Background
On June 3, 2019, Ms. Slane began working as a salesperson for Cogent Communications (“Cogent”). Due to her health issues, which required multiple emergency room visits, intravenous infusions, and hospital stays, Ms. Slane temporarily stopped working from June 21, 2019, through July 22, 2019. A few days after returning to work, however, her health forced her to stop working again. In late January 2020, she filed a claim for long-term disability (“LTD”) benefits.
The LTD Policy and RSL’s Claim Decision
The LTD policy contained the following language excluding benefits for a disability arising from a pre-existing condition:
- Benefits will not be paid for a Total Disability:
- Caused by;
- Contributed to by; or
- Resulting from;
- A Pre-existing Condition unless the Insured has been Actively at Work for one full day following the end of 12 consecutive months from the date s/he became an Insured. “Pre-existing Condition” means any Sickness or Injury for which the Insured received medical treatment, consultation, care or services, or took prescribed medications, during the 3 months immediately prior to the Insured’s effective date of insurance.
RSL denied Ms. Slane’s LTD claim, determining that coverage was excluded based on the pre-existing condition language. When Ms. Slane received RSL’s denial letter on August 6, 2020, she timely appealed. RSL claimed that it mailed its August 17, 2020, final denial letter to her attorney, who never received it.
After more than 90 days had passed since RSL received Ms. Slane’s appeal, she filed a lawsuit to recover her LTD benefits. In response, RSL filed a motion for partial summary judgment seeking to keep its deferential “abuse of discretion” standard of review instead of a “de novo” review more favorable to Ms. Slane.
The Court’s Decision
In holding that it could not say as a matter of law that RSL met its burden of proving that the denial letter was actually mailed, the court explained that:
- An insurance company acting as a plan administrator may forfeit the benefit of the “abuse of discretion” standard of review if it fails to strictly comply with ERISA deadlines, such as when it fails to make and send a decision by the 90-day deadline.
- To resolve a dispute concerning if a decision letter was or was not received, courts apply the “mailbox rule” where the threshold question is whether there is sufficient evidence that the letter was actually mailed.
- RSL failed to introduce any evidence from a person who places postage on envelopes or claims to have put the letter in the mail.
- Ms. Slane’s attorney, on the other hand, declared under penalty of perjury that neither he nor his client received the August 17, 2020 letter denying her appeal.
The court concluded that without evidence indicating how and by whom the August 2020 denial letter was specifically mailed or how letters, in general, are actually mailed while staff is working remotely during the pandemic, summary judgment in favor of RSL was not warranted.
Help from an Attorney with Expertise in Disability Insurance
Disability insurance law is complicated. If your claim for long term disability benefits was denied or being delayed by an insurance company, it is important to get help from a lawyer with expertise in disability law.
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