CHATTANOOGA, Tenn.–A federal judge in Tennessee has granted class action status to a lawsuit that alleges Unum Group violated the Employee Retirement Income Security Act by illegally denying or terminating thousands of group long-term disability claims.
The decision is the latest ruling in the long-running multidistrict litigation that alleges several types of misconduct by Unum or its subsidiaries in handling group LTD claims.
The lawsuit filed in 2003 claims that Unum set cost-savings targets to be achieved through the denial and termination of certain LTD claims and used financial incentives to enlist the help of its in-house physicians and claims adjusters in meeting those goals.
Plaintiffs are not seeking monetary relief, but instead are asking that the court provide “declaratory relief determining the illegality of the conduct alleged and injunctive relief whereby UnumProvident and its subsidiaries are ordered to immediately cease…engaging in the offending practices.”
UnumProvident changed its name to Unum Group in January.
The class certified Tuesday includes all plan participants and beneficiaries insured under ERISA-governed LTD policies issued by Unum or its subsidiaries who have had a claim denied, terminated or suspended on or after June 30, 1999.
In response to the ruling, Unum issued a statement saying it is not a decision on the merits of the case and that that the company has already begun the process of reassessing the denied or suspended claims.
In addition, the statement added: “We are deciding now whether to seek an immediate appeal to make sure that the case proceeds on the correct procedural path when it gets to the merits of the claims. Several motions that will provide the court with the opportunity to begin addressing the merits await decision and are unaffected by the recent ruling. These additional motions, if decided in the company’s favor, would end the case in Unum’s favor without a trial.”
An attorney for the plaintiffs, Matthew M. Houston with Harwood Feffer L.L.P. in New York, declined to comment.
