Disability Insurance Claims

Long Term Disability Insurance claims can be difficult to effectively litigate conflict in federal court. One of the difficulties for claimants to overcome is the restrictive discovery rules that have evolved from the common law governing the Employee Retirement Income Securities Act (ERISA). ERISA applies to most disability insurance claims. “Discovery” refers to the ability of the parties in litigation to request information from the other side, such as in the form of written questions or oral depositions of individuals.

After a long term disability insurance claim is denied, the claimant’s first appeal is referred to an “administrative appeal.” This appeal is directly to the insurance carrier that denied the claim initially. Many claimants decide to appeal the insurance carrier’s denial on their own. Often, a claimant will write a one paragraph appeal stating “I appeal your decision. Please reconsider.” This approach rarely succeeds. An experienced attorney will perform many tasks on appeal, including writing an appeal letter that will address each of the carrier’s allegations, contacting and obtaining expert opinions, sending a claimant out for a functional capacity exam or other medical exam, obtaining updated medical records, and carefully going through the claims file to see if the insurance carrier followed the proper procedures in its handling of the claim. Over the next several blog posts I will discuss strategies that an experienced attorney may use to improve your chances of winning your claim. The most important is to get all your evidence in the administrative record before a final denial.

The Disability Insurance Denial Letter. After a long term disability insurance claim is filed, the insurance carrier will either grant the claim or deny the claim. If the claim is granted, the insurance company will begin to pay monthly benefits. If the claim is denied, the claimant will receive a “denial letter.” This letter is very important because it will list what evidence the insurance company reviewed when making its decision, who reviewed the evidence, for example, an in house Nurse Case Manager, a doctor hired as a consultant or only non-medical reviewers such as a Senior Claims Adjuster. Most major insurance carriers such as Unum, MetLife, Cigna and Aetna follow this procedure. The denial letter should state the reasons the claim was denied and what medical evidence the carrier needs to prove disability. The denial letter will also give important information for an appeal, including where and when the appeal must be received.

ERISA preempted long term disability insurance, Social Security Disability or Veterans Disability Compensation are the most common benefits available to help disabled workers. The legal standard of review is the criteria the courts look to in deciding whether to uphold or reverse the rulings of a lower court or in the case of most disability claims, the findings of an administrative proceeding. This post will explore the legal standard that the disabled worker must meet to prove their claim in court if they are denied during their administrative appeal.

Long Term Disability (LTD) insurance companies are notorious for denying legitimate claims based on obscure disability definitions contained in the policy. There is no one legal definition of disability. Every insurance company, the Social Security Administration and the Veterans Administration all have different definitions.

Most long term disability insurance companies try to limit benefits to the disabled by writing policies that have a mental health limitation. Usually mental health disability benefits are limited to only a short period of time, typically only 12 to 24 months. This means that benefits for mental health conditions such as depression, anxiety or bipolar disorder will only be paid for a limited time period. Many claimants develop depression secondary to chronic pain. The insurance company will try to classify the claimant’s impairment as mental, so that benefits will be paid for only 24 months. The insurance company may also try to classify a cognitive problem or side effects from narcotic pain medications as a mental impairment. Therefore it is very important to make sure the insurance carrier does not mischaracterize a claimant’s lifetime physical disability as mental.

Most long term disability insurance policies have preexisting condition exclusions.

This exclusion effectively means that the insurance company is excused from paying claims they believe may be related even remotely to any prior complaints made by the claimant within a specified period of time. These exclusions usually kick in when a claimant has been eligible for benefits for less than a year, but sometimes the stated period is 2 years. Besides the preexisting condition exclusion time period of a year, there is also a “look back” period, usually the 3 months prior. In a nutshell, if a claimant applies for LTD benefits less than a year after the claimant signs up for the benefit, the insurance company will look at all medical records and pharmacy records for the entire year plus the look back period. These exclusions are very, very broad.

The long term disability policy is the contract between a claimant’s employer and the insurance company. The language and provisions in the contract varies from policy to policy, so it is essential that a claimant get a copy of the policy from Human Resources.

Short Term Disability benefits (“STD”) are paid for a limited amount of time, anywhere from one week to six months, depending on your policy. Generally, STD is sometimes paid for by your employer and is usually 100% of your salary. Because STD is usually paid by the employer and is for a limited amount of time, it can be easier to get approved for STD than LTD.