against Liberty Life Assurance Company of Boston (LLAC) after it denied a claim for LTD benefits filed by an employee of DTE energy who had significant orthopedic back problems. The claim was governed by ERISA since it was a group plan provided through the employer. Despite the fact that the client submitted significant documentation of her back problems including multiple objective tests (x-ray and MRI’s) demonstrating the source of her back pain LLAC denied her claim based on several paper reviews performed by doctors hired through an expert witness service frequently used by the insurance company.

The Court rejected the insurer’s argument that the client had failed to provide objective evidence of her claim noting that pain is subjective and not susceptible to measurement and there was ample objective evidence of her medical condition which is likely to result in pain.

The Court utilized a De Novo standard of review rejecting Defendant’s argument that the Michigan ban on discretionary clauses was inapplicable. A link to the decision can be found here.This case provides a good example of the importance of creating a good administrative record for the Court’s review. The judge ordered LLAC to pay all of the past due benefits plus interest, costs and attorney fees.

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SMDA received a favorable decision overturning Mutual of Omaha’s decision to terminate our client’s short term disability benefits. The firm represented a casino dealer who developed severe psoriasis of the hands as well as depression and anxiety stemming from her witnessing a gambler commit suicide by shooting himself at her table.

She filed a claim for benefits which was initially approved. Mutual of Omaha obtained a paper review of her file and terminated her benefits despite the in-house reviewers request that the Insurer obtain her prescription records.

The Court reversed the denial decision utilizing a De Novo standard of review finding that the client was in fact disabled and criticizing the Insurer for failing to obtain a medical examination while questioning the credibility of the claimant and her treating physicians. Gray v Mutual of Omaha, Case No. 11-15016 (ED Mich)

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The administrative record is simply all of the documents provided to the LTD insurance company during the claims process, the claims file, the documents provided during the administrative appeal and the contract documents.

One of the little known but critical rules in ERISA Long Term Disability cases is that the Court will only consider the documents contained in the administrative record. Accordingly, it is extremely important that the insurer be provided all favorable information during the administrative appeal process. Otherwise, the claimants chances of winning in court can be very slim.

SMDA has had a couple of recent examples of the importance of this fact. We recently represented a client who filed her own administrative appeal by simply writing a letter explaining to the LTD insurer why she believed the claims denial decision was erroneous. Also contained in the record was a form completed by her primary care physician that indicated she needed a functional capacity examination in order to determine if she was disabled. The client was not aware of her doctor’s opinion and took no steps to provide the information suggested necessary by her own doctor.

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Our client went off work due to the progression of her Meniere’s disease.

She went back to work part-time and struggled to work five-hour days. She was scheduled to return to work full-time in November but was unable to do so due to her medical condition. She did gradually increase her hours but was never able to return to full-time work. She became completely unable to work the following March due to her Meniere’s disease and migraines.

When the LTD insurance company denied her appeal SMDA filed suit. During a court ordered facilitation a confidential settlement was reached.
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Long Term Disability Insurers love to use surveillance to find a way to terminate benefits. Think about it it from a business perspective. They can hire a private investigator and pay them $500 or a $1000 dollars to follow a claimant around for a few days and maybe save tens or hundreds of thousands of dollars if they can just get something on tape that they can use to terminate the claim. This is the story of one such claim.

SMDA was hired by Mr. S who last worked as a senior programmer for EDS when his significant and progressive back problems stopped him from working. He had been diagnosed with lumbar post laminectomy syndrome with lumbar radiculopathy, lumbar spondylosis with low back pain and lower extremity pain. As a result, he had severe low back pain with aching, shooting, sharp, and throbbing pain with numbness, tingling, burning and stiffness on a daily basis. Objective testing including multiple MRI’s and EMGs have confirmed his significant deficits. The LTD Insurer originally approved his claim and paid his LTD benefits for years.

Despite the overwhelming medical evidence demonstrating his progressive disability, the LTD Insurer hired a private investigator to follow Mr. S around. During the first several days the private investigator saw nothing but the outside of the client’s house. The last day, Ms. S left the house and went to Walmart. The videotape shows Mr. S slowly getting out of his car and walking into the store leaning heavily on both his cane and then the grocery cart. The private investigator followed him into Walmart and up and down several aisles as he surreptitiously videotaped Mr. S. The video shows Mr. S picking up and looking at several items each of which weigh less than 2 pounds, leaning on his shopping cart and going through the check-out.
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