Katie was a Customer Service Manager for a small web-based company (“Company A”) for several years. Her employer was acquired by a larger company (“Company B”) in July of 2016, but her job was not impacted by the acquisition. She kept her job, but technically became an employee of Company B. Her employee benefits, including her long term disability insurance coverage, were transferred to Company B’s benefits plan at the time the acquisition was completed.
For years, Katie had been struggling with numerous medical conditions that made it difficult for her to work. These conditions became progressively more severe over time, to the point that Katie became totally disabled and was forced to stop working in February of 2017.
Katie filed a claim for long term disability (“LTD”) benefits under the Prudential Life Insurance Company (“Prudential”) LTD policy provided by Company B’s group benefits plan. However, despite acknowledging that Katie was truly disabled, Prudential denied her LTD claim, arguing that Katie’s conditions were preexisting and therefore excluded from coverage under the LTD policy.
After her claim was denied, Katie hired O’Ryan Law Firm to appeal the denial. We reviewed her LTD policy and discovered that while it did exclude disabilities based on preexisting conditions, her conditions should not have been considered preexisting under the policy. This is because her policy contained what is known as a continuity of coverage provision.
LTD policies frequently exclude coverage for any disability arising within the first year of coverage if that disability arises from a preexisting condition. However, continuity of coverage provisions ensure that if a company transfers its employee LTD coverage from one insurance company to another, its employees’ claims will not be denied as preexisting conditions just because they were filed within the first year after the employer’s LTD coverage was transferred to that insurance company.
When we filed Katie’s appeal, we included documentation from Katie’s employer showing that she had been covered under Company A’s LTD policy for several years up until the acquisition by Company B, at which point she became covered under Company B’s LTD policy. As a result, although her claim was filed in the first year she was covered under Company B’s policy, the continuity of coverage provision protected her from being denied based on the preexisting condition exclusion.
After reviewing our appeal and the supporting documentation proving that Katie was not subject to the preexisting condition exclusion, Prudential overturned its previous denial of her LTD claim and began paying Katie’s benefits, including full back benefits dating back to the date she first became eligible under the LTD policy. If you are disabled and have been denied benefits based on a preexisting condition exclusion, please contact the O’Ryan Law Firm for a free consultation.