Statistics regarding the number of adults (over age 18) in the U.S. who experience a disability reveal that sensory and physical disabilities are fairly common.  The Centers for Disease Control and Prevention (CDC) report the following number of disabilities for non-institutionalized adults in the United States:

  • Hearing Disabilities: 37.6 million (16 percent of adults)
  • Vision Disabilities: 20.6 million (8.8 percent of adults)
  • Inability to walk ¼ mile (or very difficult): 17.2 million (7.3 percent)
  • Physical functioning difficulties: 35.2 million (15 percent)
  • One basic action difficulty or complex activity limitation: 75.4 million (32.9)

While these numbers should dispel the notion that the probability of suffering a long-term disability is extremely low, this risk increases exponentially as people age.  Over 61 percent of non-institutionalized individuals age 65 or older have basic action difficulties or complex activity limitations according to the CDC.  

In light of the above, what is a long-term disability plan?

The function of long-term disability insurance ("LTD") is to protect working individuals from an interruption of income caused by a disabling injury, psychological disorder, or illness.  However, an insured’s policy might specify a distinct definition for disability, so a careful review of the language and provisions of the policy is important.  An LTD policy will provide replacement of lost income but only in part.  Under most LTD policies, an injured worker can obtain 60-80 percent of his or her average income prior to becoming disabled.  While policies vary in terms of the duration of coverage, long-term disability might begin six months after an individual becomes unable to work and continue until the age of 65.

Does state or federal law cover your long-term disability insurance claim?

If you purchased your long-term disability coverage directly from the insurance company, your policy and claims under the policy typically will be covered by state law.  When your insurance policy is provided by your employer, the Employee Retirement Income Security Act (ERISA), which is a federal statute, generally will dictate the rules and procedures regarding your insurance and any claims.  While the initial objective of ERISA was to provide protection for employees from the risk of bankruptcy to pension plans, the law was expanded to include LTD plans provided by employers.

How does an ERISA long-term disability “plan” function?

If you are employed by a mid-to-large company, you might have an employer provided disability plan as part of your benefits package.  If you have an ERISA plan, the plan administrator is required by federal law to provide information regarding fiduciary responsibilities, plan benefits, management, funding, grievances, and appeals.  Under ERISA, the insurance company is permitted to interpret the terms of the policy although this is an extremely unfair arrangement.

Employees who have this form of policy should be aware that the documents provided by the HR department upon hiring probably did not include an actual copy of the LTD policy.  While the employee might have been provided with some form of summary of benefits or an overview of the policy, the worker should request an actual copy of the policy and plan.  Policies can vary substantially, such as in the way the term “disability” is defined.

How does LTD insurance relate to social security or worker’s compensation benefits?

While long-term disability insurance policies are private insurance plans offered by insurers like Harford, Aetna, The Standard, and Met Life, social security disability is a government provided program.  The programs involve different terms, limits, and restrictions.  It is important to carefully review your LTD policy because many policies have provisions that permit the insurer to reduce disability payments based on the amount received for an incident or disability through worker’s compensation or social security disability insurance (SSDI).

Does it matter whether state or federal law controls your long-term disability claim?

Generally, state law is more favorable than federal law for insureds with LTD claims.  ERISA, which governs LTD claims under federal law, is notoriously pro-insurer.  Further, state courts can be more hospitable because a jury, which might be sympathetic to a policyholder mistreated by an insurance company, often decides the case.  In federal court, a claim governed by ERISA will be decided by a federal judge.  The legal standards applied in federal court also make appealing a denial more difficult.  Federal appellate judges considering the appeal of a decision in favor of the insurer might be legally required to apply the “abuse of discretion” standard, which is a much more difficult standard of review when appealing a trial judge’s ruling.

What should you do after your LTD claim has been denied?

If your insurance company denies your claim, you will receive a letter that references an “appeal” process.  Generally, you will be required to exhaust any administrative appeals before filing a lawsuit.  The denial letter you receive will include critical information, including the deadline to request an administrative appeal.  The appeal will be handled by a different division of the insurance company.

Policyholders should strongly consider retaining an attorney during the administrative appeals process.  While an administrative proceeding is less formal than a courtroom hearing, there are still compelling reasons to hire a lawyer.  The information that might be considered later by a judge may be limited to evidence presented during the appeal.  

What kinds of evidence may be used to appeal a denial of benefits?

There are many types of medical reports, doctor opinions, and diagnostic scans that might be effective when challenging a disability benefits denial.  Examples of relevant evidence might include but are not limited to the following:

  • MRIs, CTs, or other diagnostic scans
  • Independent medical evaluations (IMEs)
  • Insured’s sworn statement describing functional limitations
  • Functional capacity evaluations (FCEs)
  • Video footage showing your functional limitations
  • Evidence from treating doctors
  • Opinions from medical specialists in practice specialties relevant to your disability

What deadlines apply to filing an administrative appeal of your disability insurance claim denial?

If you have disability insurance purchased directly from an insurer, the policy and letter denying your appeal will indicate the deadline for filing an appeal.  When a policyholder is pursuing a claim under a policy governed by ERISA, the deadline will typically range from 90 to 180 days during which you must submit evidence in support of your appeal.

Why are your physicians in contact with your long term disability insurance company?

The practice of seeking information, reports, and test results from medical providers is customary for insurance companies investigating a disability claim. 

How can your long-term disability insurance company deny your claim when your claim was approved by Social Security?

The requirements for approval of a disability claim through Social Security are less rigorous than a claim with private insurance carriers.  If your Social Security claim is approved, the insurer will apply these tougher standards and disregard the SSDI determination.  By contrast, the long-term disability carrier will be quick to reference your SSDI denial in support of its opposition to your disability claim with the carrier.  Most disability polices require an insured to file a claim for SSDI benefits and often permit the insurer to reduce the amount of the payments by the amount received from Social Security.

Why did your insurer stop making claim payments to you after two years?

The two year threshold is very significant to a long-term disability insurance claim, so carriers often stop making payments at this point even when an insured’s medical condition and prognosis have declined.  The basis for this change is that most policies change from a less demanding standard that bases disability on your ability to work in your “own occupation” to the ability to work in “any occupation” after two years.

Will your LTD insurance carrier place you under video surveillance while there is an open claim?

Long-term disability insurance carriers frequently use video surveillance.

You can reach Miami Insurance Claims Lawyer J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Attorney Gonzalez-Sirgo directly at [email protected].

J.P. Gonzalez-Sirgo
J.P. Gonzalez-Sirgo, P.A.
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