Court Finds Hartford's Denial of Long-Term Disability Benefits Based on a Pre-Existing Condition Exclusion Was Wrong

The Third Circuit Court of Appeals finds Hartford wrongfully applied a pre-existing condition exclusion to an individual suffering from multiple sclerosis. The court overturned a lower court’s finding in favor of Hartford and entered an order requiring Hartford to issue all benefits owed to Ms. McLeod.

Ms. McLeod was hired by Valley Media on January 26, 1998. Through her employment, she was eligible for long-term disability (“LTD”) benefits effective April 1, 1999. The LTD policy contains a pre-existing condition exclusion which states no LTD benefits will be paid for any disability that is:

  • Due to, contributed to by, or results from a pre-existing conditions; unless
  • Such disability begins after 365 consecutive days during which an individual is insured

Ms. McLeod was forced to cease working on January 28, 2000, after being diagnosed with multiple sclerosis. Because her disability began within 365 days of her effective date of coverage, the pre-existing condition exclusion was triggered.

Under the LTD policy, “pre-existing condition” was defined as any injury or sickness or any manifestations, symptoms, findings, or aggravations related to or resulting from such injury or sickness, for which a claimant received medical care for during the 90 days before the effective date of coverage.

The question in this case for Hartford was:

Was multiple sclerosis a pre-existing condition?

Hartford answered yes. The Third Circuit Court of Appeals disagreed and ruled in favor of Ms. McLeod.

The Court’s Review of Ms. McLeod’s Claim

The court here conducted an in-depth review of the pre-existing condition exclusion. It recognized that the only treatment received by Ms. McLeod during the 90 days prior to the effective date of LTD coverage was for numbness in her left arm. A diagnosis of multiple sclerosis was not identified until well after the 90 day lookback period.

Hartford argued that numbness is a symptom of multiple sclerosis. It argued that treatment for this symptom of multiple sclerosis was equivalent to treating for multiple sclerosis during the 90 day lookback period. This despite Ms. McLeod not being diagnosed with multiple sclerosis for many months after that treatment.

The court found that Hartford’s interpretation of the policy was wrong. The court held that Ms. McLeod could not have received medical care during the look-back period for a condition that was unknown and not suspected at the time of treatment. Quite simply, Ms. McLeod could not have received care for multiple sclerosis at a time when it had not been diagnosed or suspected.

The court was concerned with Hartford’s arguments. It held that if it were to rule in favor of Hartford and allow for such an after-the-fact analysis, it would be supporting an expansion of the definition of pre-existing condition as to make it meaningless. Insurance companies would then be allowed to use any prior symptoms not inconsistent with a future diagnoses to provide a basis for denial. The court would not allow for such an expansion.

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