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Long-term disability benefits denied due to cutoff

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Many people from one side of the country to the next rely on long-term disability benefits to get by as they are recovering from an injury or illness. While some people purchase this type of coverage on their own, others rely on an employer to supply them with a policy. Our California readers, as well as those throughout the rest of the country, will find this story interesting as it pertains to both long-term disability coverage, as well as the denial of benefits.

The Supreme Court recently ruled that a contractual limit on suing over health insurance benefits is legal. The ruling was against a former Wal-Mart employee who filed for long-term disability benefits through her insurance provider, Hartford Life & Accident Insurance Co. She had been diagnosed with fibromyalgia and lupus. She initially filed for benefits in 2005 and was denied two years later in 2007.

As a result of the denial, she sued the insurance company in 2010 in federal court, hoping that this would allow her to receive the benefits. According to Hartford, however, her claim had to be filed within three years, which meant she missed the deadline.

Despite the fact that the Employee Retirement Income Security Act does not have a time limit attached to it, the judge stated that according to the court, the contract is enforceable. The judge noted, "a participant and a plan may agree by contract to a particular limitations period."

Long-term disability benefits can be very helpful and in some cases, prevent a financial downfall. When a company refuses to pay the benefits that an employee is due, legal action may be necessary. It is, however, wise to be aware of the time limitations that may be in effect.

Source: ABC News, "Politics Court Says Health Plan Lawsuit Cutoff Legal" No author given, Dec. 16, 2013

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