Appealing the Denial of a Claim
If your claim for LTD benefits is denied, you have the right to apply that decision. How you appeal the denial of a claim depends on whether you get your policy from an insurance company or through an employer.
Individual LTD Plans
These plans are not governed by ERISA, but are usually governed by state law. Usually, you don’t have to file an appeal before you file a lawsuit. Juries can make the decision on your case, and insurers face the possibility of significant damages beyond the benefits owed if a jury finds the insurance company acted in bad faith.
Employer LTD Plans
Employer LTD plans (even if you pay some or all the premiums) are usually governed by a federal law, called the Employee Retirement Income Security Act (ERISA). Two common exceptions:
- Government employees (federal, state, county, city, and possibly quasi-government entities like the Federal Reserve)
- Religious organization employees
ERISA protects employees who have certain benefits through their employers. ERISA also has specific rules you and the insurance company must follow. If you do not follow the rules, you may lose valuable rights. Here are some tips for filing an ERISA appeal, which is mandatory.
- Submit your appeal letter by the deadline in the denial letter (usually 180 days, or shorter, in certain cases)
- Request a copy of your claim file immediately, in writing, from the insurance company.
- ERISA appeals are like pre-legal proceedings and require specific medical and work evidence to be presented. The insurance company may share evidence why you shouldn’t qualify for benefits. You have the ability to provide evidence to rebut that information. The appeal may be your last opportunity to include information in your record in case you have to file a lawsuit against the insurance company. Consider hiring an attorney to help with the appeal. See our Quick Guide to Legal Assistance.
A challenge for employees that have LTD plans under ERISA is that if your claim is denied and you file a lawsuit, there can be limited discovery and a judge decides if you have a disability. Also, you can only sue the employer for the amount of benefits you are owed and maybe some attorneys’ fees. You cannot ask for punitive damages, which means that there are no consequences for insurance companies who are acting in “bad faith.
If the Appeal is Denied
- Consider hiring an attorney. You can look for someone who offers free consultations. Some attorneys will offer to work on a contingency fee basis, others will charge an hourly fee.
- Contact your state’s insurance agency, see TriageCancer.org/StateResources. If your claim is governed by ERISA, they likely will not be able to help.
- Consider filing a lawsuit. Before doing so, ask your insurance company for the claim file again.