A sudden illness can leave you unable to work and take care of yourself. That is why people purchase long-term disability insurance. The potential payout on a LTD policy can be significant. This is one of the reasons why they are often hotly contested by the insurance company.
The long-term disability claim process is filled with many potential pitfalls and most claims are unsuccessful. Having an attorney on your side can make all the difference in a successful outcome or a denied claim.
WHAT IS LONG-TERM DISABILITY INSURANCE?
Most people are aware that Social Security provides disability benefits to people who qualify. However, Social Security only pays a modest benefit that is rarely enough have to cover living expenses. Because of this, many people purchase long term disability insurance either independently or through their employer.
Al policies have an elimination period or waiting period. This requires you to wait somewhere between 30 days and a year to receive benefits.
If you have a disabling condition, long-term disability will often pay periodic benefits to replace your lost income. Disability benefits do not match your lost income. Instead, you will normally receive periodic benefits that will be between 50% and 80% of your after-tax income.
The benefit period is the maximum time that you can receive benefits. Some policies are short – between two and five years. Many if not most policies provide benefits from ten years or until retirement.
Even when there is clear evidence that you are disabled, there is a strong possibility your claim will be denied. This is because long term disability insurers are motivated to limiting payouts. In many cases, the assistance they qualified disability insurance attorney can help you get the coverage you’re entitled to.
MAKING A CLAIM
From the outset, you should know that the majority of long-term disability claims are initially denied. One of the reasons so many claims are denied is because of mistakes in the application process. The claim process is filled with opportunities to make a mistake. Here are just a handful of potential problems:
To successfully prove that you are entitled to long-term disability benefits, a significant amount of coordination is needed between you, your physician, and sometimes your employer or a vocation expert. By coordination, we mean that your experts are not only agreeing that you are disabled, but clearly showing on paper why you are disabled.
- Completing the Application Forms
If you are planning on submitting your disability application yourself, be very careful. The insurer is going to review your application carefully to try to find a way to deny your claim.
There are several forms that will need to be completed by you. These may include: (1) Employee Statement; (2) Individual Statement; (3) Attending Physician Statement; (4) Employer Statement. These statements are meant to provide the information needed to approve or deny your claim.
There will be other forms that you will need to complete during the application process. Some forms may seem to be deceptively simple.
- Physician Statement and Medical Evidence
The most important evidence you will present with your application is the physician statement and your medical records. The purpose of the physician statement is to provide your diagnosis to your insurance company and to identify if your medical condition is disabling. The specific language in the physician statement is of the utmost importance. If the physician statement does not clearly establish a disabling condition and address how it prevents you from working, your claim will likely be denied.
When obtaining a physician statement or presenting medical evidence to support your disability claim, it is important that your physician is qualified as a specialist. For example, if you have severe autoimmune disorder that prevents you from working your current job, the opinion of a primary care physician or non-specialist will carry little weight.
In addition, when presenting medical reports to the insurance company, you want to make sure your physician has followed the best practices in examining and diagnosing you. If there are tests that could be ran that will provide further clarity to your condition, you should undergo them prior to making your claim.
- The Independent Medical Examination
After you make a claim, the insurance company will probably schedule you for an independent medical examination. The insurance company is legally entitled to examine you because you are claiming that you have a disabling medical condition and seeking a payment of contractual benefit. Failure to permit the insurance company to examine you means that your claim cannot be processed.
Typically, the IME physician will be in the same or similar specialty to your treating physician. However, it is not unheard of an insurance company using an unqualified physician to render an opinion regarding your disability status.
Once the IME is complete, the insurance company will typically issue a letter with their claim determination.
THE DISABILITY STANDARD IN YOUR POLICY
It is important to recognize that the concept of disability is more than having a medical condition. You also need to show that your medical condition prevents you from working. LTD policies include requirements to be disabled for the purpose of receiving benefits. Most policies will require the applicant to show that they are disabled from working their “own occupation” or “any occupation.”
Any occupation policies tend to be the most restrictive. To be paid disability benefits, you need to show that you’re medical or health condition prevents you from working in any occupation.
Under an own occupation policy, you are considered disabled if your medical or health condition prevents you from continuing to work in your current occupation. It is easier to prove that you are disabled when making a claim under an own occupation policy.
DOES YOUR CLAIM FALL UNDER ERISA?
Another important factor in a long-term disability claim is if you have an individual or group policy. Group policies are typically provided by your employer as a work benefit. Employer-issued policies are governed by a statute called the Employer Retirement Income Security Act (“ERISA”).
Claims that fall under ERISA are (1) more likely to be denied and (2) have a highly technical appeal process.
ERISA does not apply to individually purchased private disability policies/ Benefit plans provided to public or church employees are also excluded. This means that most public employees will not be subject to ERISA and state law will govern how your claim is handled.
ERISA gives the insurance company or plan administrator that will decide to accept or deny or claim a significant amount of deference to make a decision about your claim. If your claim is denied, you need to be ready to follow a technical administrative appeals procedure. Failure to abide by the appeals procedure means your claim for disability benefits is likely forfeited.
After a claim is denied, ERISA regulations give the claimant at least 180 days to file an appeal. The plan administrator must then make a decision about your appeal no later than 45 days after the written appeal is received. Sometimes this timeline may be extended 45 days if there are special circumstances. At a minimum, the plan administrator has a maximum of 90 days to make a decision on the appeal.
At the administrative appeal stage, it is important that all evidence that you believe supports your claim is submitted. In addition, you should present all expert reports needed to support your claim at the administrative appeals level. No reports obtained after the administrative appeal can be considered in the event you have to file a lawsuit.
If you are unsuccessful with your administrative appeal, you may then file a lawsuit in federal court. Since ERISA applies, lawsuits in state court are not permitted. Very little discovery is permitted in an ERISA long-term disability. Normally, the evidence that you can present at trial is the evidence you presented at your administrative appeal prior to filing a lawsuit. This is why it is critically important for your administrative appeal to be handled properly.
CAN YOU RECOVER ATTORNEY’S FEES AND PENALTIES IN LONG-TERM DISABILITY CLAIMS?
If your LTD claim falls under ERISA you are unable to seek penalties and other damages for bad faith insurance that are available under Texas law. The same goes for prompt payment penalties due to unreasonable delays in payment of a claim. The reason you are not permitted to seek these damages is because federal law preempts state law.
However, if you have an individual long-term disability policy that is not subject to ERISA, you can sue your insurance company for bad faith, attorney’s fees, and other damages that your suffered as a result of a delayed or denied claim.
In ERISA claims, you can recover attorney’s fees. An award of attorney’s fees is up to the judge’s discretion. A judge will be more likely to award attorney’s fees if you prove that the insurance company wrongfully denied your claim and/or acted onerously in handling your claim.
WHY ARE LTD CLAIMS DENIED?
Long term disability claims are denied because insurance companies often disagree have that a person is disabled. Most disputes involve disagreements about two types of issues. The first issue is whether there is a medically diagnosed disability. Many carriers often disagree with the opinion of your treating physician. Even if you may have an illness, the carrier may claim that it doesn’t meet the standard for disabled under the insurance policy.
It is not uncommon for a carrier to claim that the applicant is lying about their condition or is distorting there symptoms. In disputed long term disability cases, it is important to obtain thorough reports from your medical providers as well as assessments of your diminished functional capacity
Finally, many carriers will disagree about whether an applicant meets the standard for disability under an insurance policy. As we have explained, there are two common types of long term disability policies: any occupation and own occupation. It is important to have medical and vocational evidence showing that you meet the standard for disability.
HOW CAN AN ATTORNEY HELP YOU WITH YOUR LONG-TERM DISABILITY CLAIM?
According to the Department of Labor, more than 70% of LTD claims are denied. Because of this, having an experienced attorney in your corner makes sense. An attorney can help present your claim with the evidence needed to prove your disability status. Even if you are forced to file a lawsuit, it is important to present the best claim possible because you will be limited in presenting new evidence once in court.
Specific actions that an attorney will take for you include:
If you have filed or are thinking about filing a long-term disability case, please contact us for a free consultation. We are a firm that focuses on insurance disputes and can help you recover the benefits you are entitled to.