Saturday, April 21, 2007

LTD Plan Limitations

Many disability plans provide for the payment of benefits through an insurance policy. When an insurance carrier is liable for paying benefits under a disability plan it usually also acts as the plan’s claims administrator. In those circumstances, the insurance carrier has a conflict of interest because if it approves a claim as claims administrator, then it has to pay those benefits under the policy it issued that provides for the payment of benefits. Consequently, the insurance company’s decisions as claims administrator favor avoiding the payment of claims.

One way that carriers avoid liability is by intentionally mischaracterizing physical disability claims as mental disability claims. I just received an approval of both a short and long term disability claim where the carrier’s conflict of interest obviously influenced its decision.

The claimant submitted evidence that her mental and physical impairments precluded her from being able to work. Jefferson Pilot approved disability benefits based upon the mental condition, but asserted that there was insufficient evidence of physical impairments to support total disability. That assertion was false because there was just as much, if not more, evidence to support disability based solely upon the claimant’s physical impairments. As it typical of many disability plans, the claimant’s limited benefits for a mental condition for 24 months. Jefferson Pilot’s decision was a baseless attempt to limit its liability to 24 months.

Under these circumstances, I always send a letter to the carrier immediately, advising that the claimant rejects the decision insofar as it rejected disability benefits based upon the physical impairments. This avoids the carrier from subsequently arguing that a claim based upon physical impairments is waived. I expressly notify the carrier that the claimant will pursue disability benefits beyond 24 months because the medical evidence establishes an inability to work due solely to physical impairments.

Monday, April 16, 2007

Faster Benefit Approval

Regardless of the type of disability benefits that are sought, the claimant must have a doctor who is willing to support the claimant’s inability to work. A corollary is that the more doctors a claimant has who are willing to support the claimant’s inability to work, the faster the application usually gets approved.

A couple of days ago, a Social Security Disability (“SSD”) application I submitted was approved without ever being denied. The claimant’s impairments were typical – neck, back, knee and wrist problems. Because the claimant did not have a very long work history, she was concerned about being approved at all.

The claimant had a spine specialist who fully supported the claimant’s application with treatment records, diagnostic test results and a disability assessment. Many people submit the same type of evidence yet their applications get denied. This requires the claimant to spend more time through the various levels of appeals, securing more reports from and records from doctors, before the application gets approved. The delay can cause financial hardship, and there is no interest for delayed receipt of benefits.

In this case, as well as virtually every case, I advised the claimant to secure supporting evidence from another one of her doctors to corroborate the spine specialist’s findings and conclusions. Because the claimant had only been seeing the spine specialist, in light of her impairments, I advised her to start treating with an arthritis specialist. Eventually, the claimant obtained a disability assessment from the arthritis specialist, and it concurred with that of the spine specialist.

Considering that most SSD applications are denied initially, I believe that this particular claimant’s application was approved from the outset because of the corroborative evidence from the second medical source. My experience has repeatedly shown that absent corroborating medical evidence, an SSD application will not be approved initially unless the situation involves an impairment that simply requires proof that the condition exists, such as blindness or paralysis.

Monday, April 9, 2007

LTD Approval Letters

In previous blog entries I discussed some of the problems relating to Social Security Administration decisions that purported to be fully favorable, but in actuality were not. The same problem arises in the long term disability context.

After a two and a half year battle, I was finally able to persuade with Trustmark that my client was entitled to benefits under its disability policy. I received a letter that explained the claimant would be paid for the maximum 12 months under the policy. The only problem is that the policy was for a 24 month period. I contacted the claims representative, who said it was an underwriting mistake, and that the matter could be rectified easily.

When finally securing approval of benefits a claimant is apt to be elated and relieved. That euphoria is likely to cause the claimant to overlook the full extent of benefits that may be due. For example, during the period of disability, there is usually a premium waiver, which should be reimbursed, but is frequently disregarded. Care should be taken to ensure that all benefits are correctly calculated and included.

A claimant might also decide to forfeit the full extent of the benefits that are due for fear that the carrier may reverse its position altogether, but that concern should be ignored. If an insurer approves disability benefits, but then reverses its decision after a claimant seeks to recover additional benefits due under a policy, its explanation for the reversal will not be credible. If the matter resorts to litgation any court will readily see through the insurer’s subterfuge.

Tuesday, April 3, 2007

Surprise Disability Benefits

Learning the full extent of potential disability benefits is critical when you become unable to work. One of my clients referred a woman who had just stopped working as a cafeteria aide because of a host of orthopedic problems and asthma. The aide was desperate because she had no idea how she would be able to pay her bills. The client who referred the aide to me told her that I could help her get Social Security Disability ("SSD") benefits, just as I had helped her obtain them. However, when I met with the aide she was in for a little surprise.

Upon our initial meeting, I refreshed the aide's recollection that she had a short term disability policy through Aflack. She immediately applied, and shortly thereafter started receiving benefits under that policy, which provided a sense of relief while she awaited the progression of her SSD application. However, the aide was in for a further surprise.

I had asked the aide if she had a long term disability ("LTD") plan through her employer, but she did not know, so I advised her to request a copy of her LTD plan summary plan from her human relations department. It turns out that she does in fact have an LTD plan that can pay up to 60% of her salary, which significantly exceeds her SSD benefit. There was yet another surprise.

During our initial meeting, I asked the aide if she belonged to a union. After learning that she did, and that she had contributed to a pension, I suggested that she request a copy of her union's summary description of the pension plan. It turns out that she will be entitled to receive a disability pension in addition to her other benefits.

When you can no longer work, always investigate what group benefits plans your employer or union have. Besides disability benefits, some plans provide for continued pension credits if disabled, premium waivers for life or health insurance benefits and so on.