• David Martin

ERISA Disability Games Insurers Play: Admit Disability but Deny for a Limitation/Exclusion


The case Laake v. The Benefits Comm., W. & S. Fin. Grp. Co. Flexible Benefits Plan, No. 1:17-CV-611 (WOB-SKB), 2021 WL 5166377 (S.D. Ohio Nov. 5, 2021), illustrates a common game plan administrators and insurers play with ERISA disability. That is to admit disability but latch onto a benefit that pays for a limited duration (such as a mental condition), or an exclusion such as chronic pain syndrome or fibromyalgia.


Facts of the Case:

  • Ms. Laake filed a claim for long-term disability, but the claim was denied for arbitrary reasons.

  • She then filed suit, and the court agreed that the decision was arbitrary and capricious. The court remanded the case back to the plan administrator for another swing.

  • The plan administrator, however, failed to make a timely decision. It eventually denied the claim again.

  • Suit was reinstituted. This time, the court was a bit irritated and made several interesting findings.


Court Finding #1: "You Can't Do That"

First, the court decided that a de novo review was appropriate. The people making her claim decision were not on the committee vested with that authority and the plan did not give discretion to those individuals.


Court Finding #2: "You're Taking Too Long"

Second, the decision took over 270 days – which was too long and past the deadlines required for a full and fair review. Further, the plan administrator latched onto a “chronic pain syndrome” exclusion to admit disability but still deny the claim. That is often an appealing position since it acknowledges the claimant’s credibility, but still permits a denial. However, there was little or no evidence that Ms. Laake had this condition.


The court criticized the defendants for their gamesmanship and several other matters as well. In the end, the court awarded past benefits, the maximum statutory penalty of $110 a day (for a total of $40,370 in penalties), and attorney’s fees of $107,100.


The problem, however, is that Ms. Laake had to endure years of claims, appeals, and litigation to finally receive the disability benefits she deserved all along. The court-conceived idea of remand is not a good procedure. It penalizes claimants while giving plan administrators and insurers the opportunity to play games and abuse the claim process. Two bites at the proverbial apple to a claimant’s one bite has never been a fair deal. This is another example of why it is so crucial to hire an experienced ERISA disability attorney to fight for the benefits you deserve.

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