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Technical denials in long-term disability claims occur when a claim is denied for non-medical reasons. The most common reasons for a technical denial of a long-term disability claim are pre-existing conditions, missed deadlines, and not meeting your policy’s “Actively at Work” requirements.
Pre-Existing Conditions
A long-term disability claim can be denied based on a pre-existing condition. You will need to check your long-term disability policy for the exact definition of a pre-existing condition, but most claims filed within one year from the date your policy became active would be subject to the pre-existing condition exclusion because the condition arose within the first 12 months of employment.
A long-term disability claim can also be denied if the insurance company determines that you received treatment related to your disability claim before your insurance took effect. It is very important to ask for a copy of your policy and read the exact wording to know what could cause your claim to be denied. The insurance company should have included the exact wording from the policy to explain why they denied your claim in the denial letter. Compare this language to the policy to confirm the insurer used the correct language.
Here is a sample Pre-Existing Condition Exclusion clause:
Pre-Existing Condition Limitation
The Insurance Company will not pay benefits for any period of Disability caused or contributed to by, or resulting from, a Pre-existing Condition. A “Pre-existing Condition” means any Injury or Sickness for which the Employee incurred expenses, received medical treatment, care or services including diagnostic measures, took prescribed drugs or medicines, or for which a reasonable person would have consulted a physician within 3 months before his or her most recent effective date of insurance.
The Pre-existing Condition Limitation will apply to any added benefits or increases in benefits. This limitation will not apply to a period of Disability that begins after an Employee has been in Active Service for a continuous period of 3 months during which the Employee has received no medical treatment, care or services in connection with the pre-existing conditions or is covered for at least 12 months after his or her most recent effective date of insurance, or the effective date of any added or increased benefits.
A Cigna Long-Term Disability Insurance Policy
Group policies, in particular, usually have a pre-existing condition exclusion. When an insurance company agrees to provide insurance to a large group, it cannot know the full scope of these employees’ health issues. It is taking an unknown risk, unlike when it insures an individual. Unfortunately, some individuals seek employment only to apply for and receive LTD services to avoid having to work.
Therefore, most claims filed within one year of coverage will be automatically denied to protect the insurance company. If an individual works longer than a year (in most cases), the insurance company cannot deny the claim based on the pre-existing condition exclusion and has to assess the individual and their claim.
The insurance company will likely investigate your claim if it falls under the pre-existing condition exclusion. This is usually the 90-day period before your claim, also referred to as the “lookback period,” but it can be longer depending on the terms of your policy, which is why you need to read your policy carefully.
If the insurance company determines that you were treated, diagnosed, or even had symptoms of your disability during the lookback period, your claim can be denied. However, there are different views on what words like “treatment” or “consultation” mean. That is why each case needs to be examined individually by several professionals, including doctors hired by the insurance company, the claimant’s treating physicians, and, in some cases, a judge.
Missed Deadlines
Another reason for a technical denial is missing your deadlines. When you are filing an appeal, you must meet all deadlines for the claim to be processed. Most individual and group plans under ERISA will give you 180 days to appeal an initial denial. During this time, it is wise to hire an attorney and provide that attorney with all the records you can to help stack the administrative record with favorable evidence that supports your claim.
It’s important to note that once you have exhausted your appeals, you cannot provide additional evidence to the judge in court. Everything you wish to present has to be given to the insurance company within those 180 days or while your appeal is still under review. If you miss the 180-day deadline period, your claim will not be allowed to go before a judge because you did not exhaust all of your administrative appeals. Your initial denial notice should have your appeal deadline on the notice, so be sure to keep your letter so you can review it and submit it to your attorney.
You Do Not Meet the “Actively at Work” Status
You may also receive a technical denial if you do not meet the “Actively at Work” status. The “Actively at Work” status has two provisions:
- The first provision is that the individual filing the claim must meet the standard for a full-time employee. Usually, the minimum number of hours for a full-time position is between 30 and 40 hours per week. Your LTD plan will outline the hours required to be eligible for benefits, so be sure to check your policy.
- The second provision is that the individual must be capable of active work even during vacations. If the claimant cannot work during a vacation period, the claim will be denied because they would have been unable to work during the vacation period.
Looking at a real-world example may help you better understand. Let’s look at Cheney v. Standard Insurance. The issue in this case is whether the claimant was eligible for long-term disability benefits when she declared her disability and took vacation time.
Cheney, an attorney, had C-5 neck surgery in 2012. She last worked December 9, 2011, and claimed disability starting December 20, 2011 onward. When she went out on disability, she first used two weeks of accrued vacation through to January 3, 2012. She was then granted six months of leave to July 2012.
She submitted a claim for long-term disability benefits under the firm’s ERISA plan in 2012. Under the policy, coverage ended when the employee ceased to be a “Member.” To be a “Member,” the claimant has to be “Actively at Work.” This definition required the claimant to be capable of Active Work even during vacations. Standard argued she was not eligible for disability benefits because she could not meet the “Actively at Work” definition.
The trial court held that claimant was eligible for benefits because she continued employment when she took accrued vacation, but the Seventh Circuit reversed this decision on appeal:
To be covered under this ERISA plan, the claimant must meet the definition of ‘Member, Active Work.’ This definition required the claimant to be capable of Active Work even during vacations. Plaintiff had a two-week gap (December 20, 2011, to January 3, 2012) when she admits she was not able to perform ‘Active Work.’ Under this policy, she lost eligibility because she was disabled while taking a vacation, and disability leave did not bridge the eligibility gap.
Cheney v. Standard Insurance
As you can see, overcoming a technical denial can be tricky. If your claim has been denied for a technical reason, you may still have time to seek expert advice from an attorney specializing in long-term disability law. We have successfully represented claimants in disability cases across the United States. If you want to talk to an experienced disability lawyer about your case, call us at (888) 321- 8131.
