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If you are an employee of SBC Communications/SNET you may be in for a surprise when you file for disability benefits. The surprise- your claim will be denied even though you are totally disabled!

On May 31, 2006, a lawsuit was filed in the United States District Court for the District of Connecticut against the SBC Umbrella Benefit Plan No. 1, SBC Disability Income Plan, SNET Disability Benefits Plan, Plan Administrators and Unum Life Insurance Company (306:CV 835 SRU). The plaintiff Diana Jordan claims she was unlawfully denied short and long term disability benefits. Ms. Jordan is totally disabled from her Chronic Fatigue Syndrome, Fibromyalgia and Orthostatic Intolerance. Although she presented all of her medical evidence to the defendants, she was denied benefits.

According to the defendants disability benefit plans, bargained for employees can file for and receive 52 weeks of short term disability leave. Short term disability benefits are self insured by the company. At the conclusion of the 52 week period, employees can file for long term disability, partially self insured and partially supplemented by third party insurance carriers.

All disability claims are administered by Sedgwick Claims Management, which is under contract with SBC/SNET. Sedgwick also provides the same services to AT&T, the new parent company. According to the lawsuit, on April 19, 2006, SBC provided a redacted copy of the agreement with Sedgwick. The redacted portions covered all financial information, i.e. the amount Sedgwick is paid. SBC/SNET and Sedgwick have refused to disclose the unredacted copy of the agreement.

The lawsuit reveals that prior to filing suit, Ms. Jordan provided the defendants with some very interesting pieces evidence that reveal bad faith on the part of the defendants. Her effort was to force a reversal of the denial of her recent administrative appeal. The defendants again refused, stating a "final" decision had been made in February 2006.

On March 16, 2006, an attorney for SBC/SNET disability benefits plans made the following admission, in an email, regarding benefit determinations for over 5000 New England employees. According to the lawsuit, Robert McCorkl provided statistical information regarding the number of successful administrative appeals filed internally with the disability benefit plans: "[I]n 2004, there were 134 decisions, 88 upheld (upholding previous denial), 33 overturned and 13 partially overturned. In 2005, there were 108 appeal decisions, 81 upheld (upholding previous denial), 16 overturned and 11 partially overturned." According to the complaint, Sedgwick and SBC/SNET deny 80% of all administrative appeals filed by claimants. The statement speaks for itself.

On March 22, 2006, an employee named Pat Kalina of Sedgwick Claims Management Services (SMAART) wrote an email letter to Ms. Jordan's union local. According to the lawsuit, Ms. Kalina stated, "[A]s we are both aware, the medical information relayed to a lay person (w/o medical background), by an employee will always sound worse than it is because: 1. usually the employee is trying to continue out of work, 2. by pleading w/you and embellishing any symptoms they have, is their way of making you believe that they are on 'death's door', 3. you are the union benefit rep and it is your job to assist them. And of course, you want to have a positive experience w/your member and don't want to appear the 'bad guy' because if you can't turn the employee's request into a plus instead of remaining negative." The statement speaks for itself. According to an unnamed source, Pat Kalina is no longer employed by Sedgwick.

mcarey@execucite.com