If Long-Term Disability (LTD) coverage is offered through an employer-sponsored program available at your place of employment, most group LTD plans will contain a “pre-existing condition” exclusion. These types of policies are not underwritten for each of the individuals in the group, so pre-existing condition exclusions are designed to prevent the insurance company that funds the group LTD plan from insuring someone who immediately presents a claim as soon as their coverage takes effect. The insurance company does not look at the medical history of every member in the group before insuring them, so the company does not know what the risk is of providing each individual with insurance coverage. Insurance companies want to avoid paying out claims to people who obtain employment with the sole purpose of securing LTD coverage so they can immediately make a claim.
Have you made a claim for LTD benefits within the first 12 months after you became insured under your employer’s group disability plan?
The pre-existing condition exclusion will apply if you make a claim for LTD benefits within the first twelve months after you become covered under the plan. While this time period could vary, typically it is the one-year period after the effective date of coverage. If you submit a claim for benefits within this one-year time frame, that will trigger a “pre-existing condition investigation” by the insurance company.
What is a Pre-Existing Condition Investigation?
The insurance company will review all the medical information provided in support of your LTD claim after receiving an application for benefits. If the medical records demonstrate that you consulted with a doctor, had treatment, were prescribed medication, and/or had diagnostic testing, for symptoms related to your disabling medical condition (physical or mental) during the specified time before your LTD insurance went into effect, the insurance can deny your claim based on the pre-existing condition exclusion.
The purpose of a “pre-existing condition investigation” is to evaluate your health just before you’re the effective date of your LTD coverage. This will involve a request for all medical records for the relevant time period. The time period will vary depending on the policy (so be sure to check the specific policy wording in your policy), but it is usually for the period 90 days prior to the effective date of your coverage. For example, if your coverage became effective on January 1, 2023, the insurance company will look back at the window between October 3, 2022, and December 31, 2022. This period of time is what is typically referred to as the “look back window.”
Determining Whether a Condition Will Be Excluded as “Pre-Existing” is Not Always Clear.
In 2019 and 2020, we represented an individual who had a long psychiatric history that included evaluation and treatment related to attention-deficit/hyperactivity disorder (ADHD), generalized anxiety disorder, and insomnia. He in fact saw a psychiatrist related to these conditions during the 90-day look-back window so the insurance company denied his LTD claim on the basis that his claim was excluded by the pre-existing condition provision in the applicable policy.
During the administrative appeal process, we provided the insurance company with medical documentation establishing that the current LTD claim being pursued was based upon impairment(s) caused by major depressive disorder and agoraphobia. We convinced the insurance company that while our client did have a significant psychiatric history, he did not consult with a mental health professional or seek any treatment or evaluation for major depressive disorder and/or agoraphobia during the 90-day look-back window. The insurance company reversed the decision to deny the claim based upon the application of the pre-existing condition exclusion and paid the claim.
If you are dealing with a denial of LTD benefits because the insurance company determined that a pre-existing condition clause in the group LTD policy excludes your claim, please contact attorney Kevin M. Zietz for a free consultation.
