Lawsuit Claims Unum Failed to Pay Full Disability Benefits

A South Carolina man filed a lawsuit against Unum and Provident Life and Accident Insurance Company in October alleging that the insurance company did not pay him the full amount of disability benefits he was entitled to receive. 

According to the Unum lawsuit, Steven Spencer worked for Service Master Consumer Services in South Carolina. Spencer was part of a group long-term disability benefit plan that all Service Master employees paid into in case of an injury or illness that might render them disabled. 

Spencer became disabled on Mar. 21, 2011, and was allegedly unable to work. At that point, he submitted a claim through his employer for his disability benefits. Unum determined that Spencer was indeed disabled and began to pay his benefits according to the long-term disability policy. 

The problem, according to Spencer’s disability benefits lawsuit, is that Unum has not been paying him the total amount that he is owed. “The defendants violated the terms of the aforementioned policy and underpaid plaintiff monthly benefits by failing to consider earnings as of the date just prior to the date of disability,” the Unum lawsuit states.

Spencer also said that Unum wrongly categorized part of his salary called “piecework” as commissions when in fact it is part of his regular pay. “The defendants’ calculation of the plaintiff’s monthly earnings was arbitrary, capricious, not in good faith, and unsupported by substantial evidence,” the Unum lawsuit says. 

Spencer argued that Unum simply did not hold up to end of the agreement by coming to “a self-serving interpretation” of the policy and by failing to properly determine his actual income. He is asking that Unum pay him the proper amount of disability benefits according to his true income from Mar. 12, 2001 until now and in the future. He is also asking for Unum to pay interest on the amount that has been withheld from him in addition to attorney fees and other costs. 

In his disability insurance lawsuit, Spencer claims that Unum violated the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is the federal law that dictates how employee benefit plans are supposed to operate. It requires insurance companies to provide coverage as agreed upon with their clients, according to the contract that was set up when the policy was implemented. It also allows policy owners the right to sue if they believe they have not been paid benefits that they are owed. 

“A civil action may be brought by a participant or beneficiary to recover benefits  due to him under the terms of his plan, to enforce his rights under terms of the plan or to clarify his rights to future benefits under the terms of the plan,” the law states. 

Unum is a large insurance company that provides employee benefits to 17 million Americans, including disability, life, accident and critical illness insurance during times of unexpected illness or injury that may require a prolonged absence from work.

In 1999, Unum merged with Provident insurance company, and almost immediately, several lawsuits began to come out against the large insurance company.

The Unum lawsuit is Steven M. Spencer v. Unum and Provident Life and Accident Insurance Company, in the U.S. District Court for the District of South Carolina, Florence Division.

If you or someone you know did not receive all of the benefits they should have as a customer of Unum Life Insurance Co. of America, legal options are available. Learn more and get a free legal consultation regarding a claim’s eligibility at the Unum/UnumProvident Disability Insurance Claim Denial Class Action Lawsuit Investigation. Experienced legal professionals are available to determine if you have case, so act now.