This issue came up recently in a case in the Northern District of Alabama known as Romine v. Unum. In that case the Plaintiff contended that the calculations used by the insurance company were wrong. However, Unum contended that it has always used the calculations that it was presently using. The Plaintiff countered that those calculations weren’t in the plan and so it was improper to develop its own calculations to justify what it was doing even though this had taken place for a number of years. The issue was presented to the court and the court ruled that the plan was ambiguous. As a result, the court correctly construed the ambiguous terms against the drafter of the plan document, Unum. As a result, the court ruled against Unum’s calculations but the court did not like the Plaintiff’s proposed calculations. Accordingly, further rulings will be necessary on this.
This case underscores the importance of evaluating the basis of your benefit claim calculation. We do this as a matter of course for our clients. Once the insurance company has determined your calculation, we then request information as to the basis of this calculation. This is very important because that calculation needs to be rooted in plan language and not an insurance adjustor’s thoughts on what should be done. Any ambiguities in the plan should be construed in the claimant’s favor. This is another reason why you need experienced representation.