Appealing a denial from The Hartford – is there a conflict of interest?

Long-term disability denials happen all too frequently. But if it happens to you, be aware of your right to appeal and your right to a neutral decision from the LTD Plan administrator. A lot of long-term disability providers, like the Hartford, are both the LTD plan administrator and funder, meaning they decide who falls within the meanings of the LTD policy and they are the ones paying out benefits to accepted claims.

This can create what is known as a conflict of interest. A conflict of interest is the existence of or a beneficial gain if one exercises their decision-making authority in an official capacity. Said another way, the LTD provider and funder have an incentive to deny claims to maintain profitability and gain a positive financial outcome by denying more claims than they accept. That is how insurance companies make money. This potential benefit to the LTD provider and administrator can taint the decision-making process both by appearance and in practice – whether intentional or not. So, if your LTD claim is denied, be on the lookout for this possible conflict of interest. If a conflict exists, it will have implications for what evidence you present when you appeal the decision and in subsequent litigation should you need to file a suit against the LTD provider.

When a conflict of interest exists, denial of your claim is put under a microscope of scrutiny because the Courts have recognized the power providers, like the Hartford, have can easily be abused – intentionally and even unintentionally. LTD providers with this conflict have an incentive to deny as many claims as possible to ensure profitability and financial protection despite the fine print of the policy.

California Courts have recognized the disadvantage such a conflict of interest creates when an LTD provider is both the administrator and funder of an LTD policy. So, when reviewing the discretionary decision-making process of an ERISA-based LTD provider, courts look more closely at denied LTD claims from providers, like the Hartford, to determine if a conflict existed in determining if benefits are warranted or not.

A separation of the administrator and funder or other steps to wall off administrators from financial interests would lessen this glaring bias. That is why including evidence of such a conflict is crucial in an ERISA lawsuit.

For instance, in Montour v. Hartford Life & Acc. Ins. Co. (2009) 588 F.3d 623, the Court found a conflict of interest existed because the Hartford was both the long-term disability policy administrator (reviewing applications and deciding if benefits are payable) and payor of the benefits. This is what is described as a “structural conflict of interest.” The Hartford, as both the LTD administrator and payor, created an incentive to save profits by denying more claims than they approve. The Court did not care if it was an intentional or unintentional conflict because the structure of having the Hartford administer and fund the LTD benefit made a structural conflict of interest. The Court said Plaintiff Montour could have and should have included this obvious conflict in the evidence presented in the ERISA lawsuit.

So, if you have a received a denial, and you are thinking of opening a suit against your LTD administrator, including evidence of this bias – and the fact that the LTD carrier didn’t fully acknowledge it – is not only relevant but critical to ensuring the court properly weighs the factors when determining if the LTD administrator abused their discretion when denying your claim.

To summarize, if your LTD claim is denied, you need to find out:

• Who is your Long-Term Disability benefits provider/carrier
• Who is your LTD administrator
• Are they from the same entity?
• If no, are they sufficiently different entities in that their financial interests are not grossly interconnected so as to wrongfully influence their claim decisions?

Obtaining long-term disability benefits can be essential after a debilitating injury or diagnosis. It can be scary to hear your claim has been denied when you are counting on that benefit to make ends meet. Getting the right information and support from a knowledgeable attorney can prove to be not only sensible but also incredibly reassuring.

When you initiate a claim under this coverage, you need to be aware of your rights and responsibilities, which may necessitate legal counsel. At Bonnici Law Group, we offer you client-centered representation at all stages of the long-term disability benefit claims process with the support of a team – all with no upfront fees. When you need the kind of help that only an experienced long-term disability benefits attorney can offer you, contact Bonnici Law Group at 858-261-5454 or help@bonnicilawgroup.com.