When it comes to long term disability insurance, claims often end in denial by companies such as Lincoln National Life Insurance Company. This leaves disabled policyholders with few options for moving on with their lives. But a recent case out of Oklahoma Federal Court is a reminder that victory is entirely possible for the claimant.
Disability insurance lawyer Greg Dell and attorney Alexander Palamara from the Dell & Schaefer law firm explain how this particular denied disability claim form Liberty National was reversed in court.
Liberty National is quickly becoming one of the larger disability companies, notes Greg Dell. It is easing toward the top five due to its recent acquisition of the Liberty Mutual disability division, which brought with them a sizeable block of short – and long-term disability policies. This particular case in Oklahoma revolved around a clause in the policy allowing a “change in definition of policy.”
The female policyholder worked for many years as a radiologic technologist in a hospital. After a disabling event, she had to make a claim in 2011 on her long term disability insurance policy with Liberty National. She initially received a disability insurance claim denial and consequently filed an appeal. The claim was then approved, leading to a 36-month period during which she received disability payments.
Change in Definition
However, like most long term disability insurance policies, hers had what’s known as a “change in definition of disability.” Essentially, explains Alex Palamara, this means that after a certain amount of time, what it means to be disabled changes. This particular policy had a 36-month change in definition of disability, so Liberty National did what insurance companies typically do: brought in a doctor whose review stated that she was capable of performing sedentary work.
Unfortunately, the doctor never even did an independent exam. Liberty National instead relied on an “independent physician or consultant review” in which they basically just reviewed medical records. The policyholder filed her own appeal, gave some basic arguments, and the appeal was denied. For this denial, they relied on a second doctor review as well as a skills analysis, which led to the determination that she could indeed perform some types of work. By the time the disabled claimant filed a third appeal, she had added extra doctor support, a functional capacity evaluation (FCE), MRI records and proof of osteoarthritis, spine and back conditions.
“Her doctor was supportive of her claim”, explained Alex Palamara, “essentially stating that, while she could maybe sit six hours a day, she suffers from a lot of pain. It’s going to cognitively affect her ability to work. She’s going to miss many days per month. A few days per week each time if she tries to work 40 hours per week.”
But it didn’t end there. After another consultant review, the insurance company once again upheld the decision to deny the claim – which ultimately led to the claimant filing the lawsuit in Oklahoma Federal Court. The good news is that the judge ruled favorably for the claimant.
Factors in Lawsuit Outcome
This positive ruling for the claimant happened for several reasons, according to disability attorney Alex Palamara.
· This particular policy did not contain what’s known as a “discretionary clause.” Most policies these days contain that clause, giving more strength to the insurance companies to interpret the policy and then approve or deny claims for benefits.
· Since the policy did not have a discretionary clause, the judge was able to review the case “de novo.” In other words, the judge is allowed to review it as if it were the first time the claim is being reviewed.
· The claimant had already been approved for Social Security disability benefits, which is not easy to accomplish. SSDI has a heavy denial rate, so when Liberty Mutual failed to review the policyholder’s SSDI approval, it showed a lack of earnestness and proper procedure on their part.
The policyholder is now back on claim, but attorney Greg Dell notes that it’s not necessarily the end of the case. “Unfortunately, it doesn’t mean that everything is going to end well,” he stresses, “because Lincoln can still do it another review in the future and to deny this case again. But for the time being, she remains on claim.”
Anyone who has a claim with Lincoln National, Liberty Mutual or any of the disability insurance companies can contact the lawyers at Dell & Schaefer for help. They work with clients anywhere in the country and handle denied claims, appeals, ERISA lawsuits and any issues related to long-term disability (LTD) policies. Each disability insurance attorney offers a free initial phone consultation; just reach out by phone or through the email contact form on the company website.