Years ago, the United States Supreme Court decided a case that allowed insurance companies to have "discretion" to deny benefits for long-term, ERISA disability plans sponsored by employers. This decision has difficult consequences for people who hold these policies, because disability insurance companies include this in virtually every policy. If you read your policy plan carefully, you'll likely see the phrase "we have discretion to determine benefits."
You need to recognize that these are dangerous words.
This "discretionary clause" often causes big problems for people applying for benefits, especially if their claim has been denied and they end up having to fight the insurance company. Because the insurance companies essentially have codified backing to deny your claim if they deem the denial "reasonable."
Basically, the Supreme Court’s ruling gave insurance companies the power to add this clause into their own policies, which in essence, makes their decisions difficult for a federal judge to overturn them. They just have to show their decision denying your appeal was "reasonable."
If you've been denied benefits or they were terminated by the insurance company, your next step is to appeal that denial to the insurance company (this is required before filing a lawsuit). And that appeal is where you need to focus everything - this is not just a form you fill out or a letter you write - you are creating evidence and arguments that, if you lose the appeal, will be the basis for the judge's decision in your case.
You need to keep in mind that this is not a fair fight with the insurance company.
The law favors them and they write the disability insurance policy, create all it's terms and definitions.
When you get a denial letter from the insurance company indicating why they denied or terminated your benefits and saying how long you have to appeal (for ERISA plans that is 180 days) you're facing a heavy burden because that is where the case will be won or lost. It is your obligation to obtain, review and analyze the entire claim file (usually many hundreds of pages), create and gather the additional evidence, medical support, expert analysis, additional testing, you need and formulate and draft the detailed arguments.
That's what we do.
This discretionary clause is not required by the law and unfortunately, many employers do not understand the impact it has on their employees. If your claim has been denied, your employer won't be able to help you. You should call an attorney right away.
Have you received a letter from your disability insurance company saying your benefits have been denied or terminated?
Give us a call at 202-393-3320 to discuss your legal options. We can both review your denial letter and give you specific advice on what to do next. Send us your denial letter today to Brooke Birkey, Director of Client Services but don't wait - you probably have less than 180 days to appeal, and you have a lot of work to do.