Published by the Pellegrin Firm September 28, 2019

Earlier this year, the U.S. Court of Appeals for the Fifth Circuit rejected a long-term disability insurer’s application of a pre-existing condition exclusion in Smith v. United of Omaha Life insurance Company. See blog post about that case here. In that case, the claimant was treated for a condition that turned out to be a symptom of ovarian cancer during the pre-existing condition look-back period, but at the time she was first treated for it, her doctors did not suspect ovarian cancer.

A recent decision from the U.S. Court of Appeals for the First Circuit in Boston went even further. Retired Supreme Court Justice David Souter was assigned to the appellate panel by designation. In this case, Lavery v. Restoration Hardware Long-Term Disability Benefits Plan, No. 18-1885, 2019 WL 4155038 (1^st Cir. Sept 3, 2019), Lavery was seen by a primary care doctor for a skin lesion on his back during the look-back period, and the primary care doctor was suspicious the lesion could be skin cancer. However, he did not treat him, provide drugs, or diagnose him with skin cancer, as doing so was beyond his field of expertise. The primary care doctor did, however, refer Lavery to a dermatologist to determine if the lesion indeed was cancer as he suspected. The court found that since Mr. Lavery was not diagnosed with cancer during the lookback period, he received no diagnosis or treatment during the lookback period, and he was not formally diagnosed with cancer until the lookback period was over, the language of the preexisting condition exclusion did not apply. The court affirmed the district court’s decision to award full benefits, interest on unpaid back interest, and attorneys’ fees.

Hopefully with decisions like these, long-term disability insurers will stop denying deserving claims for cancer patients on questionable applications of preexisting condition exclusions. Surely Mr. Lavery is grateful to have those back benefits now, but he probably really needed them during the early days of his cancer fight when he couldn’t work, as opposed to several years later. Help during difficult times is what long-term disability insurance is supposed to be for.