Most group long-term disability (LTD) policies contain exclusions. One of the most common exclusions is the “pre-existing condition” exclusion. In this article I am going to examine the typical wording of a pre-existing condition exclusion in a group LTD policy and what you should do if your LTD claim is denied on the basis of of a pre-existing condition exclusion.
As with all LTD policies, your policy is a contract between your insurance company and the policyholder (in a group policy, the policyholder is your employer). Therefore, it is important to examine the specific wording of the policy and how it applies to the facts in your case. If your claim was denied based on a pre-existing condition exclusion, your denial letter from the insurance company should include the exact policy wording that the insurer is relying on to deny your claim. If the wording was not included in your letter, you will need to request a copy of the policy (the policy is not the same as your benefit booklet, which is a summary of the policy, and may not include the pre-existing exclusion clause or the wording may differ) from your employer or from the insurance company.
The pre-existing condition exclusion will usually only apply if you make a claim for disability benefits within the first year after your coverage took effect (this time period could vary, but it is typically it is the one year period after the effective date of coverage). If the insurance company determines that you saw a doctor or had any treatment related to your disabling condition prior to when your insurance took effect, it can deny your claim based on the pre-existing condition exclusion.
The purpose of the pre-existing condition exclusion in group policies is that these types of policies are not underwritten for each of the individuals in the group. In other words, the insurance company does not know the medical history of the individuals in the group at the time they become insured and as such they do not know what the risk is of providing each individual with insurance coverage. Essentially, the insurer wants 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 for LTD. Therefore, if you have an illness at the time your LTD coverage takes effect, you may be excluded from benefits if you become disabled within the first year of your coverage. If, however, you are able to work for longer than a year after your coverage took effect, the pre-existing condition exclusion cannot be applied and the insurer will proceed to assess your case, irrespective of the fact that you had the condition in the months or years prior to your coverage.
If your claim is caught by a pre-existing exclusion, your insurance company will likely conduct an investigation into your health prior to your effective date of coverage. This will involve a request for all medical records for the relevant time period. The time period will vary depending on the policy (again, remember 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, although it could be much longer. Sometimes, there might also be wording that says that the exclusion does not apply, if there is a specific period during which you did not receive any treatment for the disabling/pre-existing condition.
If the insurance company determines that you had any symptoms, were diagnosed, consulted a physician, or were being treated before the effective date of coverage for the same illness (or even a related illness) for which you are now claiming for LTD benefits, it will deny your claim. Generally the key issue is whether the condition for which you are making an LTD claim is the same or “related” to a pre-existing condition. It is often difficult to determine whether or not your disabling condition is “related” to the prior condition – this is subject to interpretation by the insurance company, the insurer’s doctors and your doctors. It is also, often the main issue in a lawsuit for LTD benefits.
Not only are there often differing views as to whether the pre-existing condition and the disabling condition are “related”, but also what constitutes “treatment”, “consultation with a physician”, “symptoms” and “diagnosis”. While the policy wording may define these terms, these too are subject to interpretation and open for argument in litigation.
For example, an individual makes an LTD claim for anxiety and panic disorder. The claim is made within the first year of her coverage. She has a long history of depression (perhaps it has come and gone over months and years), but she has never suffered from anxiety or panic and has been able to work continuously with her depression. She may have been taking an antidepressant medication prior to the date of her coverage. She may even have been receiving periodic cognitive behavioural therapy to assist her with the symptoms of depression. Then at some point during the year, perhaps due to a triggering event, a family trauma or a workplace issue, she develops severe anxiety and starts having panic attacks. She is unable to continue to work and submits a disability claim for anxiety and panic. The insurer denies her claim based on the pre-existing condition exclusion, arguing that depression and anxiety are related conditions. They may say that the medication she was taking or the therapy she was receiving is also used to treat anxiety. Of course, in a case like this the issues of whether the conditions are related and if the individual was receiving treatment for her disabling condition during the pre-existing condition period, are up for interpretation.
Thankfully, in cases such as the example above, where there is some ambiguity in the policy wording, the Courts tend to find in favour of the claimant. One example is the recent Alberta case, Tyson v. Holloway*, in which the plaintiff was undergoing investigations prior to coverage and a diagnosis of a brain tumour was made three days after coverage began. In this case the Court determined that the wording of the pre-existing condition exclusion was ambiguous and was therefore construed in favour of the plaintiff.
If your LTD claim is denied based on a pre-existing condition exclusion, remember to read your denial letter carefully to understand the exact wording of the exclusion in your policy. In most policies, a pre-existing condition investigation will only be conducted if you make a claim within the first year of being insured.
Remember that the interpretation of whether or not your disability is subject to the pre-existing condition exclusion is not black and white. These cases often turn on the specific facts of each individual case as well as on the specific wording of the policy and this area of law is highly nuanced. If you believe that your claim has been wrongly denied on the basis of a pre-existing condition exclusion, you should speak with an experienced lawyer specializing in disability litigation. This is a highly technical denial that will require the expertise of counsel experienced in litigating pre-existing condition exclusion cases.
MK Disability Lawyers has over 20 years experience between its two partners, litigating long-term disability claims. We are provide expert, personalized legal representation to disabled clients whose claims were denied for any number of reasons at any stage in a claim, including claims denied based on a pre-existing condition exclusion. Please contact us at info@MKDisabilityLaweyers.com if you have any questions or to request a free consultation.
The preceding is not intended to be legal advice. This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog, you understand that there is no solicitor client relationship between you and the blog publisher. The blog should not be used as a substitute for competent legal advice from a licensed lawyer in your jurisdiction. If your disability claim has been denied and you require legal advice, contact a lawyer specializing in disability law.
*Tyson v. Holloway, 2016 ABQB 284.