Plaintiff Sues Unum a Second Time Over Insurance Claim Denial

Even if you haven’t heard of Unum before, there’s a good chance it’s actually your long-term disability (LTD) provider—it’s one of the biggest, most popular providers in the United States and many employers use it as their go-to choice for employee coverage. It’s also involved in dozens of lawsuits alleging the company either denied legitimate disability claims or suddenly stopped payments without just cause.

At the core of many Unum lawsuits are allegations that the company denies claims without reason, stops payments when they shouldn’t, and generally make the entire claims process too frustrating for many people to handle. This occurs during a time when people are already struggling with traumatic events which have led to the need to file an LTD claim. Joseph Reid is the latest policyholder to find out about the company’s reputation the hard way. He filed his Unum lawsuit on Nov. 27, 2013.

According to the Unum lawsuit, Reid was an employee at Performance Systems International, and his employer had opted for Unum policies for all employees in 1991. He became disabled on Feb. 13, 1996 and began the claims process in a timely manner. However, “after denial of his claim, appeals of the claim denial, institution of litigation against (Unum) and subsequent reconsideration of (his) claim by a neutral claims administrator … his claims were ultimately approved.” In other words, Reid has already been through this process once before. “At all times since May 15, 2007, (Unum) has been paying long term benefits to Reid.”

However, the terms of Reid’s plan changed in recent years, and he’s found himself facing yet another battle with Unum over his benefits.

According to the disability insurance lawsuit, Unum “advised (Reid) of its new monthly benefit determination in letters of August 6, 2009, December 18, 2009, and March 2, 2010. In those letters, (Unum) contended that his monthly benefit was subject to offsets for Social Security Disability benefits, income earned by (Reid) for from actual work he performed for Planetary Systems Corporation, and dividend income received by (Reid) for PSC by virtue of the fact that PSC was a subchapter S corporation.”

Reid says Unum’s decision to reduce his monthly LDT income is wrong. He appealed their decision, stating that the dividend income was not “income earned” since he didn’t actually work for that money. “The reduction of (Reid’s) monthly benefit under the LTD plan … was without factual basis and contrary to the express terms of the plan,” reads his Unum lawsuit.

Unum denied Reid’s appeal on Nov. 29, 2010. He claims that Unum has wrongfully denied his appeal, wrongfully lowered his monthly benefit after years of receiving the same level of benefits, and he’s taking Unum to court to get the benefits he deserves. The terms of his plan clearly define income earned, and the dividend payments don’t correlate to the description that Unum itself has defined. Like many others, Reid has exhausted all other efforts and the only way to ensure the proper LTD payment is to take Unum (once again) to court.

Wrongful Acts

Reid says that Unum is in direct violation of the Employee Retirement Income Security Act (ERISA), and his lawsuit may be consolidated into Unum multidistrict litigation (MDL) down the road. Joining the MDL will ensure a faster resolution to his claim, but still allow him a trial by jury and unique look at his specific circumstances. However, Reid’s situation is somewhat unique since this will be the second time he’s going to court against the same company.

The Unum lawsuit is Joseph B. Reid v. Unum Life Insurance Company of America, Case No. 1:13-cv-01479-CMH-TRJ, in the U.S. District Court for the Eastern District of Virginia.

Were You Denied Disability Benefits?

If you’re struggling with an Unum claim, you might qualify to file an Unum lawsuit. Learn more when you visit the Unum/UnumProvident Disability Insurance Claim Denial Class Action Lawsuit Investigation. Submit your information and an attorney will be in touch with you if you qualify for a free Unum claim review.