The Hartford bought Aetna’s group disability business in November 2017, and since that time, they have been cleaning house on these “legacy” claims, but in recent months, we have seen a dramatic increase in the number of disability claims that are being denied or terminated. We are seeing this in the calls and emails that come to our office. Claimants who held Aetna group disability insurance policies have found themselves on the wrong side of this transaction. Let’s a closer look at what has happened and what that means for claimants.
The Hartford bought Aetna for $1.45 billion in November 2017, purchasing the group life and disability insurance and absence management business. With the purchase of Aetna, Hartford became the second largest group life and disability insurance company, with approximately $5 billion in expected earned premiums. The Hartford’s aim in this acquisition was also to expand its strategies for digital capabilities and claim outcomes. The Hartford wanted to have a bigger presence with midsized employer clients, which it has achieved.
The transition was likely occurring at a regular pace, but now we are seeing an acceleration in denials and delays. After Hartford emerged from the challenges of COVID-19 in its second fiscal quarter, it announced an organizational plan to reduce expenses that is big enough to have a name – “Hartford Next.” The company described this as an “operational transformation and expense reduction” plan designed to save $500 million annually by 2022. To get a sense of how detailed this process is, read this statement from The Hartford: “The expense reduction plan is designed to shave 2-2.5 points from its 2022 P/C expense ratio and 1.5 to 2 points from its 2020 Group Benefits expense ratio.” How does a company this big save so much money? Long term disability benefits denials and employee layoffs are the most obvious answer. As a publicly traded company, The Hartford must ensure that its quarterly and year end financial reports are satisfying to stockholders. When costs need to be trimmed, several things happen. Employees know that jobs are at risk and are more likely to double down efforts to lower the amount of monthly benefits paid by the insurance company. When layoffs happen, there are fewer employees, which slows the claims process. Claimants lose.
We believe that disability insurance claims are directly in the line of fire. Many of the calls we get from claimants begin with a conversation about their disability policy from Hartford, but as the conversation continues, we learn they originally had an Aetna group ERISA disability policy. Your disability benefits are too important to put at risk. Remember, this kind of insurance claim is not the same as a homeowners or health insurance claim. The long term disability claims create a large expense for companies like Hartford. If you are relatively young, or your monthly disability benefits are large, this is a red flag for an insurance claim professional.
Our first advice for people who had Aetna disability insurance policies that have now been converted to Hartford long term disability policies is to make sure to locate and secure your original disability insurance policy. Your group disability policy has been transferred to The Hartford, but they may not legally make changes to the policy. Your rights under the policy with Aetna vested at that time, and Hartford cannot impose new policy terms without violating its obligations.
The simple answer is the costs of the COVID-19 pandemic, but it’s not that simple. Insurance companies traded on equities markets are always sensitive to the value of their own investment portfolio and to interest rates. Buying another large disability insurance company likely created an amount of redundancy in systems and employees at Hartford. It takes time in large companies for changes to occur, and this one was years in the making. The claim handling personnel is likely competing for continued employment and denying and terminating claims make these people more “valuable” to Hartford.
We recommend speaking with an experienced long term disability insurance attorney who has a track record of success with Hartford ERISA group and private disability insurance claims. The chances of your succeeding with a claim, or fighting against a claim denial are not encouraging. The long term disability insurance companies have the ability to keep a claim battle going long enough to exhaust your savings and sap the energy that should be dedicated to caring for yourself as you battle your disability. We know for a fact that these companies rely on a certain percentage of claimants not being able to fight back, or making big mistakes early on in the claims process and losing their rights.
Call our office today at 877-583-2524 for a free consultation about your disability claim with Hartford. Learn how our disability law firm can help. Please note that there are strict time limitations on group long term disability policy claims and appeals, so it is recommended that you contact us today. A denial letter must be addressed as soon as possible If your claim was denied, make the call. We can help.
Jason Newfield is a founding partner of the disability insurance law firm Frankel & Newfield. He has spent the majority of his legal career advocating for the rights of disabled workers. He has lectured other professionals, worked on a Federal Advisory committee, and published many articles in the field of disability insurance claims and litigation.
Secrets the Disability Insurance Companies Don't Want You to Know!