Fifth Circuit Court Reverses Summary Judgment in Favor of Insurance Company, Finds Transfer Provision to Include Coverage for Employee on Long-Term Disability

Long-Term Disability

For more than thirty years, Michael Miller has worked as a ship pilot for Lake Charles Pilots, Inc., or LCP, based in Lake Charles, Louisiana. During the summer of 2015, Miller was placed on short-term disability and remained on disability until July 2016. Miller was cleared and scheduled to return to work on November 4, 2015, but re-injured himself before he could go back to work. During Miller’s time off with short-term disability, LCP changed insurance providers, switching from Prudential to Reliance on September 1, 2015. Reliance approved short-term disability for Miller when he re-injured himself in late October 2015 but later claimed this was a mistake. After returning to work in July 2016, Miller injured himself again in August 2016 and was approved for short-term disability. After realizing his injuries would require more extensive time off than his short-term disability policy covered, Miller applied for long-term disability. Reliance denied this claim and reasoned that Miller was only covered under his policy after the first month following his return to work in July 2016. Reliance determined that Miller’s injuries in August 2016 were the same injuries he had incurred previously and that his injuries qualified as a pre-existing condition, which are not covered under Reliance’s long-term disability plan. Miller appealed Reliance’s decision citing coverage under Reliance’s Transfer of Insurance Coverage Provision. When Reliance failed to provide a decision on the appeal in a timely manner, Miller sued the company in district court under the Employment Retirement Income Security Act (ERISA). The court ruled in favor of Reliance and the court issued summary judgment. Miller appealed the court’s decision. After reviewing Reliance’s Transfer Provision, the Fifth Circuit Court ruled in Miller’s favor. Learn more about the Fifth Circuit Court’s decision here.