Frequently Asked Questions
Filing the Claim:
The first thing you need to do is notify the insurance company as soon as you stop working. Most policies contain a “proof of loss” provision that requires a claimant to notify the insurance company that they are disabled and intend to file a claim within a certain period of time – typically 60 to 90 days. If notice is provided outside the proof of loss period, an insurer may argue they were prejudiced by the delay because they were unable to assess your condition at the time of disability. Generally speaking, the sooner you notify the insurer that you are disabled and want to file a claim, the better.
Working closely with your physician during the claim process is crucial, and can be the difference in the claim’s success or failure. Challenging a decision reached by an insurer, where the insurer merely adopts your own doctor’s opinions, is extremely difficult. We will with your doctor to make sure that s/he understands the importance of their role in the claim process, ensure that all documents are prepared correctly, and that they understand what it means to be disabled under the policy.
It depends on your policy. Under many policies, if you are unable to perform the substantial and material duties of your occupation, you do not need to suffer a loss of income in order to qualify for disability benefits. Under some disability insurance policies, if you are only residually or partially disabled, as opposed to totally disabled, then you must generally suffer a percentage loss of pre-disability income as defined in the policy. But where the claim is total disability, the eligibility for benefits is typically determined by a loss of ability to perform work duties. Where the claim is residual, eligibility for benefits is income related as well.
Usually, your benefits have been denied because the insurance company has taken the position that you are not totally disabled under the policy's definition of "Disabled." Typically, this occurs after you have submitted your medical records to the insurance company and the insurer has had their in-house medical personnel review your medical records. If your condition is not one that can be detected by an x-ray, MRI or a laboratory test, oftentimes the insurance company will deny your claim contending that there is a lack of "objective medical evidence."
Benefits may also be denied due to coverage issues, including problems that may arise during enrollment or the application process, or an insurer's claim that you had a pre-existing condition that prevents coverage.
In other circumstances, a denial of benefits can happen years after you were initially approved and began receiving disability benefits. An insurer may terminate disability benefits claiming that your medical condition has improved and therefore claim that you are no longer disabled and can return to work. The disability insurer may base their decision to terminate benefits on some improvement (even if slight) that is shown in your medical records, or through surveillance or by hiring a doctor to examine you. Oftentimes, a disability insurance company will cut-off your benefits after the expiration of the "own occupation" time period has expired and claim that you can perform some occupation even though you are no longer able to perform your previous job.
If your policy is through your employer, you must exhaust what is called your "administrative remedies" or else you will not be able to obtain these benefits. This means that you have to follow the insurance company's internal appeals process prior to filing a legal action. Usually you will have 180 days to file an appeal for benefits, which oftentimes includes submitting updated medical records and a letter explaining why you are entitled to benefits. Look carefully at your denial letter to find out the amount of time you have to file an appeal and the necessary information to submit to the insurance company in order to support your claim. Most of our clients contact us immediately after their disability claim is denied or terminated and ask us to represent them during the appeal process. It is a critical stage of your claim because once the appeal is finished, the door closes on your claim file and your only option is to file a lawsuit. Through our experience in handling thousands of disability claims, we are able to create very strong appeals that oftentimes lead the insurance company to reverse its decision to deny benefits.
An "own occupation" provision means that your policy will pay monthly disability payments in the event that you are no longer able to perform the material and substantial duties of the job you held before you became disabled. Most disability policies provide "own occupation" coverage for a limited period of time such as 12 or 24 months, meaning that after that period expires you must show that you are unable to perform "any occupation" for which you are reasonably qualified by your training, education and experience in order to continue to receive disability benefits.
E.R.I.S.A. is an acronym that stands for a federal law called the Employee Retirement Income Security Act. ERISA was passed by Congress to protect employee benefits and to standardize the laws governing employee benefits. This law regulates the administration of most employee benefits offered through an employer including pensions, life, disability, and health insurance benefits.
Helpful ERISA Terminology:
When Congress passed ERISA in 1974, it defined several terms which apply to ERISA plans. Because you will see these terms used repeatedly in ERISA plans, we are providing you with a short glossary to assist in reading your plan. The complete, technical definitions of these and other words can be found in the statute at 29 U.S.C. 1002.
- Plan Participant - the employee who is enrolled in the employee benefit plan.
- Beneficiary - Usually the spouse or child of the employee who is also enrolled in the employee benefit plan (for example a spouse or child who is enrolled in the health insurance plan) or who may be entitled to receive benefits under the employee benefit plan if something happens to the employee/participant (for example, if the employee dies and a life insurance or a 401K death benefit has to be paid out).
- Plan Sponsor - the employer.
- Plan Administrator - Most courts have defined the administrator as the company or person that actually makes the decision to deny or pay benefits. If the plan is insured, this is usually the insurance company. If the plan is self-funded (i.e. not insured), there is often a committee of employees or a third party administrator (a TPA) that make the decisions.
- Summary Plan Description - This is a summary of the employee benefit plan which summarizes what amount of disability benefits an employee will receive, how you apply for short term or long term disability benefits, when benefits are paid, and how you appeal if your disability payments are denied. The summary must provide an accurate description of the short term and long term disability plan document.
- Plan Document - This is the document that governs the particular employee benefit issue. It provides the terms under which an employee will receive certain benefits, describes the benefits, and explains the rights of an employee under the benefit plan. If it is an insured benefit, usually the insurance policy will be the plan document.
- Pension Benefits - Benefits that are paid under a pension plan are usually retirement payments made to retirees based in part on their years of service, as distinguished from welfare benefits such as health and disability coverage.
- Welfare Benefits - Any benefit that is not a pension benefit, such as disability, health, dental or life insurance benefits.
The method a court uses to decide a case is called the standard of review or standard of adjudication. In ERISA cases, there are 2 different types of review that a court may use, depending on key language which may be found in your plan document (that is, your benefit booklet or group insurance policy). They are: 1) de novo and 2) abuse of discretion (also called arbitrary and capricious).
The key to which standard may be applied in particular case is whether the administrator has been granted discretionary authority to interpret the plan or decide claims. All benefit claims will be reviewed using a de novo standard unless the plan documents state that the administrator has discretion to determine the outcome of the claim. If the administrator (usually the insurance company) has been given discretionary authority in the policy, then the court is forced to review the claim under an abuse of discretion standard.
There are two types:
De Novo: When a court takes a fresh look at a case, and pays no attention to the decision to deny disability benefits made by the insurance company. This is what you might see on television in a trial, where witnesses are brought into court and the judge or jury makes a decision based on the evidence that is introduced at trial.
Abuse of Discretion: If the language of the plan gives the administrator discretion, then the insurance company's decision will only be reversed if they were both wrong and that there is no reasonable basis for their decision.
The abuse of discretion standard requires that the court give the administrator's decision deference making it more difficult for a person whose benefits have been denied to win. If the plan is insured, the court may take into account the insurance company's conflict of interest because the insurance company gets to keep every dollar of a denied claim. A key aspect of an abuse of discretion review relates to what evidence the court considers. In these cases, the judge will usually not allow any witnesses or new evidence. Instead, the judge will only review the claim file which was created before the lawsuit was filed, and will make a decision based solely on those documents. In these types of cases, it is very important to have an attorney that is familiar with ERISA to handle the pre-suit claim and appeal, as the contents of the claim file can make or break your case.