Disability law is complex and confusing, even for some lawyers. Below are some common questions and the best answers I can offer without knowing the facts of your unique case. If you have specific questions about your case, call me at 877-626-3501 or visit the Help Me Bill! page.
The answers below are not legal advice, which can only be rendered by a competent lawyer who, within the bounds of an attorney-client relationship, is aware of all the relevant facts surrounding your claim. Click any question below to be guided to the answer.
Q: What is ERISA?
A: ERISA is a shorthand term that refers to the Employee Retirement Income Security Act. That sounds like it should only apply to retirement benefits, and would have nothing to do with disability insurance. Unfortunately, that is not the case. ERISA’s tentacles are far reaching and touch every benefit plan sponsored by an employer for the benefit of its employees, with few exceptions. For a detailed discussion of ERISA and long term disability insurance and claims follow the links in the menu at the top of the page.
Q: What is disability insurance?
A: Disability insurance is purchased to provide replacement income when you cannot work due to a disability.
There are two ways of buying disability insurance policies:
Individual Disability Policies — These policies are bought by individuals and are paid for by them directly. The premiums are not paid through employment, and the policy is not part of a fringe benefit plan with from your employer. If the claim is denied or benefits started then terminated, the disabled worker can go straight to court, and enjoys all the protections of state laws and the judicial system, including right to trial by jury and the right to present evidence and cross-examine witness called by the insurance company.
Group Disability Policies — those that are provided through employment. With very few exceptions, these are governed by ERISA. Under ERISA, the disabled worker files his claim with the insurer (or employer, if the employer is self-insured). If the insurance company denies the claim, he or she has to first appeal the denial, to the same insurance company; unlike ordinary disputes he cannot simply file suit.
It is very important to understand how crucial it is to present the claim properly from the beginning. If the claim is denied and you end up in federal court, you want the federal court to see all the evidence, not just what the insurance company puts in the file. Remember, the federal court can only look at the claim file (called the “Administrative Record”), so this is where most cases are won or lost.
There are basically two types of disability insurance benefits:
Short-Term Disability Policies (STD) — These policies pay benefits for a very limited time period. There is usually a qualifying (waiting) period after the worker becomes disabled, before benefits begin. Typically the waiting periods range between 0 and 30 days. Short term disability benefits are usually payable for only 24 months, but they are sometimes as short as six months.
Long-Term Disability Policies (LTD) — The waiting period can range from several weeks to 24 months (usually the same length of time as the short term disability benefits are payable). A disabled worker can usually receive benefits until age 65.
Q: What is total disability?
A: Many group disability plans and policies contain two different disability definitions. The first one, usually only applicable to short term disability, defines total disability as the inability to perform the material duties of the claimant’s own occupation. This is usually referred to as the “own occ” definition. It is important for the insurance company claim file to contain very detailed information about a disabled worker’s job, and it is his responsibility to furnish it. If the disabled worker’s job duties are not clearly presented he runs a substantial risk of either a denial of the claim or a decrease in benefits. Without specific job information from the disabled worker, the insurance company can themselves define duties of the disabled worker’s job. You can bet that the insurer’s job description will be very different from that supplied by the person who actually does the job – the injured worker. An insurer (or its hired doctors) will then note the workers’ limitations, but claim that the he or she can perform the material duties of his job despite these limitations. Another trick is to claim that certain duties are not “material” to the disabled worker’s job, and therefore the worker is not disabled at all!
Q: What is residual or partial disability?
A: Some policies provide disability benefits for people who are disabled and cannot do the work they were doing at the time of the onset of disability, but can do some work. Typically, partial or residual disability is defined as the inability to perform one or more of the substantial and material duties of your occupation, and because of such limitations, you have suffered at least a 20% loss of monthly income.
A lot of times, insurance companies will often interpret the two definitions (total disability and partial disability) together. They do this to move people from total disability status to partial disability status. They decide that if you are able to do at least one of the duties of your job, you are only partially disabled. But, in truth, almost everyone who is totally disabled can probably do at least one duty of his or her job. Here, the definition of total disability is crucial. Is it an “any occ” or an “own occ” definition? If the latter, the disabled worker has a much stronger case for total disability. However, even under the “any occ” definition, some cases can be won if they are presented right.
Q: What is a pre-existing condition and when will it prevent coverage?
A: This depends on the definition in the plan or policy. Typically, it means any medical condition for which the insured was or should have been treated during the 2 years before becoming insured. The period can vary, as can the definition. Some definitions require that the insured received medical treatment, consultation, care or services, including diagnostic tests, or took prescribed drugs or medicines within the “look back” period. Some, though, look for any evidence of symptoms, regardless of treatment, that would put the ordinary person on notice that he or she should seek medical advice. It is sometimes surprising how far insurance companies will go in interpreting a medical record as a sign of a pre-existing condition, when in fact it is not. Generally, if the disability is the result of a pre-existing condition, the insurance company is not liable for benefits.
Q: Will the insurance company put me under surveillance?
A: Probably! Insurance companies love surveillance. You can be watched, followed, and videotaped you while you are out in public or even outside on your own property. The best advice is to assume that the insurance company has a video tape of you every time you leave your home. They will try to get you to deny that you are able to do something that they have you on tape doing.
Q: May I work at another job and still get benefits under my disability insurance policy?
A: Like the answer to many legal and insurance questions, it depends. Most individual disability insurance policies (non ERISA), use the “own occ” definition of total disability. Under that definition, if you are able to work, but unable to do your previous job, you are entitled to benefits. But, the duties of your new job must be substantially and materially different from your pre-disability occupation.
If your policy is covered under ERISA (obtained through employment), it may have an“own occ” definition for short term disability, then switch to an “any occ” definition for long term disability. Under the “any occ” definition, you usually receive total disability benefits if you are able to work (but see “residual or partial disability” elsewhere in this FAQ)
Q: What are offsets?
A: Most disability insurance policies, provide that the Insured’s monthly benefit can be reduced (offset) by the amount of benefits he or she receives from another source for that same disability. These other sources include Social Security, benefits for the same disability from another policy, and disability retirement benefits.
Q: What can a competent ERISA attorney do for me?
A: First, if you retain a lawyer before your final denial on appeal, he or she can review the record, and ensure that your case is presented to the insurance company in the best possible light. That is why it is important to talk to an attorney early in the process.
It is best to retain an attorney right from the start. The insurance companies have attorneys to advise them, and even their own claims handlers are experts at handling claims. Most disabled workers are not and are at a distinct disadvantage.
Q: Will the insurance company pay my attorney’s fees?
A: If you are successful in court, a judge may order the insurance company to pay all or a part of your attorney’s fees. However, whether to do so is up to the judge and many judges just don’t like making one party to litigation pay the other side’s attorney’s fees. The factors that judges usually take into consideration include how badly the insurance company acted, how long they continued to press their defenses when they knew or should have known that there was no merit to them, and the ability of the parties to pay.
Q: Why is it important to seek legal advice right away?
First, just the process applying for disability insurance can be complicated. An experienced ERISA attorney has prepared written applications, gathered the medical evidence, and ensured that the submission contains every document necessary to support his or her client’s claim. He or she can work with you, your employer and even co-workers to develop a comprehensive and accurate job description. He can meet with your doctors to ensure that their written records use language that the insurance company will accept.
After the application is submitted, the attorney will respond to the claim handler’s questions and attend interviews with an insurance company representatives.
Your attorney should also work with your doctors to provide adequate information to the insurance company. Insurance companies send “Attending Physician Statements” to your doctors. These APS’s, when not completed properly, are used by the insurance company to deny claims. Your lawyer can work with your doctor to help him or her understand what is meant by the term “disabled” under the particular policy and the specific information being sought by the insurer. Insurance companies always want the treating doctors to fill these APS’s that have very little space for detailed explanations of why your doctor thinks you can’t work. Then, they deny the claim because of insufficient information. Of course, when they get the opinions they buy from their doctors, they are often many pages long.
How do you respond when you find out that the insurance company has had you under surveillance and has video tapes of your activities? Attorney’s have seen lots of surveillance and a competent lawyer know how to respond to it.
In short, there are significant aspects of the process that take careful consideration long before you file suit in court. Without guidance, a disabled worker can inadvertently provide the insurance company with the means to delay or deny a claim.
While the insurance company may promise a full and fair review of the claim; they have a strong incentive to find you not disabled. Every claim they approve comes out of their pocket. If your claim is denied, it is up to you to provide them with the information, documents and medical support necessary to overturn the denial. If anything important is left out at this stage, it can be fatal to your claim, because you won’t have a chance to fix it in court.
But, even if you retain an attorney after final denial, there are some circumstances that allow you to supplement the administrative record. If you fall into one of those categories, your case may still be salvaged. But even if you don’t, a competent ERISA lawyer will review the file for evidence of bias, failure to follow the plan or policy procedures, or failure to comply with the law.
Finally, in appropriate cases, competent counsel will file suit and vigorously prosecute your claim.
In 1970, the Studebaker Motor Corporation declared bankruptcy. Because it paid retirement benefits from current earnings, retired employees and long-term employees woke up to discover that they had nothing for their retirement. In 1974, Congress responded by enacting ERISA. However, as is usually the case, Congress not only reacted, it over reacted, so that ERISA covers not only retirement benefits but all “employee welfare benefit plans”. This includes health and disability insurance and in some cases, even vacation and sick leave entitlement. When Congress passed ERISA they specifically provided that it pre-empted the entire field and that state laws that affected the area were unenforceable.
What this means, in a nutshell, is that if you have a claim against any employer or insurance company for benefits that are provided through your employment, you cannot sue them in state court and you cannot be awarded damages or penalties enacted by state legislatures to discourage withholding of meritorious claims for benefits. In fact, you must go through the insurer’s “internal appeals process” before you can file a suit at all. Then, when you do file suit, it has to be in federal court. But, ERISA suits are not like the usual case where you get your day in court, can introduce evidence, call witnesses, etc. and submit the controversy to a jury.
An ERISA case is viewed as an appeal from an administrative agency. The insurance company is the administrative agency, and its decisions are entitled to great deference. That means, in effect, that the federal judge, without a jury, reviews the claims file (euphemistically referred to as the “administrative record”) for abuse of the insurance company’s (or in self funded plans, the employer’s) discretion, and cannot reverse the decision unless it is downright unreasonable, even if the judge admits that he would have ruled differently if he had the case to decide anew.