Unum Long Term Disability Claim Denial Scrutinized in Recent Appellate Ruling
The U.S. Court of Appeals, Ninth Circuit, recently remanded the long term disability case of Leah A. Bilyeu v. Morgan Stanley Long Term No. 10-16070 Disability Plan back to the U.S. District Court for the District of Arizona after the plaintiff appealed the termination of her long-term disability benefits under the Employee Retirement Income Security Act of 1974 (ERISA). Plaintiff Bilyeu also successfully challenged the district court’s grant of summary judgment in favor of First Unum Life Insurance Company on Unum’s counterclaim for restitution of overpaid benefits.
The appellate court ruled that the district court abused its discretion by dismissing this claim for failure to exhaust administrative remedies. The exhaustion requirement should have been excused because Bilyeu acted reasonably in light of Unum’s ambiguous communications and failure to engage in a meaningful dialogue.
Bilyeu was employed by Discover Financial Services from 1987 through April 2004. Morgan Stanley Long-Term Disability Plan (the Plan) provides benefits for long-term disabilities to Discover employees. Unum is the Plan’s claim administrator, and also the insurer and payor of Plan benefits.
Alleging she suffered from several medical conditions that prevented her from materially performing the duties of any occupation, Bilyeu filed a long-term disability (LTD) claim with Unum in April 2004. These conditions included Behçet’s disease, fatigue and anxiety. Unum approved the claim in October 2004. Under the Plan, benefits for disabilities arising from mental illness are limited to 24 months. Unum concluded that Bilyeu’s disability was subject to the mental illness limitation. Bilyeu disputed that conclusion.
A medical consultant for Unum called Bilyeu’s treating physician to discuss her medical condition as the 24-month timeline approached. The two medical professionals disagreed on the diagnosis and course of treatment. Unum then sent Bilyeu a termination of benefits letter, while also providing instructions on how the plaintiff should respond in the event she disagreed with the ruling.
Plaintiff did respond as instructed, however Unum never acknowledged the response. In November 2008, the plaintiff filed a complaint against Unum, alleging that Unum wrongfully terminated benefits under the 24-month mental illness limitation.
Click on the link to read the appellate court ruling in Leah A. Bilyeu v. Morgan Stanley Long Term No. 10-16070 Disability Plan.
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If you are a business professional who has suffered an unexpected disability through illness or injury, contact Fort Lauderdale disability lawyer Howard Kahn if your disability benefits are at risk. We can help you understand and protect your legal rights to disability benefits. Contact us online or by phone at 954-321-0176.