Disability insurance can be incredibly important. This type of policy, offered in both short-term and long-term versions, provides benefits in the event that you are unable to work due to an illness or injury. Having disability insurance can remove the burden of financial stress at a time when you should be focusing on your health.
Yet far too often, insurance companies that sell these policies find reasons to deny claims — often wrongfully. An insurer may claim that there are no “objective findings to support your disability or that you can still perform your regular occupation. Alternatively, the insurance company may approve your initial claim, only to cease benefits after a set period of time due to limitations, such as for mental health.
Unum Group is notorious for finding reasons to deny applications for long-term disability (LTD) benefits. In 2002, California fined Unum for inappropriately denying LTD disability insurance claims. Just two years later, Unum entered into an agreement with insurance regulators in over 40 states that resulted in a reversal of 41.7% of disability claims assessed and an additional $676.2 million in benefits paid nationwide.
These actions taken by state regulatory bodies demonstrate that Unum has a history of wrongfully denying LTD applications. Unfortunately, it generally takes a pattern of behavior before a state will act against a company like Unum. For individuals whose claims have been unjustly denied, a Philadelphia long-term disability insurance attorney can file an appeal — and fight to get the coverage that you deserve.
Unum Denials of Coverage
Unum offers both private and group disability insurance plans. Private disability insurance is available for purchase by individuals, often at a higher premium, while group insurance is purchased at a discount, usually by an employer, for all eligible employees. Private disability insurance typically offers better benefits because policyholders are individually underwritten. It also often acquires private policies from other carriers, so individuals who purchased a policy years ago with one company, may now have their policy administered by Unum without any action on their part.
Regardless of what type of insurance you have, Unum may still deny your claim for long-term disability benefits. To understand how they do this, you need to first learn how a person is eligible for long-term disability coverage.
Generally, to qualify for benefits, you must be unable to work due to a covered disability. In addition, you have to miss work for a certain number of days — typically 6 months — because of that disability before the coverage will begin. This is known as the elimination period.
Like many insurance companies, Unum will come up with a variety of reasons to deny your disability claim. They may disregard the opinion of your treating physician that you are unable to work due to your disability. They may claim that your physical disability is actually a psychological issue — and then apply a 24-month limitation on benefits for mental health conditions.
Alternatively, they may just make it so difficult to file a claim, requiring more and more evidence or stonewalling you when you ask to speak to a supervisor, that you give up in frustration.
Any of these tactics may result in a denial of benefits. Courts have found that subsidiaries of Unum have engaged in “bad faith” behavior when wrongfully denying policyholders’ claims. In one case, a jury awarded a woman almost $7.7 million in damages for wrongfully denying her claim based on their assessment that she was not “totally disabled” and was able to work.
Despite these types of awards — and pending class action lawsuits against Unum and its subsidiaries — the company still engages in tactics designed to maximize its bottom line while reducing the amount of benefits that it pays out on claims. For individuals who are unable to work due to their disabilities, this often means being forced to go without the income that they need to pay bills and meet daily expenses.
How to Appeal When Unum Denies Coverage
If your application for LTD benefits from Unum was denied, you may be able to file an appeal. Like all insurance companies, Unum is required to act in good faith and to deal fairly with policyholders. If they deny a claim in bad faith — as they have been found to have done in the past — then they may be responsible for any damages suffered as a result.
After a denial, policyholders generally have a certain period of time to file an appeal. This time is set either by the policy itself, or by federal law. If an appeal is not filed in a timely fashion, then it will likely be barred — and you may lose your right to file a lawsuit.
If your appeal of a benefits denial is denied, then the next step may be to file a lawsuit. This can be based on a number of theories, including that Unum acted in bad faith. Depending on where you live, you will have to prove that the insurance company acted or failed to act in a certain way in order to win the case.
In Pennsylvania, an insurance company acts in bad faith when they (1) do not have a reasonable basis for denying benefits under a policy; and (2) knew of or recklessly disregarded the lack of a reasonable basis to deny benefits. If an insurer is found to have acted in bad faith, they may be liable for interest on the amount of claim from the date it was made, punitive damages, court costs, and attorney’s fees.
By contrast, to prove a bad faith insurance claim in New Jersey, a policyholder must show that the insurance company had no reasonable basis to deny the claim (in other words, if the claim is “fairly debatable,” there can be no bad faith). Although the New Jersey Senate has advanced a bill that would make it easier to file bad faith lawsuits against insurance companies — the New Jersey Insurance Fair Conduct Act — it has not proceeded further.
Unfortunately, if your policy is covered by ERISA — that is, your policy is offered as part of an employee benefit plan — you cannot pursue “bad faith” or other damages. Even if a court agrees that Unum acted irrationally, it can only award the benefits you would otherwise have been owed and, in some cases, attorneys’ fees. This is part of the reason why companies like Unum feel free to brazenly disregard your evidence of disability.
You Are Not Alone: A Philadelphia Disability Benefits Attorney Can Help
If you are already facing health issues, the last thing that you want to deal with is the paperwork, bureaucracy and stress of an insurance claim. Having your claim denied can be incredibly frustrating, particularly when you believe that the denial was unfair. A Philadelphia long-term disability insurance attorney can help you take on a giant insurance company, like Unum.
Bross & Frankel represents clients in Pennsylvania and New Jersey who are seeking benefits from their insurance companies. For more than 20 years, we have successfully won initial disability benefits claims, as well as appeals and lawsuits. To learn more or to schedule a free claim review, contact our office today at 856-210-3345, or online.