Unum policyholder Michelle O’Neill recently became well-acquainted with the alleged red tape Unum has become known for.  This alleged red tape also serves as the foundation for the growing number of bad faith insurance lawsuits being filed against Unum. O’Neill filed her own Unum bad faith lawsuit on Feb. 3, 2014.

Her employer contracted with Unum to provide long-term disability (LTD) coverage to full-time employees. O’Neill’s policy became effective on Aug. 1, 2008. According to her Unum lawsuit, “It is clear from the language of the policy that (her employer) and Defendant intended all employees who work in excess of thirty (30) hours per week to beneficiaries to the terms of the contract. The Policy expressly states that all employees who meet this standard are covered under the terms of the Policy and entitled to benefits.”

According to O’Neill, she falls into those standards. She “is an employee of Policyholder working in excess of thirty (30) hours per week and stood to directly benefit from the terms of the policy, thereby qualifying her as an intended beneficiary of the policy. A failure to recognize this right would compromise the purpose of the Agreement,” the Unum bad faith lawsuit states.

O’Neill isn’t the first person to claim that Unum has engaged in unfair practices.

There have been so many complaints about bad faith disability insurance denials by Unum that dozens of individual lawsuits and class action lawsuits have been filed. However, there’s a deeper history involved. CBS aired an exposé on Unum’s practices, revealing from former employees that there were financial incentives for those who closed the biggest claims. Additionally, the company has been reprimanded for refusing to take the considerations of any physicians but their own, which a court decided was illegal.

“The circumstances surrounding the Agreement between the parties, as well as their intentions, are such that recognition of Michelle O’Neill’s rights as a third party beneficiary is necessary to effectuate the intention of the parties in executing the Policy,” her Unum bad faith lawsuit says. According to O’Neill, her LTD coverage was fairly straightforward. She says that Unum “intended to give Policyholder (her employer) and full-time employees…all the benefits associated with the Policy.”

However, O’Neill alleges that she was denied when she became eligible for benefits. Like many LTD policies, “The Policy provides long term disability benefits to covered employees of the Policyholder in the event that they become disabled and are limited in performing the material and substantial duties of their regular occupation due to sickness or injury.”

O’Neill claims that, unfortunately, she came to fit that description. Her Unum lawsuit states that she began to experience health problems in January 2012 and was medically deemed by a doctor be “disabled and unable to perform the material and substantial duties of her regular occupation” on March 2, 2012.

The doctor’s medical reports have been included in her Unum lawsuit. When she became disabled, she “requested (Unum) to provide her with appropriate disability payments pursuant to the Policy, once she had exhausted her short term disability benefits.”

Copies of these requests have also been included with her claim. Around June 12, 2012, the doctor gave O’Neill her full medical records in an effort to ensure that she had all materials necessary for a seamless LTD claim.

However, “In a correspondence dated on or about August 10, 2012, Defendant denied benefits to [Plaintiff.]” She appealed. “In a correspondence dated on or about Sept. 6, 2012, Defendant again denied benefits to O’Neill after requesting and receiving additional documents to support her claim.”

O’Neill has included all reports and correspondence as part of her claim. Although she receives Social Security disability benefits, it doesn’t make up for her lost income. “On or about Dec. 20, 2012, O’Neill, through counsel, requested reconsideration of the denial, pursuant to the written Policy by sending a letter to Unum.”

A Last Effort

Like many Unum policyholders who allege they found out the hard way just what kind of challenges they faced, O’Neill has exhausted all other avenues when filing a lawsuit.

“On or about Feb. 5, 2013, [Plaintiff,] through correspondence with her counsel, was informed again that her claims and appeal were denied.” By this time, O’Neill has gone several months without the compensation she was used to.

According to the Unum bad faith lawsuit, O’Neill “is not eligible for benefits, despite her submission of medical records evidencing her disability that prevents her from performing the material and substantial duties of her regular occupation, which would entitle O’Neill to benefits under the Policy.”

She’s suing Unum for claim for benefits under the policy and is asking that the court declare Unum required to pay her benefits, and is also requesting related attorney and court fees.

The case is Michelle O’Neill v. Unum Insurance Company of America, Case No.: 2:14-cv-00149-CB, in the United States District Court for the Western District of Pennsylvania.