Long Term Disability Law Blog
An Illinois disability attorney recently filed a lawsuit against the Life Insurance Company of North America (LINA) at the District Court for the Northern District of Illinois. In Deborah Shepherd Vs. Life Insurance Company Of North America, A Cigna Company, the plaintiff Deborah Shepherd alleged that LINA acted with specific bias and contrary to the fiduciary duties owed to the Plaintiff by denying her claim for long term disability LTD benefits and is seeking remedies through the Court. Let’s have a closer look at the case.
The Nature of the Complaint: – Illinois disability attorney filed Lawsuit Against Cigna under ERISA
Under the Employee Retirement Income Security Act of 1974 (ERISA), provisions are made for the district courts to have jurisdiction to hear civil actions brought to recover disability benefits due under the terms of an employee welfare benefit plan. The plaintiff in this case was working as a District Sales Manager for Yellow Book USA. While working with Yellow Book USA, she participated in a group LTD insurance policy underwritten and administered by LINA for the benefit of employees of Yellow Book USA.
The policy provides for the payment of disability benefits if the insured became disabled. Under the terms of the policy, disabled is defined as:
- An employee is Disabled if, because of Injury or Sickness,
- He or she is unable to perform all the material duties of his or her regular occupation, and solely due to Injury or Sickness, he or she is unable to earn more than 80% of his or her Indexed Covered Earnings from working in his or her regular occupation; and
- After Disability Benefits have been payable for 24 months, he or she is unable to perform all the material duties of any occupation for which he or she may reasonably become qualified based on education, training or experience, and solely due to Injury or Sickness, he or she is unable to earn more than 80% of his or Indexed Covered Earnings.
The Claim for disability Benefits
On June 2004, the plaintiff had to stop working due to the symptoms of her suffering from rheumatoid arthritis, ulcerative colitis, osteoarthritis, and fibromyalgia. Consequently, she filed a claim for disability benefits with LINA.
The plaintiff’s medical condition and the resulting limitations of her medical conditions were acknowledged by LINA and she was awarded short term disability (STD) benefits which later transitioned into LTD benefits after the LTD Policy’s benefit waiting period was satisfied. On February 9th 2005, the plaintiff was informed by LINA that her disability application for Long term disability benefits was approved without any reservation.
However, on February 9th 2007, the plaintiff was informed by LINA that it was terminating her LTD benefits. In the lawsuit, it was alleged that the termination was effected even though the plaintiff was just approved for Social Security disability insurance benefits by an administrative law judge duly appointed by the Social Security Administration (SSA). The SSA acknowledged the plaintiff’s inability to engage in “any substantial gainful activity.”
Repeated Denial of LTD benefits by LINA
Upon appeal, the plaintiff managed to get LINA to reinstate her LTD benefits. However, on August 17th 2010, LINA terminated the plaintiff’s LTD benefits again. It is interesting to note that just a week later on August 24th 2010; the SSA reaffirmed the plaintiff’s continued eligibility for Social Security disability benefits.
On February 8th 2011, the plaintiff through her Illinois disability attorney submitted an appeal to LINA’s decision to terminate her LTD benefits. To support her appeal, the plaintiff submitted substantial additional medical evidence and documentations as well as both the findings made by the SSA which proved her inability to return to work. The plaintiff also stipulated in her appeal that her functional restrictions and limitations remained the same since LINA and the SSA approved her claims for disability benefits. Nevertheless, LINA informed the plaintiff on March 29th 2011 that it was reaffirming its decision to deny the plaintiff her claim for LTD benefits.
In the lawsuit, the plaintiff alleged that she was informed and believed that LINA’s action to deny her claim for LTD benefits was in furtherance of an effort to target Yellow Book USA employees who had been receiving disability benefits. The plaintiff also alleged that LINA’s repeated efforts to deny her claim for LTD benefits was a concerted effort on LINA’s part to eliminate her benefit payments.
As such, the plaintiff argued that LINA was acting in furtherance of an inherent structural conflict of interest in its dual roles as claim administrator and as a payer of claims. The plaintiff also alleged that LINA acted with specific bias and contrary to the fiduciary duties owed to the plaintiff and to other plan participants under ERISA and as well as a duty to provide plan participants a full and fair review employing “higher-than-marketplace quality standards.” as established by MetLife v. Glenn (2008).
Relief Sought by the Plaintiff
Having exhausted all her administrative remedies, the plaintiff is now seeking the following relief from the Court:
- An order for LINA to pay LTD benefits to the plaintiff in an amount equal to the contractual amount of benefits to which she is entitled.
- An order for LINA to pay the plaintiff prejudgment interest at a rate of 9% per annum on all benefits that have accrued prior to the date of judgment in accordance with the provisions under ERISA.
- An order for LINA to continue paying the plaintiff benefits so long as she continues to meet the policy’s terms and conditions.
- An Award attorney’s fees pursuant to 29 U.S.C. § 1132(g) and ERISA § 502(g).
- Any other relief which she may be entitled, as well as the costs of the lawsuit.