A Michigan man has asked a federal court for help in getting his Unum long-term disability benefits.

Plaintiff James J. says that before and until June 2014 he worked for Cummins Inc.

As a Cummins employee, James was eligible for employer-sponsored Unum long-term disability insurance coverage.

When James developed an unspecified disability, he was no longer able to work, he alleges. He filed an Unum long-term disability claim.

Unum denied that claim. The company upheld that denial after James sought an internal appeal.

Now, having exhausted all his administrative remedies with the company, James is bringing this Unum long-term disability lawsuit under ERISA, the federal Employee Retirement Income.Security Act.

James alleges Unum operates under a conflict of interest that significantly influenced its decision on his claim.

He points out that defendant Unum Life Insurance Company of America is both the insurer of the plan and the sole entity responsible for making decisions on claims. He also says that in denying his claim, Unum relied on “biased information and flawed expert opinions.”

James says the evidence submitted in support of his claim for disability benefits does not support the company’s denial. He believes the company ignored relevant evidence that would support a grant of benefits.

Using ERISA to Get Unum Long-Term Disability Benefits

ERISA, the law James has based his lawsuit on, was originally passed back in the 1970s for the protection of employee’s retirement and other benefits. Employee advocates familiar with the law now say that after several decades of legal developments, ERISA is now much more favorable to insurance companies than it used to be.

ERISA applies to employer-sponsored long-term disability benefits insurance policies like the one James got through his employer Cummins.

That means that a claimant who appeals a denial of a disability claim under such a policy has to follow the procedures dictated by ERISA, which may ultimately require filing an ERISA lawsuit in federal court.

ERISA preempts several state laws that would otherwise apply to certain disability policies. These state laws still apply to policies that are not governed by ERISA – policies that a purchases privately without employer sponsorship, for example.

Compared to these state laws, ERISA is less claimant-friendly on several points. One frequently determinative factor is the standard of review a judge applies when evaluating an ERISA appeal.

Generally, if the language of a policy gives the insurance company discretion to make decisions on claims, the court will respect that discretion by applying the “arbitrary and capricious” standard. Under that standard, denials are generally upheld unless the company made a clear and irrational error.

But with help from a skilled ERISA lawyer, a claimant may be able to get a more claimant-friendly standard of review.

In cases where the plaintiff can show the insurance company made its denial under a significant conflict of interest, courts will review a claim “de novo” – that is, without any regard to the insurance company’s denial or the reasons behind it.

For that reason, ERISA claimants like James often allege that Unum operates under just such a conflict, since it acts as both the fiduciary of the plan’s funds and the entity that makes decisions on claims.

James’s Unum Long-Term Disability Lawsuit is Case No. 6:17-cv-00049, in the U.S. District Court for the District of South Carolina.