Long-Term Disability Denials & Terminations
If you've applied for long-term disability (LTD) benefits and been denied or had your benefits terminated, you are likely experiencing enormous financial hardship and stress.
Not only is your LTD benefit check not coming every month, but you're also in need of good legal advice and assistance of an experienced long-term disability attorney. The reason is you will need to appeal the denial and perhaps even initiate a lawsuit to reinstate benefits.
A long-term disability attorney will cost you money, and you will almost certainly suffer continued distress over the loss of expected benefits.
This seems very unfair, especially if you believe the denial is flat-out wrong. What can you do to hold the insurance company. Can you sue them for "bad faith"?
Missouri Law on Bad Faith is Preempted by ERISA
In Missouri, there is a law that allows insureds (like you) to file a claim for bad faith against your own insurance company. Missouri law refers to bad faith actions by an insurer as the "vexatious refusal to pay", and these claims are governed by the Missouri Revised Statutes sections 375.296 and 375.420.
If you are able to prove certain requirements in these types of cases, you can recover not only the repayment of what the insurance company owes you but also your attorneys' fees and even penalties. That's a powerful thing for ordinary consumers like you.
But here's the rub. If your long-term disability insurance policy is governed by a federal law known as ERISA (and most employer group policies are), then Missouri law is "preempted". This means the federal law of ERISA governs, not Missouri law. Of course, ERISA is a law that strongly favors insurers. It contains no bad faith protection like that in Missouri law.
So the answer to the question above is "NO" for most LTD claims — you cannot recover bad faith damages or assert a bad faith claim in Missouri for the denial of long-term disability benefits if your policy is governed by ERISA.
The only thing you can recover in an ERISA LTD claim is what the insurance company already owes you for back benefits. In some cases, you may be able to recover attorney's fees, but this rarely happens and is solely within the discretion of the judge.
Bad Faith Claims May Arise With Non-ERISA Policies
On the other hand, if your long-term disability policy was purchased individually or through a group not governed by ERISA, you may be able to sue for bad faith in Missouri. You would have to prove the elements that are set forth in Missouri law for vexatious refusal to pay. You should remember that the burden of proof is on you as the insured. These elements can be difficult to prove, and as a result, it is important that you consult with an experienced long-term disability attorney as soon as possible.
Our Kansas City Long Term Disability Lawyer Can Help
In the end, perhaps the most important thing to remember is that disability insurance companies have a huge tactical advantage over you in LTD cases. The insurance company knows that they usually will only have to pay you what they would have owed you in the first place. They have are denying claims everyday, and have a team of doctors and lawyers to assist them. They know that most consumers do not.
For this reason, many LTD claims are denied because they simply know that most claimants won't fight back. Don't be one of those LTD claimants. Be informed and take action. If you would like more information about long-term disability appeals in Missouri or Kansas, please call our Kansas City long term disability lawyer at 816-203-0143 or fill out a form below. We would be happy to talk to you about your case and review your denial letter for free.