LTD Insurance 101
Mason Waring: Hi, my name is Mason Waring and I am a partner and attorney at Chisholm Chisholm and Kilpatrick. I am doing here with my colleague, Leah Small who is CCK attorney. We devote much of our practice to representing professionals on their long- term disability claims appeals in court litigation. These individuals are either received long-term disability coverage through their employment or they purchased policies themselves directly from the insurance companies. There are many different insurance company that issue these policies. MetLife, Cigna, Unum, Standard, Reliance Standard, Hartford, Aetna. There is a ton of them.These policies are different and it is really important. If you have one of these policies to read and understand the unique terms, there is common thread that run through most of these policies and today, we just wanted to take some time to talk about the anatomy, the basic anatomy of a Long-Term Disability policy. And give you an overview of what the typical claim process looks like. So let us get going. Let us start with the basic anatomy of a Long-Term Disability Policy.
Leah, what are some of the important information claimants will find when they read the policy?
Leah Small: One of the most important pieces of information they will find is the definition of disability which tells them what they need to meet in order to be eligible to receive long-term disability benefits. Second, their policy will also give a lot of important information about their benefits. These provisions addressed when benefits start, what the benefit amount would be, and how long they can get benefits for. Third, your policy will tell you any limitations that apply to your long-term disability claim or your benefits. These limitations can prevent some claimants from receiving bandits all together or they can limit the amount of time a claimant can receive benefits for. Some again, these differ from insurance coming to insurance company policy to policy but there are some common ones we see a lot of time. One is a pre-existing condition limitation, which generally excludes coverage for disabilities that are caused by a condition that the claimant had forced treated for prior to obtaining covered under that policy. Another day when we see a lot of times is what we call the “mental health condition limitation” often if your disability is due to a mental health condition like depression or anxiety, long terms with benefits are going to be limited to twelve to twenty four months.
Another big one is what we call ” appropriate care and treatment” often under most of these policies is the claimant has to be receiving appropriate care and treatments for their disabling condition in order to receive benefits.
Mason: And these policies can be confusing. Sometimes your case might be complicated and it could be important for you to get an attorney involved or at least talk to attorney to see if it makes sense to get an attorney involved. If you want to find out that, we can help you. It costs nothing to talk to us to find out if we can assist and you can find us through our website cck-law.com or you could call us at 401-331-6300.
So, I am going to splash up a diagram next and this is just in overview of the typical claim process and you typically think about it in three stages. This can vary. So, stage one is filing the initial claim, stage two if the claim is denied, the administrative appeal to the insurance company and state juris court. With respect to stage two, sometimes depending on the terms of your policy that could be more than one level of appeal. If it is ERISA governed claim, then the law only requires one level appeal but sometimes there can be additional levels. So again, important to read that policy and understand what the claim process looks like. But to get just a general sense of the process thinking about it in three stages is a good way to start.
So Leah, tell us about stage one and what claimants typically need to do to get that claim files?
Leah: So the first step is to name what we call “the notice of claim” and oftentimes in your policy it will outline how you do that and it could be via telephone or in writing but again, read your policy and it will tell you how you use to do that. And the notice of claim normally specifies if you are disabled, when your disability began and what causes your disability.
The second step is the claimant and their training positions have to complete claim forms. And often, the claimant forms will ask for information about disability, how it impacts you on a day-to-day basis. And you also get a form that often asked about your education, your work history to get information for math perspective as well. The claimant’s doctors usually complete what we call an “attending physician statement” which ask the doctor questions about your treatment, what conditions are diagnosed with any testing you had, and how your condition impacts you. In addition to the claim forms, claimants want to gather and submit evidence of their disability. Oftentimes, this is primarily medical records but it can include other types of evidence as well such as reports from your doctors, photographs, symptom logs or statements from the claimant, their family, their friends or their co-workers.
Mason: Adding to that Leah, if you own a business and we often see this with physicians that owned the medical practice or have an ownership interest, sometimes you need to report financial information because the benefits can be based on business ownership income. Maybe K1 income as well as W2 earned income that way and so sometimes the initial claim process for a professional position or non professional that actually owned the business can be a little bit more complicated. So you want to keep an eye on that. Again, re-emphasizing read that policy to understand what kind of evidence you are going to need and what types of things the insurance company is going to be looking for, to compute that benefit and determine whether you are disable. So after the claim is filed, the initial information, the notice of claims given, the claim forms, tell us about the insurance companies investigation process.
Leah: In terms of companies have a few different tool. So to speak that they use to investigate claims and determine whether the claim is until the benefits. One of the big ones we have see is what we call “fire reviews” and that involves a doctor and nurse who may work for the insurance company or they may not. It may just be hired by the insurance company. They review the claimants medical records and issue an opinion about the claimants restrictions and limitations. Another common we see a lot is what we called “independent medical exams” and actually the insurance company selects a doctor to physically examine the claimant. And the more of a claim is to be aware that although it is supposed to be independent this is someone hired by the insurance company. So it is important to keep that in mind.Additionally, sometimes in search we make do a social media search for the claimant and that is where they would clean its name, try and find social media profiles to see what the claimant is posting, what activities they may be up to and compare that to what they are reporting on their claim forms or to their doctors.
The fourth big tool that they use is the one that is most uncomfortable for most claimants with just surveillance. And that is where the insurance company may hire an investigator to match and record the claimants activity and again compare it to what their according to the insurance company or what they are reporting to their doctors.
Mason: Leah, talking about the independent examinations if the insurance company saying, we want to send you for an exam, that is a good time to contact an attorney.
There are many great doctors out there. There are many great doctors that perform reviews for companies and are in fact independent but you want to make sure you are being seen by a reputable physician in a position that is going to base their opinion based on your actual condition and really take into account all of the facts and considerations and your full help picture. So it is a real good time to consult an attorney if the insurance company wants to send you for examination.
Leah, tell us next about the decision process, the approval or denial. What could a claimant expect?
Leah: So as the graphic shows, once the insurance company finish investigating or either approve the claim and if that happens, they will notify the claimant either via phone or via a letter. And then once the claimant has exhausted the elimination period which is the waiting period but they have satisfied for benefits begin, they will start receiving benefits and again read your policy that will tell you how long that elimination period is. While a claim is receiving benefits, the insurance company will periodically do updates to determine whether the claimant still meets that definition of disability and that typically involves a lot of what the initial claim process involves. So claim forms with the claimant and their doctors updated medical records things that nature. If the claim is denied then the next step is you need to file an administrative appeal with the insurance company.
Mason: Stage two.
Mason: And this is perhaps the most critical stage of a claim and why is that Leah?
Leah: So, generally speaking it is because this is often the last time to get evidence into the administrative record demonstrating that the claim is entitled to long-term disability benefits. And if the appeal is denied then the poor is often going to be limited to the record that was before the insurance company at that time. So if evidence is not submitted with the appeal, if you probably can not submit it later in court. So it is really important that you take the opportunity to explain why the insurance company now was wrong and provide evidence to support that. If the company has specific basis for the denial, it is important that your appeal addresses that specific basis.
Mason: Right. It can not say it is strongly enough. This is the time if your claim has been denied you really need to consult with an experienced long-term disability attorney at this stage. We have had instances where individuals have handled their own administrative appeal. They did not get the evidence that they needed to but a wrongful claim denial maybe the left that medical records. Some real basic stuff and we were not able to help him in court and it is because given the state of the law particularly if it is ERISA governed claim if you do not get that evidence since the record before the administrative appeal process has closed, you may not be able to get it in courts. And it is a real unfair result in situation but that is the law. Sometimes there is ways around it but as a general proposition, you have to get your substantive evidence in that you need to win your case in during the administrative appeal process. So it is really a critical time. So that is the time if you are in one of these appeal process is to reach out to a lawyer.
So Leah, let us assume that the claimant has now filed the administrative appeal, how long does it usually take to get a decision from the insurance company in that appeal?
Leah: Generally it takes forty five to ninety days to get a decision. The insurance company has forty five days initially but they are allowed to take an additional forty five days extension. It can also potentially be longer than that because they can not tract historical toll. Those time frames if the claimant did not provide sufficient information for them to render a decision and they have requested and are waiting for more information from the claimant.
Mason: And so when we are handling appeals for clients, we do not leave it to the insurance company to collect the evidence for our clients. We analyze the policy, we analyze the facts, we review the medical records, we work with experts if appropriate, work with the treating physicians and really equip together the case to carry your burden approved for you and prove your claim. And by doing that, that is a good strategy to keep your claim on tract for an efficient and expedient claim decision. You can not always control what the insurance company is going to do but really get being proactive in gathering the evidence and laying it out in a clear way like you would have trial is really we have found the most effective way to advocate for clients during the administrative appeal process.
So Leah, talk to us about the court process if administrative appeal denied, what are the next steps that phase three, stage three?
Leah: As we have said, if the administrative appeals denied, they will get filing suit in court at that point. As you mentioned, it is in this ERISA governed LD claims which is what governs most of your employer provided, LTD policies. Fourth looks a lot different than what most people and vision when they are going to court. So as you mentioned, it is governed by federal law known as ERISA. And because that there is no jury involved the court might actually give deference to the insurance company’s decision and that very state to state but generally is allowed for them said to give deference which means they are not necessary going to determine whether the in terms of who is right or wrong. There is going to determine whether the insurance they had a reasonable basis for the denial which can be a lot more difficult of a standard to meet. As we also mentioned, the evidence is largely limited to the claim file and you won’t be able to introduce new evidence in court.
Finally, the remedies in court are unfortunately limited. Generally you are fighting to get your long term disability benefits and potentially get back on claim with the insurance company. So unfortunately, in most of the ERISA governed cases, you can not go after the big damages. So you are really fighting over your benefits.
Mason: So in some there are significant procedural obstacles that a claimant need to deal with in court when it is ERISA governed claimed but they may not necessarily have to contend with the non-ERISA government claimed?
Mason: Even though it could be the same insurance company issuing two different policies. If one is a group policy through your employer, it may be a risk to govern in one and it will be treated differently in court than the one that you may have purchased directly from the insurance company. So it gets tricky. Again, it is why you at least want to consult with an experienced LTD attorney. It got to understand the law of the land. Even if you are going to go out by yourself, you really need to understand what you are dealing with.
So Leah, wrap up what we talked about here today.
Leah: So, long-term disability insurance is an important benefit for individuals who become disabled and unable to work. It is very important to have that coverage whether you got for your employer or you purchased it privately. You to read your policy, understand what definition of disability you need to meet, what the benefit provisions are, and any limitations your policy contains. If you need to initiate a long-term disability claim, the first step is submitting notice of claim to the insurance company followed by who claimed the claim forms and submitting evidence of your disability. Once you have initiate a claim, the insurance company is going to conduct an investigation to determine whether you meet the definition of disability and other policy provisions and thus approve or deny your claim. If your claim is denied, the next step is to file the administrative appeal with the insurance company followed by filing suit in court if the insurance company also denies your appeal.
Mason: Thanks Leah. And if you want to reach out to us to see if we can assist you with your claim appeal or court litigation please do so. It costs nothing to talk to us to see if we can assist. Our phone number is 401-331-6300 and you can contact us via our website at cck-law.com. Thanks very much. Have a great day.
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