A Colorado woman who allegedly suffered a head injury, is suing Unum Life Insurance Company over their denial of her long-term disability benefits.

Plaintiff Tawny M. is the beneficiary of an employee long-term disability plan administered by Unum. The insurance plan provides benefits for employees who are “disabled” under the terms of the plan, defined as someone who is “unable to perform the duties of any gainful occupation for which the employee is reasonably fitted by training, education or experience,” according to the Unum lawsuit.

Tawny applied to Unum for disability benefits based on her traumatic brain injury. She alleges the injury causes cognitive dysfunction that “prevents her from reasonably comprehending written documents, keeping track of dates, or organizing information” and also causes both short and long-term memory loss. The plaintiff further claims the disability restricts her physical abilities to lift, walk, stand, and sit.

Tawny alleges she has been in receipt of Social Security Disability Benefits due to her complete inability to work. To back up her claim, Tawny submitted medical records and statements from her treating physicians, arguing that she is totally disabled.

Unum denied Tawny’s disability insurance benefits claim, then affirmed that denial during the review process. When Unum sent her their final letter of denial, Tawny claims she was unable to make a timely response due to her lack of mental capacity. She cites her disability as a reason not to bar her Unum bad faith insurance claim under the Colorado statute of limitations.

Tawny’s Unum lawsuit alleges Unum’s actions violated her rights the federal Employment Retirement Income Security Act, or ERISA. The plaintiff is asking the court to award her past denied benefits, as well as a an order to reinstate current and future payment of ongoing benefits. Tawny is also seeking an award of attorneys’ fees and costs incurred in bringing this disability insurance lawsuit against Unum.

The Unum Disability Benefits Lawsuit is Case No. 1:15-cv-00875-NYW, in the U.S. District Court for the District of Colorado.

The Employment Retirement Income Security Act

ERISA is a federal law designed to protect beneficiaries’ rights under certain private pension funds. Years of court decisions have expanded its reach to also cover other employee benefits like the long-term disability insurance that Tawny’s employer provided. Under ERISA, companies like Unum that administer certain private employer’s benefit plans take on a set of responsibilities known as fiduciary duties. Their overall fiduciary responsibility is to administer the plan for the benefit of plan participants and for the exclusive purpose of paying benefits.

When an administrator of an ERISA-covered plan denies a claim, ERISA entitles the claimant to a “full and fair review” of the denial. In practice, this tends not to result in reversal of the denial, but instead is more of a required procedural step on the way to filing a disability insurance lawsuit.

The downside of ERISA for beneficiaries is that, as a federal statute, ERISA preempts some states’ consumer insurance laws that cover group disability insurance, effectively decreasing beneficiaries’ rights from what they would be under state law. So while one state’s law may provide for punitive damages in a case of “bad faith” denial of coverage, ERISA would preclude the beneficiary from receiving punitive damages if the plan is governed by ERISA. Damages under ERISA are limited to past benefits, interest, costs of litigation, and possibly attorneys’ fees.