Court: Prudential Delay Deciding Group Disability Insurance Appeal Violated Law
If you have disability insurance through your employer, the federal regulations that govern group employee benefits require your disability insurance company to adhere to stringent time requirements when you appeal a denied disability claim. The disability insurance company has 45 days to decide the appeal. Although they can get one 45 day extension (for a total of 90 days), they have to ask for that extension in writing and tell you why they need it before the original 45 day period expires. Their time to decide the claim appeal starts when your appeal is properly filed according to the insurance policy’s procedures.
However, insurance companies often take advantage of a provision that allows them to stop the clock from running on your initial claim if they ask you for “additional information necessary to decide the claim.” This does not apply to appeals, but many disability insurance companies take advantage of disabled claimants, by stopping the clock during appeals when they are not allowed to do so. For this reason, we monitor our clients’ claims for timely claim processing, and file suit if they miss their deadlines.
A recent case from the federal court for the District of Columbia, involving the large disability insurance company Prudential, shows how disability insurance companies take advantage of unsuspecting disability claimants and abuse the right to an extension. In Wiley v. Prudential Insurance Company of America, Prudential continued giving itself extensions to decide the appeal of Ms. Jeralyn Wiley’s short term disability termination. Prudential, without asking, “twice more extended the time in which Ms. Wiley could submit additional records in support of her appeal.” After granting itself the additional time, Prudential claimed that it was only tacking on the extension to provide Ms. Wiley with the gift of more time because it allowed for her to submit additional information in support of her appeal. Ms. Wiley rightfully took advantage of these delays and submitted more information in support of her appeal without tolling the deadline because “Prudential never invoked the 45-day extension, the regulation’s tolling provision never came into effect.”
The judge did not fall for Prudential’s tactic and applied the claims regulations strictly against Prudential, while giving Ms. Wiley the benefit of substantial compliance with the appeal procedures. the court held that just because Prudential gave Ms. Wiley more time to send in documents and she availed herself of that opportunity, Prudential’s clock did not stop. Prudential failed to decide Ms. Wiley’s claim, and she filed suit taking the position that the decision was untimely and the requirement that she appeal her claim had been fulfilled (in legal terms, the claim appeal process was “was deemed exhausted.”). The court held that a claim is deemed exhausted when it is not decided on time and there are no special circumstances to justify extension. It is crucial that the administrator invokes the time extension at the proper time, i.e. before its deadlines expires.
Your disability insurance company may not toll the deadline (stop the clock) to decide an appeal without properly requesting an extension of time to review the claim. If your insurance company does not properly give you a reason why it needs the 45-day extension before the original 45 days expires, but continues to delay its decision, you may continue submitting additional information in support of your appeal or you may proceed with filing a lawsuit.
Case: Wiley v. Prudential Insurance Company of America, No. 16-cv-00391, 2016 WL 4468155 (D.D.C. 08/24/2016)
If your employer’s group disability insurance company does not decide your claim appeal on time, contact our experienced ERISA attorneys to discuss your rights. Filing suit before the plan administrator issues issues a late decision may get you an advantage when you go to court. Call us at toll free nationwide at (866) 282-5260.