In a recent case, the Court saw through the thinly veiled disguise of the old game of delay, so often used to withhold benefits from long-term disability claimants. Splitting up decisions and requiring multiple appeals or challenges over the same claim is an unreasonable and unlawful claim process. Hartford felt it was not the old game of delay, but rather “flexibility” to manage claims. However, this was at the expense of the claimant. So, the question is how long DOES it take to receive a disability determination decision under review?

Facts of the Case:

• Mr. McQuillin received a diagnosis of prostate cancer while working for a medical technology company.
• Unfortunately, he suffered side effects from the treatment, which prevented him from continuing to work his job.
• His company provided a good benefits package, including long-term disability, so he was encouraged to file a claim for benefits.
• Mr. McQuillin filed his claim, but after a few months, Hartford failed to pay the claim stating there was not enough proof of loss to evaluate his disability claim. It claimed it was missing certain medical records.
• The letter provided Mr. McQuillin the right to appeal the decision, so that is what he promptly did, within the time allowed.
• About two weeks later, Hartford sent a letter saying that it had reversed the original decision, and the matter was sent back to the claims department. It would review the information and determine if Mr. McQuillin was disabled and render a new decision.
  • Hartford was required by the claim procedure regulation and its plan document to make a decision within 45 days of its receipt of Mr. McQuillin's appeal.
• Hartford decided within that time in its appeal department, but the decision only pertained to whether there were enough medical records and information to decide the claim.
• However, it split off the decision as to whether Mr. McQuillin was disabled as well as the amount of the benefit, and referred those back to the claim department.
• Forty-six days went by since the submission of his appeal, and he still did not have a benefit check. Hartford's claim department had not made another decision.
• Mr. McQuillin filed a lawsuit on day 46.
• A magistrate judge heard the matter and decided that McQuillin had not exhausted his claim remedies, and his report indicated that his lawsuit should be dismissed.
• The district court agreed with the report and dismissed Mr. McQuillin's lawsuit, forcing Mr. McQuillin to file an appeal with the Second Circuit Court of Appeals.
• Mr. McQuillin argued that Hartford was required to strictly adhere to the claim procedure regulation requirements, which mandated the final decision within 45 days of the receipt of his appeal.
• Hartford argued that it did decide on the matter appealed, but that it did not have to make a complete decision since the claims department had not issued a decision on any other matter other than that there was not enough information and there were missing medical records.

What is a “Disability Determination?”

The Second Circuit found that the text of the regulation was clear. A benefit determination was due to be made within 45 days of the receipt of the appeal. However, it found that the regulation does not separately define the term “benefit determination.”

• Webster's Collegiate Dictionary defined the word “determination” as “a judicial decision settling and ending a controversy.”
• Black's Law Dictionary likewise noted that “determination” was the act of deciding something officially, such as a final determination by a court or administrative agency.

Hartford urges the second entry of Webster's, which said that a determination was merely “the resolving of a question by argument or reasoning.” It argued that it had the flexibility to decide but then continue with an internal review as to matters that had not been determined.

The court found that Hartford was reading out of the regulation the word “benefit.” The requirement was not to make a piecemeal determination but a determination that included the right to receive benefits.

The court found that the word “determination” suggests finality and not piecemeal decision-making. The court held that the regulation required the Hartford appeals unit to comprehensively resolve the claim.

When the claim process is not conducted reasonably and fairly, then no deference should be afforded to such a claim decision. Hopefully, it will go well for Mr. McQuillin. The Second Circuit sent this case back to the district court to proceed with the case consistent with the opinion. This illustrates why it's so important to hire an experienced ERISA long-term disability attorney at The Martin Law Group at the outset of a claim and/or denial, so we can spot games like this one being played by insurance companies.