A recent decision from our neighbors in the Portland, Oregon federal courts emphasizes that insurance policyholders should always strive to submit claims as soon as possible – especially where the insurance policy is covered by ERISA.
Often, it’s not practical to submit insurance claims as soon as the loss occurs. When your house burns down, you’re critically injured, or have to stop working due to a disability, you’re often overwhelmed as it is without worrying about submitting insurance claims. For this reason, many legal rules apply that can entitle an insured to benefits under an insurance policy even if the insured delays in submitting their claim. These rules protect insureds from the otherwise-draconian result of losing insurance benefits they paid for due to a technicality.
However, the Oregon federal court’s recent decision in Gary v. Unum Life Insurance Company of America emphasizes that, sometimes, a delay in submitting insurance claims can completely eliminate the policyholder’s right to benefits, especially under ERISA.
Ms. Gary applied for Long-Term Disability benefits under an ERISA-governed disability insurance policy issued by Unum. Plaintiff, an attorney, had become disabled and been ordered by her doctor to stop practicing law as of December 1, 2013. But Ms. Gary waited until September 1, 2016 to make a claim for disability insurance benefits from Unum.
Unum ultimately determined Ms. Gary was disabled, but only from November 27, 2013 through April 6, 2015. Ms. Gary filed a lawsuit under ERISA, seeking disability benefits post-April 6, 2015. The dispute focused on Unum’s conclusion that Ms. Gary was essentially recovered from her disability following surgery in 2014.
The court upheld Unum’s denial of benefits after April 6, 2015. The court focused on the absence of medical information regarding Ms. Gary’s condition as of April 6, 2015. Critically, the court noted that it was impossible for a doctor to examine Ms. Gary in person and give an opinion about her medical condition that would be retroactive to April 6, 2015. The court emphasized:
because Plaintiff’s claim was not filed until September 1, 2016, there was no opportunity for an [examination] or other evaluation of [Ms. Gary] by [Unum] in the nearly three years from the date of alleged disability. And while the Supplemental Record submitted by [Ms. Gary] provided some new medical evidence, it did not clarify [Ms Gary]’s limitations in the months following her surgery and around April 6, 2015.
Of course, there’s no way to tell if the court would have reached a different result had Ms. Gary applied for benefits immediately after becoming disabled. But allowing a prompt medical evaluation following her surgery that could have armed her with additional medical information supporting her disability.
The Gary decision is an important reminder that it is always in the insured’s best interest to claim benefits promptly following a loss.