Most Denied Disability Insurance Claimants Win, but Not All Do

June 30, 2014, 1:30PM. By Gordon Gibb

Los Angeles, CAIt’s a proven fact that in most cases, disability insurance claims are almost always denied on the first try, often denied on the second attempt, but more often than not accepted and approved on the third attempt, on appeal. It’s the way the insurance industry appears to prefer to work. However, in spite of California Insurance Law, some claims are denied outright due to an interpretation that the claimant retains the capacity to work regardless of mobility issues, without any thought given to the potential pain that may stem from attempting to realize that limited mobility.

In this case, according to court records, the plaintiff had suffered the trauma of two serious car accidents. As a participant in a health benefits plan administered by Aetna Life Insurance Co., the plaintiff stopped working after the second vehicular accident and applied for long-term disability (LTD) benefits under California insurance law.

The claim was denied. No surprise there. Insurance companies deny claims more often than not. Critics cite this as a tactic designed to frustrate the claimant enough to drop the claim altogether, or drag out the process to the point where the claimant gives up all hope and withdraws the claim permanently.

In this denied disability insurance case, the plaintiff sued, alleging wrongful denial of the claim. A district court granted summary judgment in favor of Aetna, while denying the insurer the opportunity to claw back short-term disability benefits that Aetna held had been overpaid.

Appeals to the lower court ruling were launched by both sides.

As it turned out, an appellate court held that there was sufficient evidence suggesting that the plaintiff was not indeed disabled as the plaintiff claimed to have been. The Court noted that the plaintiff’s treating physician had determined there was sufficient range of motion following the second car accident for the plaintiff to perform sedentary activities.

The defendant sought counsel from three independent physicians retained by Aetna (and presumably paid for by Aetna), all of whom agreed the plaintiff was not sufficiently disabled due to knee and spinal injuries sustained in the motor vehicle accidents, to prevent the plaintiff from resuming some form of meaningful employment.

Based on the evidence, the appellate court ruled that the plaintiff lacked sufficient grounds to pursue a disability claim. The Court also held that Aetna had every right to claw back short-term disability payments that it thought were its due, from the plaintiff.

On the surface, therefore, it appears as if Aetna won handily, if it was a contest to begin with. Perhaps the plaintiff’s physical injuries and limitations pertaining to range of motion were insufficient to preclude the plaintiff from returning to work.

However, it was not articulated as to what job the plaintiff specifically worked at. Nor was there reference to any potential post-traumatic stress stemming from the two motor vehicle collisions, or any potential for serious pain originating with or resulting from any changes to range of motion the plaintiff had endured.

It is not known if this long-term disability denied claim will be appealed to a higher court. The case is Thurber v. Aetna Life Ins. Co., 712 F.3d 654 (2d Cir. 2013), cert. denied, No. 13-130 (U.S. June 9, 2014).