Disability Insurance Companies Denying Disability Insurance Benefits When Social Security Disability Was Approved

The United States Supreme Court ruled that insurance companies have a conflict of interest when they decide disability insurance claims that they themselves pay out.  In the case of Metro. Life Ins. Co. v. Glenn, 128 S.Ct. 2343, 554 U.S. 105 (2008), the Supreme Court found that there is a conflict of interest when an insurance company both decides whether or not to accept or deny a claim for disability benefits and also be the entity to either pay those benefits or save money by not paying those benefits.  

Most disability insurance plans have a requirement that if someone gets their claim for disability insurance coverage approved then that individual must also apply for Social Security Disability benefits.  Usually the insurance company itself pays for a law firm or company like Allsup to represent the individual in applying for Social Security Disability benefits.  Then if that individual gets accepted for Social Security Disability benefits, then the disability insurance company is entitled to set off whatever the individual receives from Social Security from the amount they have to pay in disability insurance benefits.  For example, if an individual is receiving $2,000 per month in disability insurance benefits and then they get approved for $1,500 per month in Social Security Disability benefits, then the disability insurance company gets to set off the SSDI benefits and only pay $500 per month.  

In Metro. Life Ins. Co. v. Glenn, the individual got approved by Metlife for long term disability benefits.  But then Metlife required the individual to apply for Social Security Disability benefits.  The individual was found to be permanently disabled and approved for Social Security Disability benefits.  Then when the disability insurance plan changed the definition of "disabled" after 24 months from 'unable to work at the employee's former job' to 'unable to work at any job,' Metlife denied the individual saying they could do sedentary work.  The Court found that the disability insurance company had a conflict of interest because they both decided when to accept or deny the claim for disability insurance benefits and they pay out those disability insurance benefits or save money by not paying them out.  The Court found that Metlife never properly reconciled their own conclusion that the individual could work other jobs with the Social Security Administration's conclusion that the individual couldn't work any other job.

When an individual is approved for SSDI and denied by their disability insurance company, the Court will look with a more scrutinizing eye at the insurance company's decision to deny disability insurance benefits.  

If your disability insurance benefits have been denied you should contact an ERISA disability insurance attorney.  Attorney Evan T. Engler is an ERISA disability lawyer and partner at the Columbus, Ohio based law firm of Harris & Engler.  Attorney Evan T. Engler helps individuals who have had their disability insurance benefits denied in Ohio, or the other Sixth Circuit states of Michigan, Kentucky, and Tennessee.
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