Recently, we went over the various kinds of standards of review you can expect for your disability claim if you are denied and have to fight the decision in court. There’s what is known as de novo review, where the court agrees to act as if the insurance company’s original decision never occurred and approach the disability evidence without bias. And then there’s a deferential review, where the court gives a varying amount of weight to the insurer’s decision depending on whether their standard of review is arbitrary and capricious or abuse of discretion.
Generally speaking, both standards put the claimant at a disadvantage because the court is essentially assuming that the insurer is right until proven wrong. Unfortunately, claimants can’t just choose the standard of review that they want to use.
How is the Standard of Review Decided?
Current law is both straightforward and a bit complicated on this issue. The applicable Supreme Court decision most often used says that all challenges to claims denials should be reviewed under a de novo standard – unless the actual plan language states that “the administrator or fiduciary discretionary authority” is allowed to determine eligibility or interpret the plan.
Basically, some plans have clauses that offer an “out” to insurers by saying that someone can decide that you don’t really get the benefits outlined in your policy for whatever specific reason they believe applies.
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But we say this is a bit complicated because at least 25 states have attempted to restrict or even ban discretionary authority in ERISA plans and there are a number of legal battles going on right now where a major sticking point is whether or not discretionary authority can be exercised.
So, how can you know whether you’ll be facing a more claimant-friendly de novo review or one that’s deferential? You can try to read through your plan and applicable state laws to learn what’s going on, but the best way to make sure you’re getting the complete, accurate picture is to talk with an experienced law firm that focuses on long term disability insurance claims. Learn more about disability plans in general in our free eBook. Be sure to check back weekly for more blogs that offer information on how you can win your long term disability insurance claim.
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