In this recent case out of Louisiana the court rejected Cigna’s (Life Insurance Company of North America) efforts to deny a claim by a man who was permanently paralyzed and wheelchair bound. The claimant, Mr. Hughes, had been employed as an electrician when he was forced to stop working as a result of his paralysis. While Cigna initally approved his claim for LTD benefits in 1999, what followed was very troubling.
Despite the fact that he was permanently paralyzed and wheelchair bound, Cigna denied his claim for benefits on at least 4 different occasions. The last denial because he “failed to provide requested documentation.” After the last denial Mr. Hughes failed to file an administrative appeal within 180 days as the denial letter advised. When he finally did appeal, Cigna denied the appeal as untimely.
Mr. Hughes hired an attorney who filed suit claiming that the actual Insurance Plan did not mandate an appeal within 180 days. The Court agreed rejecting Cigna’s argument that Mr. Hughes administrative appeal was untimely. The Court then found:
It is undisputed that Hughes is permanently paralyzed. He is in frequent pain, suffers from additional complications arising from his injury, and has not shown substantial medical improvement. It is obvious he will never return to his work as an electrician. Despite this fact, LINA has denied his permanent disability benefits on at least four different occasions. This alone suggests “procedural unreasonableness.” However, this is not the only troubling aspect of LINA’s denial in this case. After terminating disability benefits for a permanently paralyzed policyholder, LINA relied on the 180-day limit for filing an appeal to bar Hughes’s claim—despite the fact that 180 day limit is not located anywhere in the policy. Like the insurer in Schexnayder, LINA did not address Hughes’s permanent paralysis or the Social Security Administration’s award of permanent disability benefits. This suggests procedural unreasonableness. See Schexnayder, 600 F.3d at 47071.
This claimant was extremely fortunate to find capable counsel to overturn the denial decision. This case provides some insight into how a disability insurance company utilizes procedural rules to deny an otherwise clearly meritorious claim.