Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

In our work, we read a lot of case reports, articles, blogs and treatises on insurance. Most concern the latest legal decisions and what they mean to insurance litigation; many concern settlement procedures, buyouts and other practical aspects of pursuing claims against insurance companies.

But, very few, if any, are written from the point of view of the plight of the actual policyholder – the person whose righteous claim has been denied. What goes on in the mind of the person who truly believes he or she has met the requirements to obtain benefits, but is blindsided when the insurer turns down the claim?

And, when we say “met the requirements”, it means that some kind of personal disaster has befallen the policyholders, usually affecting the very basic elements of their lives. After all, people usually don’t buy personal insurance except for life, health, disability income and similar life-altering happenings.

How do these people cope?

First and foremost, if they have a disability which prevents them from working and bringing home a paycheck, they need financial support for food, medication, ordinary living expenses for their families. This should be understood by everybody. All of an insured’s time and energy go into keeping body and soul together for the family.

The stress created by such a situation can be overwhelming even for a healthy person. For people suffering from a physical or mental disability severe enough to prevent them from earning a living, the stress is devastating. Pile a questionable insurance company claim denial on top of this package of woes and the outlook is even grimmer for the claimant.

The point we are driving at is that everyone involved on the claimant’s behalf must be very aware that the claimant needs some TLC from the people in their corner, even if those people are not in the habit of offering TLC.

Doctors and lawyers are accustomed to being deferred to in their everyday practices and are, maybe, due some acknowledgement for their importance in many people’s lives. But, when it comes to denied insureds whose very financial future and wellbeing are threatened, they must find some extra TLC to help carry the people they serve through the crisis.

As busy as professionals are, we have to find that little extra bit of time to take a call personally and talk to a client or patient when the world seems at an end to them. Such a sign of their doctor’s or lawyer’s particular interest in their case may do much to help give them the strength to go on.

From the denied claimant’s point of view, the situation is extreme. No job, no money and only one hope – that the lawyer and the doctor will be able to get the insurance company denial turned around. This is a large responsibility calling for skill on the part of the professionals to get the job done.

The extra effort we are calling for here is not in a professional sense. Doctors and lawyers, as a class, go all out professionally for their clients and patients in all matters. The extra effort required for denied insurance claimants is for the professional to be understanding and supportive through the claimant’s tough time. Find the time and energy to give a little TLC.

Being aware of the stress your client or patient is suffering is half the battle. Doing what you can to alleviate the stress is the other half.

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When insurance companies look to do what is right, they look though a 1-way mirror. This comes as no surprise to those of us who have to fight with insurance companies every day to get them to do what is right for our clients.

What brings on this observation is the ongoing investigation by 35 states of “unclaimed” life insurance policy death benefits which seem to disappear into company books, never to reappear again.

The “right” part of the statement has to do with annuities, which the companies have contracted to pay their customers (in return for good money, of course). Most of these annuity contracts call for the annuity payments to end when the annuitant dies. Many times, the annuitant dies and the insurer receives no notice, thereby increasing the danger that the company will continue to send annuity checks to a deceased.

But, never fear. There is a Master List of Deaths maintained by the Social Security system which is also very interested in learning when one of its benefit recipients dies. The data in this list is kept current and is available to anyone interested for a fee.

We have no argument with the insurance companies protecting themselves by following the Master Death list closely and updating their annuity files so as not to pay benefits to those who have expired.

The problem is that these same insurance companies don’t use the Death Master List to notify life insurance beneficiaries of policyholders who have died leaving paid policies for relatives and others who are unaware of the policies.

The result of this failure is that the life insurance benefit may never be paid if the beneficiaries didn’t know they were named in the policy. Further, most states have an escheat law which commands that in any situation where life insurance proceeds are unclaimed for a certain period of time, they escheat to the state.

If the insurer doesn’t know that the policyholder died and the policyholder is ill or so incapacitated that he or she can’t take care of business, the company can send out premium notices and then cancel the policy for nonpayment, thereby writing the potential liability off its books relatively quickly.

We have a feeling that the insurance companies under investigation will wind up paying hefty fines in a settlement to the investigating states, just as Unum did in 2004. See Unum. But, in actuality, they will be paying a lot more. It will be another instance of insurance companies playing fast and loose with their policyholders and making every effort to add dollars to their bottom line.

This is why we shudder when we hear legislators trying to tell people that Social Security should be shifted to a private insurance system. The record of the private insurance industry in dealing with their policyholders does not give us much confidence that such an adversarial system, with profit as the main underlying motive, will deliver for Americans the social network they have come to expect from Social Security since 1934.

We know that the system needs tightening up economically – but, not destruction at the hands of private insurers. There are many ways in which more revenue can be earned while benefits are reduced in a humane way, that will allow the system to continue for decades and decades to come.

With the way that insurance companies fight their policyholders to hold onto every dollar
they can, as most recently demonstrated by the ongoing Master Death List investigation,
the Unum probe and settlement, IME doctors, denial bonuses for their employees, why
would anyone in their right mind entrust the future of Social Security to private
insurers?

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  Many people are not aware of it, but addiction to drugs, food or alcohol is a recognized disability under the terms of many disability income policies. If there is a true addiction and it prevents the insured from performing his or her occupational duties, it may be covered by an ERISA or a private policy.

The stigma and guilt usually associated with addiction may lead victims to believe that the addiction is their “fault” and that there is no coverage for this disability. Not so.
Addiction means just what it says – “I can’t help myself”.

Many times the addiction is the result of prescription pain medication given as treatment for injuries or illnesses. They may also be the result of nervous or psychological conditions which are very real to the afflicted person. When these conditions are added to the treatment protocol for the illness or injury the result may be an addiction which will not cure itself.

If the addiction is so bad that the person cannot perform the duties of the job, medical or psychiatric treatment is required, and, if there is coverage, the benefits of a disability income policy may very well be available.

However, it would be a mistake to think that the insurance company will accept an addiction claim without putting up a battle royal. After all, the courts are full of cases where the illness or injury would be clear to any neutral observer, but the insurance company puts up a no-holds-barred fight with its stable of IME doctors to try to discourage the claimant.

We have spoken before about the strategy insurers use to discourage claimants from pressing claims. They know that claimants are usually at a low point, without work and without income. See Docility. So, they turn up the screws to add more pressure by demanding more and more information and turning their pack of doctors loose on the claim.

Insurers make the claimant jump through hoops in an effort to get the claimant to back off. How do insurance companies react to claimants who say they can’t work because of an addiction? They play the stigma and “fault” cards for all they are worth.

If a person is in a position where they can’t stop eating, drinking or drugging to a point where they can’t do their job, they have to seek professional help and they may be entitled to disability benefits under the terms of their disability income policy.

However, when they do decide to make a claim, they should know that the road to income recovery will be a rough one, with the insurance company pulling out all of the stops to avoid paying. They should be certain they get the help they need, both legal and spiritual from an attorney who has successfully handled addiction cases before.

Insurance companies smell blood in the water when they see a case brought by someone whose affliction indicates a lower threshold for pain and suffering. Knowing this, if you decide to go ahead, be prepared to take some punches and travel around some roadblocks.

But, also know this – with an attorney who believes in your case in your corner, you can prevail.

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