The Wisconsin District Court found that a Wisconsin general laborer’s denied long term disability benefits was an ERISA violation. Mr. Claybrooks worked for Eaton as a general laborer and was eligible for short-term and long-term disability benefits under an employee benefit welfare plan. Sedgwick was the claims administrator for both short-term and long-term plans.
On May 15, 2019, Mr. Claybrooks suffered a workplace injury when he was struck in the head by a falling piece of metal. Mr. Claybrooks went to the emergency room and a CT scan of his head revealed no acute intracranial findings. Mr. Claybrooks returned to the emergency room the next week with headaches, visual disturbances and low back pain. The attending physician noted his symptoms were consistent with traumatic brain injury and advised him to remain off work.
Mr. Claybrooks submitted a claim to Sedgwick for short-term disability benefits on May 21, 2019. On November 12, 2019, Sedgwick informed Mr. Claybrooks he no longer qualified for short-term disability benefits but may be eligible for long-term disability benefits and provided application instructions.
Mr. Claybrooks submitted a claim to Sedgwick for long-term disability benefits on November 28, 2019 which Sedgwick denied on December 12, 2019 because Mr. Claybrook’s absence from work did not exceed the six-month approved waiting period required. Further, Sedgwick informed Mr. Claybrook’s that in order to be eligible for long-term benefits, his short-term benefits would need to be in approved status.
On May 5, 2020, Mr. Claybrooks filed an appeal against the denial of both the short-term and long-term benefits to Sedgwick. Sedgwick reversed its decision to deny short-term benefits and paid short-term benefits for the full maximum benefit period.
However, Sedgwick denied the appeal of the long-term benefits because it alleged Mr. Claybrooks had begun working for a wage or profit. Sedgwick had reviewed a payroll ledger that confirmed Mr. Claybrooks was working for a different employer from January to May 2020. Mr. Claybrooks was working part-time for five months doing custodial work for about two days per week.
Mr. Claybrooks appealed again the denial of the long-term benefits stating that although he had worked without approval, he should not be disqualified for long-term disability benefits. Sedgwick again denied long-term benefits stating the medical records did not support that Mr. Claybrooks was disabled. Mr. Claybrooks filed a lawsuit in the United States District Court in the Eastern District of Wisconsin.
Mr. Claybrooks argued that his employment with a temporary agency after the denial of his claim for long-term benefits cannot reasonably render him ineligible for benefits.
Further, Mr. Claybrooks argued that Sedgwick did not provide a full and fair review of his appeal because he did not have the opportunity to respond to the new rationale contained in the appeal determination.
The District Court agreed, finding it “unfair” to require Mr. Claybrooks to request Sedgwick to approve his part-time job when he had already been denied benefits. The District Court also agreed that when the Plan administrator has a new reason for denial without providing a full and fair review violates ERISA’s procedural requirements.
ERISA requires that the Plan Administrator fully and fairly review your claim. If the Plan Administrator denies your claim and/or appeal for benefits based on a new reason, they are required to allow you to appeal again.
Our disability insurance attorneys have handled these types of wrongful denials from major insurance companies. ERISA-governed claims must follow the regulations, but that is often not what happens. If you or someone you know has been denied a short-term or long-term disability insurance claim, contact one of the attorneys today to discuss your options.
Help from a Lawyer with Expertise in Disability Insurance
Disability insurance law is complex. Hiring an experienced disability attorney is important. Because all disability lawyers at this law firm focus on disability insurance claims, we have expertise in disability insurance law.
That means we have:
- Experience with every major disability insurance company;
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- Recovered millions of dollars in disability benefits for clients;
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The firm can help at any stage of your disability insurance claim, including:
- Submitting a disability insurance claim;
- Appealing a long-term disability denial;
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Because federal law applies to most disability insurance claims, our lawyers are able to represent clients across the country.
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