Years ago, the United States Supreme Court made the decision to allow insurance companies to “reserve discretion” for benefits available under disability insurance plans sponsored by employers. If you see the phrase, “we have discretion to determine benefits,” in your policy, you need to recognize that these are dangerous words.
This discretionary clause often causes big problems for people applying for benefits. Basically, the Supreme Court’s ruling gave insurance companies the power to add this clause into their own policies, which in essence, makes their decisions nearly irreversible by courts. If you are looking to file a claim for long-term disability benefits in federal court, you need to keep in mind that you are not on a level playing field with the insurance company.
When you take the insurance company to court because you were found not to be disabled, you have a huge obstacle to overcome. It is not going to be easy to bear that heavy burden.
This discretionary clause is not required by the law and unfortunately, many employers do not understand the impact it has on their employees. Employers need to insist that these clauses are not in their long-term disability policies.
Have you been denied? Give us a call to discuss your legal options.