In Newsom v. Reliance Standard Life Insurance Company, 26 F.4th 329 (5th Cir. 2022), the U.S. Court of Appeals for the Fifth Circuit addressed a situation that comes up frequently in long-term disability cases. The issue was not whether the claimant was disabled, but whether the insurance company could avoid making that decision altogether.

The claimant had worked for years before his health began to decline. As his condition worsened, he reduced his hours and eventually stopped working. Reliance Standard denied his long-term disability claim by arguing that he was no longer working “full time” when his disability began and therefore was not covered under the policy.

The district court rejected that argument, and the Fifth Circuit agreed. The courts found that the policy language did not clearly support Reliance Standard’s position. Looking at how the policy was written and how the employer treated the claimant’s job, the courts concluded that he remained eligible for coverage when his disability began.

That did not end the case. Because Reliance Standard focused only on eligibility and never decided whether the claimant actually met the policy’s definition of disability, the Fifth Circuit sent the claim back. The insurer was required to evaluate the disability claim on its merits rather than rely on a technical coverage argument.

The decision serves as a reminder in long-term disability cases that insurance companies are expected to fully evaluate claims. When an insurer avoids addressing whether a claimant is disabled under the policy, courts may require the claim to be properly reviewed instead of accepting a denial based solely on technicalities.

The Pellegrin Firm is a Metairie, Louisiana law firm that represents long-term disability claimants in ERISA cases involving wrongful denials, benefit terminations, and procedural violations by insurance companies. The Pellegrin Firm represents clients throughout the New Orleans area and across Louisiana and can be reached at (504) 405-3245 or by email at info@pellegrinfirm.com.