Although it’s quite common for insurance companies to misrepresent Plan and policy provisions, it’s becoming more common for claims handlers to cite provisions from Plans and policies saying one thing, and then alleging it means another. I find this downright insulting that insurance companies actually believe claimants and insureds are too stupid to know the difference.
The most outrageous allegation I read recently in a Unum letter is that “a claimant does NOT have a Unum LTD Plan because the two parties to the contract are the employer and Unum.” Whoa…what? This has got to be one of the more outrageous claims a Unum representative ever made! The fact that this statement was made by a Lead Specialist is even more disturbing.
While it is true that the two parties of a Unum ERISA Group Plan are the employer and Unum, it is also true that the claimant is referred to as the “Plan Participant”, “the Beneficiary”, or the “Certficate Holder.”
Today, many Plans are contributory requiring employees to pay all or a portion of the premium. The “Certificate” section of a Unum Plan also “delivers” the Plan to the claimant and says, “…if the terms and provisions of the certificate of coverage (issued to you) are different from the policy (issued to the policyholder), the policy will govern.” To allege “Certificate Holders” do not have LTD ownership is absurd.
My point here is that while it is normal for insurance companies to distort and misrepresent policy and Plan language, Unum’s claims handlers are getting into ERISA issues that are way over their heads. For example, ERISA identifies Unum as a Plan Administrator and together with the employer are defined “co-fiduciaries”. In addition, most states have done away with “discretionary authority”, which also does not apply in most states.
Fiduciaries are expected to review claims in “good faith and fair dealing” and to decide “indeterminable issues in favor of claimants.” I guess Unum’s “Lead Specialist” just forgot about that part, or worse yet, didn’t know about it. There used to be a rule at Unum that claims handlers didn’t discuss ERISA or other contract issues with claimants/insureds since they aren’t trained in those areas.
More importantly, Unum’s legal counsel attempts to classify everything as subject to ERISA and they never wanted unknowledgeable claims handlers messing up chances to have state jurisdictions removed to ERISA federal jurisdiction. To allow claims handlers to provide ERISA and policy “adjudication” information that is essentially inaccurate is not responsible management or leadership.
Claimants and insureds do not always know when they are being scammed or told the wrong thing. However, claimants are really quick to pick up on the threat and accept the information as though it were the truth just by the way the letters are written.
Appearently, fear is easy to communicate, but truth isn’t. Unum’s claims handlers do what they are told by their managers, and have no idea how to adjudicate a Plan or policy. They just “think” they know.
Claimants who receive 6 page threatening letters from Unum should recognize the queue that something is amiss, and be ready to defend what is actually written in the Plan. Of course, the truth is easier to defend if you know what it is.
Claimants who do not have a copy of their Plan should immediately request one and compare all actual provisions against those cited in Unum’s letters. If the claims handler “interprets” or “misrepresents” a policy provision, it should be corrected for the record.
While Unum is the most prolific entity for misrepresentation, it is by no means the only insurer who does this. Mass Mutual, Met Life and Guardian are all close seconds to this same type of dishonesty.