When Fortune 500 companies opt for short or long-term disability coverage for their workers, the chances are that they have at least considered UNUM. One out of every three of these large companies has policies with UNUM.
For companies, they may find benefits from dealing with a large company. Perhaps these may include lower premiums. However, this does nothing for the workers who rely on these insurance policies when they find themselves disabled and unable to work.
If Your Policy Is Through Work, Your Company Chose UNUM and Not You
Employees have no say in who their company selects to provide disability insurance. These decisions are made in a boardroom by senior executives who look at the company’s cost structure. However, these employees are stuck with the results, and they must deal with UNUM and its coverage decisions. They might experience stress and challenges when the giant insurer denies a claim they should have approved or relied on a hyper technicality to say no.
UNUM is a major global company with over $10 billion in annual revenues. The company has subsidiaries that sell multiple types of insurance. The company makes its most money on disability policies. UNUM operates like any other insurance company. It collects premiums and invests them. This includes things like buying stocks and bonds, so they can earn high returns on their investments. When they need to pay claims, they have less money to invest, and they earn lower returns for their shareholders.
UNUM Plays Tough Like Every Other Insurance Company in the Disability Business
UNUM behaves like every other insurance company. In some cases, UNUM reviews show that their practices are even worse, and it has gotten them in trouble over the years.
UNUM once paid a large fine and entered into a settlement agreement because the company:
- Selectively focused on certain parts of the medical file and ignoring others to support the denial of claims.
- Overruled the opinion of the claimant’s own doctors in favor of those of its own in-house doctors who never even saw the claimant in person.
- Instituted requirements that the policy did not contain (such as lack of objective evidence) as grounds for denying claims.
- Subjected adjusters to quotas for claims denials.
Even though UNUM promised to avoid these practices in a settlement agreement, it appears that they have not followed through on their word. They got in trouble again with state regulators for the same practices, notwithstanding the settlement agreement. UNUM faced fines for these practices in multiple states. However, they do not appear to have cleaned up their act. We continuously see clients who tell us that UNUM wrongly and unfairly denied their insurance claims.
UNUM Has Invested the Premiums and Does Not Want to Pay Claims
Insurance companies like UNUM do better financially when they make it overly difficult for people to collect on their disability policies. They count on people either giving up on their claims or failing to successfully overturn the denials in an appeal. They will harp on technicalities and introduce phantom requirements to come up with a reason to deny claims.
There are two different types of rules that apply to UNUM disability policies. If your disability coverage is an employee benefit from your job, the laws of ERISA apply. If you purchased a private disability policy from UNUM, state laws regarding contracts and insurance apply. Either way, you have the right to appeal the denial. Further, after recent changes to ERISA rules, you can sue the insurance company over a denial. You can also sue for breach of contract or bad faith denial when they refuse to pay on a private disability claim.
UNUM Does Not Have the Final Say Over Your Claim
Just because UNUM denied your claim does not mean that it is the final say on the matter. If an insurance company can serve as the final judge on its own denials, it will barely pay any claims at all, even if they are valid. The company has oversight, too, under state and federal law, depending on which type of policy that you have.
When you are appealing an ERISA denial, it may not seem fair from the way that the law sets up the process. Unfortunately, there is nothing that you can do about it. This is how ERISA works. The insurance company is the first level of appeal, and they get to review their own denial. While this seems unfair, you need to fully participate in the process. Otherwise, it can harm your chances of receiving benefits if you must go to court.
Why UNUM May Deny Your Claim
UNUM will deny your claim for many reasons. At the claims process, they are the gatekeeper and the referee.
Reasons for denial include:
- Lack of objective evidence to prove disability (although UNUM paid fines for this exact practice).
- The disability does not meet the plan’s definition of the term.
- UNUM believes that you can still work.
- The insurance company claims that some paperwork is missing or that you missed one or more deadlines.
Some recent reforms to ERISA rules make it far easier to understand why your claim received a denial. UNUM must explain and go on record with why they did not approve the claim. When you ask, they must hand over key documents that they relied on in reaching their decision. This will put you in a better position to appeal. You will have a full understanding of the insurance company’s position.
UNUM May Deny What They Cannot See on Paper
There are some cases where it will be very difficult for UNUM to deny a claim. For example, if the claimant suffered a spinal cord injury or a serious traumatic brain injury, you have a much stronger claim. Where insurance companies will be very difficult is when there are injuries that are not as readily apparent to the eye.
These can include:
- Post-traumatic stress disorder
- Major depression and anxiety
- Chronic pain conditions that may not show up on an MRI
Here, the insurance company is more likely to challenge and deny the claim. At some point in the process, they may ask you to go for an examination with an independent doctor. They may ask for test results, such as an MRI.
However, some conditions do not show up on tests, like CT scans or blood panels. The insurance company will not take your word when it means that they must pay out a claim. This is certainly not true when a doctor has not clearly written it on paper in front of them.
Trying to Resolve Your Denial Before an Appeal
There is a chance that the denial may have been the result of a misunderstanding. While you have strict deadlines to file an appeal, it may help to have your attorney talk to the insurance company to see if they can resolve the matter without a formal appeal. If it is an issue of some missing paperwork, there is a chance that an attorney can fix it informally. Insurance companies may not want to expend their own resources on an appeals process when there is an easy resolution to the problem. This is the best-case scenario, but insurance companies rarely make it this easy for you.
Evidence that Can Help Your UNUM Appeal
ERISA gives you the right to file an appeal first with UNUM. They are supposed to objectively review your claim to see if they made a mistake. You will have the opportunity to build a record for the adjuster to consider.
This can include:
- An opinion from a treating doctor
- Vocational reports
- Medical testing from an independent doctor (not necessarily UNUM’s in-house doctors)
- Job descriptions
- Testimony from witnesses
You may question why you need to go to all of these lengths in the appeal when you are not going to get a fair shake from the insurance company. You hope that UNUM lives up to its word in giving you an objective forum for an appeal. Nonetheless, even if they do not, it is in your best interests to build a very strong record in case you need to reach the next stage of the appeals process. Your lawyer will help you build the strongest case possible with all available documentation that can show your entitlement to benefits.
Taking Your Appeal to Federal Court
If you can persuade the insurance company to grant your claim on appeal, you are not out of options. It will be grossly unfair if UNUM got the last word on your claim, especially given their long track record of making things hard on claimants, sometimes even acting in bad faith. Thankfully, your ERISA long-term disability case can then be brought to federal court (since ERISA is a federal law). In the end, it will be a federal judge who decides whether you can get disability benefits.
There is a catch when you appeal the denial to a federal district court. Many people have an impression of court as a hearing in front of a judge with a jury and witnesses. It does not work that way for an ERISA appeal.
Some exceptions allow a judge to ask for more evidence, but the general rule is that the evidence that was in front of the insurance company at the appeals phase is what the judge is allowed to consider. Usually, you cannot add more evidence unless the judge specifically asks for it. This is why you need to take the appeals process more seriously from the very beginning.
If your appeal reaches federal court, you can be certain that you will have an objective person reviewing your file. They will make their own determination, after reviewing the record, whether you are entitled to benefits. They will review why the insurance company denied the claim, but they will not defer to the insurance company.
The last step in the process is going to a federal appeals court. They will review the decision of the district court judge to see if they made an error based on the record in front of them. This is a process that needs the expertise of an attorney, given the stakes at hand.
Appealing a Denial of a Privately Purchased Disability Insurance Policy
If UNUM denied a claim from a privately purchased policy, you might have slightly broader appeal rights because ERISA does not present limitations. If the appeals process does not go in your favor, you can file a lawsuit in state court. The ways that you can sue an insurance company under state law are far more numerous than your ability to do anything under federal law. In fact, under federal law, the only way that you can sue UNUM is if they do not follow the process required by ERISA.
Under privately purchased policies, you may file the following types of lawsuits if UNUM denies your claim:
- Bad faith
- Breach of contract
- Violation of state insurance laws
- Emotional hardships
- Loss of business opportunities
Get Legal Help for a Disability Insurance Claim Right Now
The important thing when dealing with UNUM is to get legal help, especially if you know that your claim may have an issue. Disability claims lawyers may work for you on a contingency basis, meaning that you will not have to pay money out of pocket for a lawyer.
Getting legal help is even more important if you received a denial of a valid claim. Not only do you have tight timelines to appeal the denial, but you also need to get started more quickly because money can be a critical issue when you are unable to work.
This is not the type of legal case where you can try to handle it on your own, only to need a lawyer later on if you don’t succeed. Get legal help from an experienced ERISA lawyer as early as possible.
Following graduation from Loyola Law School in New Orleans in 1990, Price McNamara served as a Federal Judicial Law Clerk to the Honorable John M Shaw, Chief Judge, United States District Court Western District of Louisiana.
Mr. McNamara founded the Law Offices of J. Price McNamara, and began putting his past experience to work for the injured and disabled clients he now represents against the insurance companies in personal injury and long term disability and other insurance disputes in both federal and state courts