Oregon Long-Term Disability Denials

Salem, ORRegardless of whether you live in Oregon, California or New York, there is a chance you could have your long-term disability claim denied. Insurance companies such as Unum, CIGNA and others have faced lawsuits alleging they improperly denied legitimate insurance claims. When an Oregon long-term insurance claim is denied, residents may be able to file a lawsuit - or at least an appeal - to have the decision reversed.

Disability insurance is intended to protect workers from financial hardship if they suffer an injury or illness that prevents them from working for long periods of time. In many cases, short-term disability kicks in first, either helping people through a short-term injury or providing assistance before long-term disability takes effect.

Long-term disability is different from workers’ compensation because long-term disability covers a person who is prevented from working by injuries or illnesses that occur off the job. Workers’ compensation only replaces lost income for illnesses or injuries that occur while the person is working. So if a person breaks his leg while at home, workers’ compensation will not cover him, but long-term disability, depending on the terms of the insurance, will.

According to a report from the Consumer Federation of America and Unum, titled “Employer-Sponsored Disability Insurance: The Beneficiary’s Perspective,” fewer than five percent of disability accidents and illnesses are work-related. “The other 95% are not, meaning workers’ compensation doesn’t cover them. Furthermore, approximately 90% of long-term disabilities are caused by illnesses rather than accidents,” the report states.

Long-term disability insurance is either purchased by the individual or provided through an employer. If it is provided through an employer, it is considered an employment benefit and is governed by ERISA (Employee Retirement Income Security Act). When an insurance claim covered by ERISA is denied, the claimant must first exhaust the insurance company’s appeals process before filing a lawsuit. Even if a lawsuit is eventually filed, there are limits on what damages the claimant can file for.

Despite the report from Consumer Federation of America and Unum finding that one in four 20-year-olds will become disabled and unable to work before age 67, many people report having difficulty getting their insurance claim approved. Lawsuits have been filed against companies such as Unum, CIGNA and other insurance companies alleging they routinely denied or delayed paying legitimate claims.

In 2013, CIGNA and the California insurance commissioner announced a settlement that would end a lawsuit alleging the company improperly denied legitimate claims. An investigation reportedly found that the company did not give proper attention to the recommendations of independent physicians and did not give proper consideration to documentation in workers’ compensation records.

As part of the settlement, CIGNA agreed to review certain claims that were reportedly not handled properly.