Unum Provident Goes Against ERISA Rights

Elizabethtown, PAJay had an Unum Provident policy with his employer and received short term disability for five months (in July 2006) before he qualified for Unum's long term disability benefits. After six months receiving health insurance benefits from Unum, he was told to apply for social security—the insurance company expected him to return to work but he wasn' t ready—he had been diagnosed with general anxiety disorder and excessive stress.

Jay applied for social security but he was denied. " I never got a further word from Unum that I was required to do anything more," says Jay. "The checks from Unum arrived on time so I thought nothing was amiss, but I went ahead on my Unum rep's recommendation that I appeal social security for a second time and to keep Unum informed. So it was denied again and again but the last time it was approved. The first denial was an error; the second was a mistake by the court and it was finally approved in April of 2008.

When I told Unum that my appeal had finally been approved they requested the approval letter and then a case worker told me I would be responsible to pay back my benefits! I was shocked. I was looking forward to paying some bills with that money. And my son is in a coma—he has been that way since 2005, from a motor vehicle accident. I was then told the payback to Unum would be offset retroactive from when social security was awarded to me and that went back to January 16, 2006. (Social security gave me back pay.)

To make a long story short, up until social security benefits were approved, I had never been told anything about paying back retroactive benefits. And I didn't have a copy of Unum's policy.

This case is so twisted. After Unum told me I had to pay back my benefits, I talked to everybody and anybody at the insurance company. A few reps told me that 'Once I hit the financial recovery unit at Unum, I could apply for hardship and won't have to pay back the retroactive lump sum'. They didn't give me an amount I had to pay back until I got my award letter from social security—three weeks after my Unum benefits had expired. They told me I had been paid $46,000 and I had to pay back $43,000.

I sent a letter detailing my family's financial condition, along with copies of bank statements but it didn't do any good. I said my son is in a coma, recovering at home, my wife is ill with debilitating migraines, my 80-year-old mother lives with us and needs surgery and I have a 17-year-old daughter. I asked why I was denied the hardship claim and my claims rep didn't know but someone would get back to me.

Then I was told by another Unum rep that it didn't make any difference what I did or say, nothing would dissuade their decision. According to this guy, the hardship claim was make-believe! The disability benefit I am currently getting is less than what Unum gave me and if I have to pay this back, I would have to place my mum in an institution, place my son in an institution where he wouldn't get any help and lose our home.

The Unum guy said, 'Sorry, that's the way it is.' But what about the people who told me I could collect for financial hardship? I sent back a letter to my case worker indicating discrepancies with their notes. For instance, they said I was responsible to payback according to my contract and referred to an agreement I signed. But there is nothing in the agreement that says anything about paying back benefits, retroactive.

At this time I am writing a letter to the Pennsylvania state insurance department; I want them to go to the insurance company and see what they are doing. What they are doing does not meet my ERISA rights. And there is nothing in my contract that says anything about retroactive payback of Unum life insurance—the word 'retroactive' isn't even mentioned.

Two reps from Unum have explicitly told me there is nothing I can do. Yet another rep told me not to worry about it because 'you can't squeeze blood out of a turnip'. And the last rep spent 40 minutes on the phone with me, explaining why there were no waivers in my case—but there were waivers, just not applicable to me. At the end of that conversation, he talked about collection agencies. 'We never had a family go to court over money that could not be had,' he said. I just about fell off my chair because after all this time, telling me there was nothing I could do, he said this!

I asked him to rephrase that comment so I could understand it. 'Am I being taped because that is against the law', he said. From what I gathered, if there is no money to be had, I should just get rid of it so they can't come after me.

I called social security and they said my benefits are for my family and Unum cannot demand a dime back. However, in good faith I did agree to pay Unum Provident $200 per month while I can get this appeal report together. In the long term I do not believe Unum reps have acted in my best interest as outlined in the contract.

I am very concerned that Unum Provident will let this happen to our family—it is against our best interest as identified in our ERISA rights."