In the present case, Nancy Lyman (“Lyman”) was employed by Revere Public Schools as a school teacher. She eventually stopped teaching due to“chronic headache” and “sleep/memory/concentration/ reading/writing” issues. Through her employment, she was covered under both short term and long term disability plans that were administered by Unum Group and Unum Life Insurance Company (collectively, “Unum”). She subsequently chose to apply for both types of benefits. Unum initially opted to deny her claims because they were untimely. Lyman appealed, then she was again denied. That spurred her on to bring the instant suit.
The plan in question provided a specific time frame related to the filing of either a short term or long term disability claim:
“When do you notify Unum of a Claim?:
We encourage you to notify us of your claim as soon as possible, so that a claim decision can be made in a timely manner. Written notice of a claim should be sent within 30 days after the date your disability begins. However, you must send Unum written proof of your claim no later than 90 days after your elimination period. If it is not possible to give proof within 90 days it must be given no later than 1 year after the time proof is otherwise required except in the absence of legal capacity.”
Further, the elimination periods for short term disability and long term disability claims are 30 days and 180 days, respectively.
Lyman alleges that the last day of her job, June 24, 2014, is her disability beginning date. If that is so, the claim for short term benefits would have been due on October 23, 2014, unless she lacked the legal capacity to do so. The long term disability claim would have been due on March 22, 2015. However, Lyman actually filed in June 2015. The main question at hand is whether Unum should have denied Lyman an additional year to file for her claims because of the “possibility” language under the plan.
If it was “possible” for her to file, she filed late. If it was “not possible” for her to file, she would have been granted an extra year and her filing would have been within the requisite amount of time. The language of the plan itself grants Unum the authority to interpret the language contained within the plan, including determining what “possible” means. From the court’s perspective, it believed that Unum did not abuse its discretion by requiring proof of it not being possible for Lyman to file in a timely matter because the clear language of the plan indicated same.
Lyman argued that “Unum’s interpretation writes [the possibility] language out of the Provision, altogether” and that it did not look at whether it was possible to file a timely claim and instead focused on her legal capacity. However, Unum explained that its reason for her denial was based on the fact that Lyman’s assumption that she would go back to work was “not a reasonable basis for not timely filing a claim.” Further, it cited that her other activities during the period in question, such as filing for unemployment benefits and job hunting, seemed to imply that it was possible for her to timely file.
Lyman additionally argued that Unum’s decision was inconsistent with other determinations that it had made with similar policies. In Unum’s Benefit Center Claims Manual, however, there is a statement which says “[e]ach claim is unique and should be evaluated on its own merits. The actual policy governing the claim must be referenced.” In this case, Lyman had been referencing other policies that she as not covered by.
Lyman also claimed that Unum abused its discretion because it told her she was not covered by their policy and as a result of her medical condition. Yet, Lyman was the one who stated that she obtained the required documents to complete her application and failed to do so in a timely manner. Further, she did not provide any information as to how Unum was responsible for her delay to June 2015 and February 2016 to file her claims.
Regarding her medical condition, Lyman stated that “[her] medical condition prevented her from filing her disability claims in the 90-Day Period, as [she] explained to Unum during her August 13, 2015 call, her April 27, 2016 call  and in her statements provided to Unum.” The court stated that though she extensively documented her medical condition, Unum’s belief that Lyman was still able to timely file was supported by sufficient evidence. This includes her ability to pursue other activities during the time she should have filed. As a result of these findings, the court opined that Lyman’s claims related to this part of her suit were not persuasive.
Lastly, Lyman asserted that Unum abused its discretion because “Unum cannot demonstrate it was prejudiced by Ms. Lyman’s alleged late filing.” She relies on this allegation under Mass. Gen. Las. ch. 175 § 112 which states “[a]n insurance company shall not deny insurance coverage to an insured because of failure of an insured to seasonably notify an insurance company of an occurrence, . . . unless the insurance company has been prejudiced terribly.” However, the court believed that this statute did not apply to an ERISA claim.
“[W]hile the First Circuit does not appear to have addressed this issue, courts in this district have found that the Massachusetts notice/prejudice rule set forth in Mass. Gen. L. ch. 175 § 112 does not apply in the ERISA context. That is, the plan administrator can refuse to address an untimely claim without first establishing that [it] was actually prejudiced by the late filing.” Therefore, the instant court decided to fall in line with that jurisprudence. Overall, the court did not believe that Lyman met her burden of proof related to her claims. As a result, the court ruled in favor of Unum and against Lyman.[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]
Lyman v. Unum
Here is a copy of the decision in PDF: