When you’re denied long-term disability benefits, you have to go through the administrative review process before going to court. What that means is you have to file appeals directly with the insurance company and be denied at all levels of those required appeals before you can go to court.
When you go to court, the court applies, most typically, a six-step review process in evaluating long-term disability claims. For example, here in the 11th Circuit, there is a six-step process, the most important of which are the first three. When you look through the first three steps, you’re going to see why it is so difficult to win a long-term disability claim.
The court has to apply the de novo standard to determine whether the claim an administrator’s benefits-denial decision was wrong. In other words, the court has to determine whether they disagree with the administrator’s decision. If the court agrees that you’re not disabled, then that’s pretty much the end of the case. However, if the court disagrees with the insurance company’s decision, if the court thinks you’re disabled, then that’s still just Step 1 and the fight is not over, which most people have a difficult time understanding. If the court disagrees with the insurance company’s decision on this de novo review, then they move on to Step 2 of the six-step process.
If the administrator’s decision is, in fact, “de novo wrong,” then the court must determine whether the administrator was vested with discretion in reviewing claims. So what does it mean to be “vested with discretion”?
Under most policies, an insurance company has discretionary authority to determine whether and to what extent, eligible employees and beneficiaries are entitled to benefits, and to construe any disputed or doubtful terms of the policy. That means they get to determine for themselves whether or not you’re disabled under the policy. The insurance company is the one that makes the very decision. I can guarantee you that most policies have discretionary language these days, which means that the case then moves on to Step 3. Step 3 is the most difficult step in a long-term disability claim.
If the administrator’s decision is “de novo wrong” and he was vested with discretion in reviewing claims, then the court must determine whether reasonable grounds supported the decision. In other words, review the decision under the more deferential arbitrary and capricious standard. This is where most cases are lost. As long as the insurance company can show any reasonable basis, then the court will allow them to win the case.
Reasonableness may be that they sent your file for review by one of their doctors who indicated that you don’t have enough limitations to be disabled, and they relied on that. It was reasonable for them to rely on that. Another example would be if there was conflicting evidence in the file, such as surveillance video that shows that maybe your daily activities aren’t as limited as they are made out to be in the medical records. A court may say it was reasonable to review that surveillance, determine that the symptoms aren’t as bad as represented in the medical records, and it was reasonable for the insurance company to deny the claim.
What I’m trying to point out to you is that even if you show at Step 1 that, under a de novo fresh look at the case, that you are disabled, and even if the court agrees with that, you can still be denied at Step 3, where the court says, “But, they had enough evidence and it was reasonable enough for them to deny your claim.”
This is why it’s so hard to win LTD claims. But our goal is, even in this structure that’s stacked very heavily against the claimant, to prove our client’s cases and get them awarded benefits.
If you’d like to talk to an experienced attorney, then please give our office a call at (888) 321-8131. We look forward to hearing from you.