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How to Read Your ERISA Disability Denial Letter: A Gritty Exploration of the Common Language in Actual Denial Letters and How to Respond to Them

If your ERISA short-term disability or long-term disability claim was denied, you likely received a dry, lengthy rejection letter explaining the basis for the denial.  This letter may appear persuasive, but insurers/claims administrators often offer improper justifications to support their denial decisions to increase their profits.  Calling an experienced ERISA attorney should be your next move.  However, if you decide to handle the matter yourself, then you must critically examine each basis relied upon to deny your claim.  You should never blindly accept what the insurance company is telling you.  Below is language we frequently see in our review of ERISA insurance denial letters, and tips on how to view and respond to them.

1. “The clinical information within your long-term disability claim file was reviewed by a Board Certified on-Staff Medical Director who concluded that your restrictions and limitations do not render you totally disabled under your policy.” 

An insurer’s review process often raises questions about its bias and accuracy.  This is because there is an inherent conflict of interest in its claims handling function:  it makes the decision as to whether to pay benefits under a policy and it is also the funding source for these payments.  Staff and peer reviewers employed by the insurer may feel pressured to overemphasize certain aspects of your medical records that would support a claim denial, and downplay other portions that support your disability claim.  Additionally, a “paper review” of your claim file – when a medical professional just looks at your medical records but does not take the time to personally examine you – tends to be less informative than a face-to-face examination.  In both cases, while your insurer is required to take active steps to ensure the decision rendered accurately reflects your condition and fully explain the basis of its decision, that often does not occur.  Finally, this medical reviewer must have appropriate expertise to assess your condition.  A Medical Director practicing internal medicine will not be qualified to review psychological conditions.  Moreover, look for what the Medical Director was provided and reviewed.  If he or she did not receive all of the important and material records necessary to render an opinion, this may be a proper basis to challenge the physician’s opinions and thus the insurer’s opinions.

If the insurance company did not properly follow all of these steps, the denial of your claim might be improper and could be overturned by a court of law.

 2. “Your asserted restrictions and limitations are not supported.”

This one appears in most denial letters as the insurer must typically make a determination that your asserted restrictions and limitations are not supported by the information in the insurer’s file.  The insurance company is not allowed to just generally state that you do not meet the definition of disability in your policy.  Rather, the insurer must give a reasonably detailed explanation of why this is so.  Very often there is scant evidence to support the insurer’s decisions in this regard.  Further, the denial letter must specify the evidence needed to perfect your claim.  See 29 C.F.R. § 2560.503-1(g)(iii).  Courts have held that a plan administrator committed a procedural error by issuing a denial without describing the additional information needed for the claim and why.  Letvinuck v. Aetna Life Ins. Co., 439 Fed. Appx. 585, 586-87 (9th Cir.  2011).  Typically, letters itemize the medical records and documents reviewed and summarize content relevant to the claim.  If the documents referenced do indeed support your restrictions and limitations and thus your claim, or if the denial letter fails to explain the additional records and information needed, the denial of long-term disability benefits may be improper.

3. “Your physician indicated you had subjective complaints of pain, but there were no further objective findings on exams or recent studies to support restrictions or limitations.”

While blood tests and X-rays can detect infections and broken bones, other disabling medical conditions such as chronic pain or mental illness often have no measureable objective symptoms.  It is not uncommon that insurer’s will use this lack of “objective” evidence to deny a long-term disability claim, even when the Plan does not specifically require that objective evidence be shown.  Luckily, courts have acknowledged that pain may be debilitating, even in the absence of supporting objective evidence.  See Saffron v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 872-73 (9th Cir. 2008).  In addition, courts have ruled that requiring a claimant to meet an additional standard that is not present in the policy is improper because it impermissibly “imposes a new requirement for coverage.”  Saffle v. Sierra Pacific Power Co., 85 F.3d 455, 459-60 (9th Cir. 1996).  Consequently, insurers cannot typically require objective evidence if your disability is not physically detectable.

4. “Covert surveillance captured numerous inconsistencies in your self-reported complaints and abilities verses observed activities of daily living and provided some insight into your functional abilities.” 

Insurers like to hire investigators to secretly follow their disabled insureds around and videotape them.  This is especially true with orthopedic injuries or sicknesses, like severe back problems.  If your insurer paid a company to obtain video surveillance of your activities, you should make sure you obtain the Administrative Record from the insurer that contains the surveillance report and you should obtain videotape.  Then carefully read all references in the report and carefully review the video footage to ensure they do not mischaracterize your abilities.  In one influential case, the insurer relied on surveillance footage of the claimant engaged in short periods of activity over four nonconsecutive days and concluded he was capable of sustaining this activity in a full time occupation.  A court criticized the insurer’s decision, explaining the insurer over-relied on footage and this bias pervaded its decision process, eventually ruling that the claimant was entitled to long-term disability benefits.  Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623 (9th Cir. Cal. 2009).  Similarly, you should question whether the insurer’s description of the video surveillance overstates your functional abilities.

Admittedly, recovering your benefits will require more than recognizing a few flaws in your denial letter.  If you suspect your ERISA benefits were improperly denied, our attorneys can offer you a free and confidential consultation.

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