The Claims Process for a Long Term Disability Claim

How Long Will It Take? When must a decision be made on whether benefits will be paid on a long term disability claim? When you are in need of benefits, it seems the decision takes much too long. Fortunately, there are rules for the length of time it takes to decide a claim. The latest rules are found at 29 C.F.R. § 2560.503-1 which sets out time periods for the plan administrator or the decision maker to decide the claim. This regulation has the force and effect of law as Congress has authorized the Secretary of the Department of Labor to issue this regulation. I will briefly take you through the process since the regulation is somewhat complicated.

I. Filing the Claim

The first step in the claim process is to file a claim. According to subsection (e) of the above regulation, a claim is a request for disability benefits made by a claimant which complies with a plan’s reasonable procedures for filing the claim. In other words, to make a disability claim you must read the summary plan description, the benefit booklet that summarizes the plan coverage, and find out the procedures for filing the claim and then follow those procedures. There may be time limits to file the claim in the summary plan description. If the procedures are unreasonable then you should still try to comply with them, but note the unreasonableness of the procedures in your claim. The reasonable portion of the procedures should be followed to avoid problems and a potential claim denial for not properly filing the claim. If you don’t have a summary plan description, ask the plan administrator, the employer and the insurance provider for a copy. Make sure your request is in writing.

II. The Initial Decision - 45 to 105 Days

Once the claim is received by the plan administrator, or the decision maker, the plan has 45 days to make a decision according to subsection (f) of the regulations. If additional time is needed, the plan can notify you in writing that it needs an extension of 30 days, but it must do this before the end of the 45 day time period. The reason stated must involve a matter beyond the plan administrator’s control. A second 30 day extension may likewise be obtained if the plan again notifies you that it needs another 30 days and as long as that notification occurs within the first 30 day extension. In other words, the plan has 45 days to decide the claim but it can extend that time period by another 60 days for a total of 105 days. The plan must have very good reasons to extend the decision time. Additionally, the time period may be tolled or stopped, as far as counting the days for the decision, if a request for information has been sent to you and the plan is waiting for your response. Therefore, it is in your interest to keep the clock running, so to speak, by promptly providing information to the plan. Of course the plan may ask you for information that you do not have or that is not reasonably available to you. You should immediately notify the plan of any difficulties and work to obtain that information if it is necessary for the plan decision. It is good to have an attorney involved in these claims early on to help you lay a foundation for your claim.

III. The Notice of Denial Letter

Thirdly, if the claim is denied there is certain information that must be in the notice of denial letter sent to you. This is covered under 29 C.F.R. § 2560.503-1(g). The notice of denial letter should be understandable and should contain the specific reason or reasons for the denial of your claim. There should also be a reference to the specific plan provision upon which the denial is based. Furthermore, a description of any additional material or information necessary for the claimant to perfect the claim and an explanation as to why such material is necessary should be included. The notice of denial letter should also have a description of the plan’s review or appeal procedures and the time limits applicable. It should also tell you of your right to bring an ERISA civil action if you have completed required appeals. It is critical to immediately consult with a lawyer who regularly handles ERISA claims if the above information is missing. If there was an internal rule, guideline, protocol, or other criteria relied on in denying the claim, then this is to be provided to you free of charge and you should be so notified of this. Additionally, if the denial is based on medical necessity, experimental treatment, or some similar exclusion or limit, then there should be an explanation of the scientific or clinical judgment for the determination and there should be an application of the terms of the plan to your medical circumstances. If this is not provided in the letter then there should be a statement that an explanation will be provided free of charge upon request.

IV. Your Appeal

After you receive the notice of denial letter, you should prepare to file a letter of appeal. It is highly advisable to have an attorney assist with your appeal. It is not wise to immediately file an appeal without providing additional medical information or further medical information as you are likely to get the same result. At the very least, there should be additional comments or arguments pointing out why the plan decision is wrong. It is wise to keep the envelope in which the notice of denial letter was sent because sometimes letters are dated differently than when actually mailed. This could make a big difference later on if the plan administrator or decision maker refuses to give you any additional time to submit your appeal. For disability plans you must be given at least 180 days following your receipt of the notice of denial letter, to send your appeal. The appeal is required to allow you the opportunity to submit written comments, documents or other information relating to your claim. You are also to be provided, upon request and free of charge, all copies of all documents, records and other information relevant to your claim or benefits. A document is relevant, according to 29 C.F.R. § 2560.503-1(m), if it was relied upon in making the benefit determination, if it was submitted, considered or generated in the course of making the decision, if it demonstrates compliance with the administrative processes or if it constitutes a statement of policy or guidance with respect of the plan determination. The plan is not supposed to provide any deference to the initial decision made. The claim should be considered again as if it had been filed for the first time. On appeal, if there is some issue as to whether a particular treatment, drug or other item is experimental, investigational or not medically necessary, then the plan administrator or decision maker is required to consult with a health care professional with appropriate training in that area of medicine. During the appeal process there is to be an identification of all medical or vocational experts from whom the plan administrator or decision maker obtained advice, even if they did not rely on the advice. In other words, if the plan administrator obtains an opinion from a doctor and it is not favorable for the plan’s denial, the plan, nonetheless, is required to identify the doctor. Of course, the plan knows this so the plan will choose a medical expert or consultant who the plan already knows or believes will render a favorable opinion to support the denial. There are companies employing doctors who review medical records for insurance companies, but do not usually examine the claimant. This is not usually a fair review. Again, it is important to have a lawyer assist with your appeal.

V. The Appeal Decision- 45 to 90 Days

A decision on the appeal should be made within 45 days according to 29 C.F.R. § 2560.503-1(i). However, if more time is needed then the plan administrator can give you notice during the initial 45 day time period, that an additional 45 days is needed to make the decision. The notice to you should indicate the special circumstances requiring an extension of time and the date by which the plan expects to give you its decision. Once you receive the decision, it should contain the specific reason or reasons as to why your claim was denied (if it was denied) and reference to specific plan provisions which support this denial. Furthermore, the denial letter should contain a statement that you are entitled to receive, upon request and free of charge, access to and copies of all documents and records that are relevant to the claim.

VI. Filing a Lawsuit

As you can tell, the claim process has some intricate rules and procedures to follow. This is just a summary of those rules and, in fact, there are more specific provisions if you examine the actual regulations. In my opinion, it is wise to obtain an attorney experienced and skilled in ERISA claims as soon as possible. It is advantageous to obtain an attorney in connection with the initial claim filing, however, after a claim is denied I believe it is crucially important to obtain an attorney before you file an appeal. There are several reasons for this. Before you file a lawsuit you must go through all required steps in the claims process. If you don’t, you may harm or destroy your claim. If you file a lawsuit before you exhaust the claims process, your case may be dismissed if you can’t meet some legal exceptions. Finally, once you are in a position to file a lawsuit and you have exhausted all appeals, if you do not have a well established record, an attorney may find it difficult or impossible to represent you. The court is usually going to examine the facts known to the plan as they existed before you filed your lawsuit. Your case must usually have a good record before a lawsuit is filed, and that is where an attorney may help. If the plan administrator does not follow the rules, it may help your case. The rules are designed to move the claim process along, and to try to make the process fairer for the claimant. Many badly disabled people are denied benefits wrongfully. Being aware of the rules may help your claim. I encourage you to seek counsel early on.

There are attorneys who are willing to help you.  Contact  David Martin