A property manager with ovarian cancer won her lawsuit against United of Omaha for long-term disability benefits. United of Omaha determined her disability due to ovarian cancer was a preexisting condition. After losing the case in Mississippi, United of Omaha appealed to the Fifth Circuit Court of Appeals. The decision was affirmed on appeal.
How Does a Pre-existing Condition Exclusion in a Long Term Disability Policy Work?
Long term disability insurance policies have an exclusion for pre-existing conditions. Disability benefits are not paid for a disability that is considered a preexisting condition. The definition of a preexisting condition can varying depending on the insurance policy, but most state that the disability:
- must have started in the first 12 months of obtaining insurance; and
- is “caused by, contributed to by, or resulting from” a preexisting condition;
A preexisting condition typically means an injury or sickness for which the insured received medical treatment, advice or consultation, care or services, or took prescription medicines in a stated amount of months prior to the date insurance coverage began. This period of time is referred to as the “look back” period and is usually three months before the coverage effective date.
Can Treatment for a Symptom of a Later Diagnosed Condition be Considered a Preexisting Condition?
The question in Smith v. United of Omaha was whether United of Omaha acted reasonably when it determined Smith, a property manager, received treatment during the look back period for pleural effusion, which was a symptom of the ovarian cancer. The Court of Appeals for the Fifth Circuit answered that question with a “no.”
Smith argued that United of Omaha was wrong because the condition that caused her disability is not pleural effusion, but rather, ovarian cancer, and she did not receive treatment or medical care or services for ovarian cancer in the 3 month look back period. The Court agreed.
The court stated that the preexisting condition exclusion could only apply if Smith had received treatment for ovarian cancer, but she had not. The court explained pleural effusion can be caused by any number of conditions, her symptoms were non-specific to ovarian cancer and the medical records do not indicate her doctors believed pleural effusion was likely caused by the cancer.
The Fifth Circuit cited with approval the Third Circuit Court of Appeals’ decision in McLeod v. Hartford Life & Accident Insurance Company. The McLeod Court held that treatment for a symptom of a preexisting condition can result in a proper denial when there is intent to treat or uncover the particular ailment which causes that symptom even if there is no diagnosis at that time.
Preexisting Condition Exclusions do not Apply to Later Diagnosed Conditions not Suspected at Time of Treatment
The take away from this case, like the McLeod case, is that courts are reluctant to deny coverage to disability claimants who sought or received treatment for a symptom of a disabling condition that was not suspected at the time. Someone cannot receive treatment for a condition that was not known to exist.
The recent ruling is consistent with courts refusing to allow disability insurance companies to broadly apply preexisting condition exclusions in disability claims governed by ERISA.
Dabdoub Law Firm Wins Preexisting Condition Disability Insurance Lawsuit
This law firm understands disability insurance law and preexisting condition exclusions. In 2017, the firm won an important preexisting condition case in the Eleventh Circuit Court of Appeals, Bradshaw v. Reliance Standard Insurance Company. That case involved the denial of disability benefits to a mother who suffered a stroke after giving birth. The court agreed with attorney Edward Dabdoub that denying his client coverage for a stroke caused by preeclampsia only because she was pregnant was unlawful.
If your disability insurance claim was denied or benefits terminated, you want to have an experienced disability lawyer on your side. Because this disability law firm focuses only on helping people get disability benefits from insurance companies,the firm has a track record of success of winning disability insurance lawsuits in trial courts and court of appeals.
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