Denied Disability Insurance: A Tale of Two Extremes

Sacramento, CASometimes a denied disability insurance claim goes for the plaintiff, and sometimes the pendulum swings for the defendant. But whichever way the cookie crumbles, a claimant advocate maintains that the sad truth is that the vast majority of claims wind up being stamped “denied ERISA disability,” or some such denial.

“I’m sorry to be so blunt,” says Paul Hernandez, in comments published in the Inland Valley Daily Bulletin (1/19/13), “but unless the person will die soon, [claims] are denied.

“Unfortunately, about 60 percent of those who are denied stop at that point; they don’t know they can appeal,” Hernandez says. “They just give up.”

Hernandez, who has served as an advocate for long-term disability denied claimants since retiring from the banking industry, noted there are three levels of appeal following initial denial of a claim - denials which, in this era of a slow economy and tight money, have become a foregone conclusion, according to various consumer groups.

Hernandez goes on to say that a California ERISA-denied claim is, in the majority of cases, won on the second appeal when the claimant appears before a judge. “About 65 percent of the cases I take on will be approved on appeal,” he said.

Many seeking California insurance claim help are discouraged by the length of time for the process to work its way through: an appeal of a denied claim can take upwards of 18 months. Some claimants with serious health issues don’t have the luxury of time. Others will just give up after a denied disability insurance finding, either unaware of the appeals process or simply out of discouragement that the initial finding was not in the claimant’s favor.

On occasion, a claimant will come out on the losing end, as was the case when a claimant to Hartford Life and Accident Insurance Co. was denied benefits over diagnosis of chronic fatigue, fibromyalgia and hypothyroidism. According to Insurance Law & Litigation Week (2/18/13), claimant Virginia Ianniello sued Hartford over the denial, but the Court found for the defendant.

Ianniello appealed, but the Second Circuit Court upheld the lower court’s ruling on the denied disability insurance case. In its decision, the Court ruled that Hartford had not abused its discretion in requiring the claimant to undergo what is widely held as the most universally recognized test for diagnosing fibromyalgia by the American College of Rheumatology. Ianniello had originally sought benefits with a physician’s statement advising Hartford of her doctor’s diagnosis.

However, while one court can find no fault with the insurer, another certainly can and did when California resident Tanya Mondolo sued Unum Life Insurance Co. for wrongful denial of benefits under California Insurance Law. Not only did the Court rule that Unum had abused its discretion in terminating Mondolo’s benefits, the Court ordered that Mondolo’s benefits be immediately reinstated, with interest.

Mondolo also suffers from fibromyalgia, together with avascular necrosis. Her illness made Mondolo’s California ERISA-denied claim, all that much worse.

Hernandez notes that denied disability insurance requires a start to the appeals process unless an appeal is triggered within 60 days of the initial denial. Otherwise, the entire process will have to start from the beginning.