The Disability Claims War

People forced by circumstances to seek income disability benefits should keep one mantra in mind at all times:

                      I am in a war with my insurer and I should always act accordingly.

A little understanding of the mechanics of the disability insurance business will make the above statement abundantly clear:

• An insurance company earns its income from premiums and interest on investments.
• The company has some control over premium income.
• The company has no control over the interest markets.

Interest markets have tanked in the last few years meaning substantially less income for the insurance company. Therefore:

• The company pays out overhead expenses, salaries, and benefits from income.
• What is left over is profit.

So, if overhead and salaries remain the same, the company must reduce benefits to maintain profits. Therefore, it will use every method and excuse it has to discourage and minimize disability benefit claims:

• First and foremost, deny, deny, deny claims to discourage policyholders.
• If that fails, make the filing of a claim difficult with forms that encourage errors.
• If that fails, lose claim material and delay responding to claimants.
• If that fails
, use a stable of captive doctors to denigrate and minimize the disability claim even without the doctors examining or even seeing the claimant.
• If that fails, try to video the claimant in a moment which will throw the claim in doubt.
If that fails, cull the Social Media for a post or two that can be offered as proof that the policyholder is faking the claim.

This list could go on and on. Insurance companies have always been in the business of fighting claims and they have thousands of claims adjusters and attorneys whose job it is to defend against and discourage claimants.

Down through the decades, these minions have come up with endless ways to slow or defeat disability claims. Insurers have an arsenal of ways to say “NO!”

If your disability claim happens to fall under ERISA, the situation becomes worse. In a 1989 case, Firestone v. Bruch, 489 US 101 (1989), the U.S. Supreme Court made the situation more dire by decreeing that courts had to give deference to the ERISA plan administrator. Since the administrator is usually the insurance company which would have to pay the benefit, it is not hard to guess how these decisions go.

This is why a disability claim is likely to become a declaration of war. Insurance companies which fight the war everyday are aware of it and treat it as such. Inexperienced claimants are many times the unwitting victims of this war.

To win this war (and many times they do), claimants must understand what is happening and why it is happening. Above all, they must persevere.

If you have a valid claim, “giving up” is not an option. It is exactly what the insurance company is hoping for.





A Stiff Upper Lip Can Hurt You

As anyone who practices in the area of disability law can attest, employees who become disabled are reluctant to admit they are disabled, and instead try to “suck it up” and carry on, even when their condition gives them very little hope of ever being able to permanently keep working. We’ve written about the “working disabled” before, but not in the context of O’Hara v. National Union Fire Insurance, 2011 WL 405448 (C. A.2 (N.Y.))).

O’Hara clearly illustrates that because a disabled employee continues to try to work, does not mean that employee will automatically be denied disability insurance benefits. This court clearly states that an employee’s continued presence at their place of employment does not preclude a finding of disability, if there is evidence he or she was actually incapable of performing the job.

This important principle needed to be reaffirmed. Disability carriers latch on to the fact that an employee tried to carry on despite the disability, to justify the denial of benefits.

In O’Hara, a company administrative assistant suffered a head injury in a fall. She was treated by several neurologists following the fall on March 15, 2001, but she continued to work.

As with all policies, Ms. O’Hara’s LTD policy had limiting language which defined whether she was eligible for long term disability. As with all policies, the language was not simple. She could recover if as a result of an accidental injury she was totally and permanently disabled and prevented from in engaging in each and every occupation or employment for which she was reasonable qualified by reason of education, training or experience. In addition, the policy required the disability to manifest itself within one year of the accident and to continue for a year.

Ms. O’Hara, while working, told her treating doctors it was necessary for her to make notes at work and at home so she could be able to remember the things she had to do. Also during this period, several of her coworkers complained to her superiors that she was behaving unprofessionally. However, her employer did not terminate her until June 6, 2002.

All during this period, Ms. O’Hara reported continuing headaches and severe memory lapses to her doctors, and was found by her own treating neurologist to be “completely disabled”.

Although the Federal District Court granted summary judgment to the insurer on a motion for summary judgment, the appeals court sent the case back for trial saying that the fact that Ms. O’Hara worked after the injury does not automatically mean that she was not permanently disabled by the accident. The appeals court found much in the record to support her contention that she was actually disabled even though she went to work. The appeals court found that the District Court had erred in granting summary judgment while there were major facts in dispute and that a trial and findings of fact by the trial court were necessary.

Insurance companies and courts should realize, as the 2nd Circuit did in this case, that disabilities are not necessarily fully developed when they first strike. Many illnesses and injuries take time to develop the full extent of their impairments.

Further, many employees are not anxious to go on disability and resist it for as long as they can. As a matter of public policy, employees should not be penalized for doing so – they should be praised.

If insurers jump on every employee who tries to work through their injury and deny benefits because the employee tried to work, insurers will be hurting themselves because they will discourage claimants from trying to work.

The decision in O’Hara sends a clear message to carriers that such conduct will no longer be accepted unless the evidence in the case justifies it.






The First 100 Is The Hardest

When we first started blogging on April 15, 2009, to try to help disability income insurance claimants, we had plenty of butterflies in our stomach because we had never blogged before and knew that a blog requires a long term commitment and exposes one’s thoughts to public view.

The first blog was written without having any idea of what the subject of the second would be. We just knew, somehow, that we had the “hands-on” experience and savvy in the law of insurance to help people with disability income and other complicated insurance problems.

So, here we are writing our 100th blog on April 21, 2011, just a tad over two years later.
Looking over our first hundred blogs, we found that some stand out in our mind either for informative content, originality or a nice turn of phrase. We thought, why not list them here for anyone to see what we are proud of.  So, here goes:

Pull In The Welcome Mat – A warning that insurance companies just love to cuddle up to claimants so they can evaluate a claimant’s strength and weaknesses. Hear this - the insurance company IS NOT your friend, no matter how friendly they try to seem. The adjuster’s job is to destroy or diminish your claim. A friendly adjuster is just a viper waiting to strike. The rule: Be as cooperative as the policy and law require; not one whit more.

Hippa, Hippa Hooray – People with psychiatric disabilities have special needs because they usually are mentally fragile and need understanding and protection. Insurance companies love to get inside this type of claimant’s head. Shock them and move their world around and the psychiatrically disabled may be unable or unwilling to pursue the claim. That’s why providing medical info to insurers should be and can be strictly constrained by mental health professionals and attorneys. However, many are unaware of this and are unwittingly providing psychiatric notes and other reports that are strictly forbidden by Federal law. Case notes and similar material must not be provided to insurance companies. Both the attorney and the mental health professional have a duty to protect a client’s personal, psychiatric information.

No “Do-overs” in Disability Claims – Don’t start learning the ropes when you file a disability income insurance claim. This very first step in this process may be the one that sinks you. If you or your doctor omit a necessary fact required by the insurance policy or the law, the insurer will hang onto that omission throughout the claims procedure so as to cast doubt on your claim. Get it right from the get-go.  Starting “fresh” is not an option in an income disability claim.

No Good Deed Goes Unpunished – Old habits are hard to break, but an old habit can break a claimant. If you have an “own occupation” policy, you can’t be Mr. Nice Guy with your employer. Most people want to try to keep working if they can, despite a disabling event. They might try to work doing something else, if they can’t do their usual occupation. If they do that with an “own occupation” policy, the insurer will pay you what you were earning at the time you were forced to give in and stop working, rather than at the rate you were earning at the time you first were disabled. If you have such a policy, stop working when you are unable to perform the job listed in the policy. Trying to be a “hero” can cut the legs from under you.

Insurers Love “Docility” – Disability insurers just love people who don’t make waves. If an insurer first denies a claim (an almost automatic insurer reaction), many of these “waveless wonders” will just go away, giving up valid claims and dropping those claim dollars to the insurer’s bottom line. Disability income insurance claimants need backbone to stand up to the insurance company and get what was paid for in premiums.  In other words, for your own benefit, Don’t Be A Wimp.

So, there it is – 100 blogs and counting. We hope to keep blogging until every DI claimant gets a square shake from the insurance company.

Unfortunately, even Methusaleh didn’t live long enough for that to happen.


Read It So You Won't Weep

In the business of blogging, we learn to be packrats, hiding away bits of information upon which to base future writings. Many times we forget what we have and are pleasantly surprised when we happen on a tidbit which strikes our fancy.

Contemplating the difficulty of explaining the intricacies of disability insurance law, even to specially educated people such as insurance agents and financial planners, we happened upon “The Illusion of Coverage:”, a comprehensive review of the difficulties of insurance law published by The Access Project in 2007.

What we were looking to do was to point out that in today’s world, even when you are in the insurance business, you do not necessarily have your finger on each of the myriad nuances of the various types of insurance coverage because there are so many risks covered in so many ways at so many levels of cost, it seems one would need an encyclopedia just to keep up.

What got us on this topic was a discussion with a financial planner about a particular client and the need for “own occupation” disability coverage because of the nature of the client’s profession and income level. The planner was quick to say that the client had
“own occupation” coverage in his disability income policy.

But, when we asked him, “What kind?” he was at a loss for words.

We then proceeded to list for him the possible limitations and conditions which insurance companies try to place on these policies, such as:

* Limiting the “own occupation” payments to 2 years.
* Precluding the insured from working in any other field as a condition for benefits.
* Capping the amount of benefits to a specific sum over the life of the policy.
* Defining the occupation so as to cover a broad spectrum of employment.

The problem here may be that “own occupation” is frequently used by insurance agents and brokers to describe coverage which is really “modified own occupation”, without understanding or explaining the difference to the policyholder.

The planner and his client may believe that when the insurance agent says the policy has “own occupation” coverage, that such coverage is truly “own occupation” in the classic sense, i.e., if the client can no longer perform the occupation of brain surgery, the insurer will pay the benefit even though the client may be able to do some other type of medical work. Only when the claim is made does the reality of the distinction become clear. By then it is too late.

What the public (and many times their advisers) are not aware of is that insurance, particularly disability income (and long term care) is not nearly one size fits all. Subtle language differences can be critical at the time of claim, but are frequently overlooked or ignored at the time of the policy sale.

So, if one is negotiating such a policy for him or herself, or for a client, to accept a statement that a policy has “own occupation” coverage without plowing through the language of the policy so as to know exactly what one is actually getting, is doing a disservice to yourself and your client.

As with everything else, you get what you pay for. If you want a gold-plated policy which gives exactly the benefit you want for as long as you want, then the premium is going to be high, and if you are willing and able to pay for it – good for you.
If you are not willing or able to pay the required premium, then you have to settle for less protection.

But the important part of this transaction is that both the client and the financial planner know and discuss the details of the policy and make knowing choices based upon a full understanding of the options.

Accepting a generic label for an insurance clause without fully analyzing the actual language leads to a rude awakening if policy payoff time ever comes.

You may miss the true import of a policy clause when you are buying it. But, you can bet your bottom dollar the insurance company won’t miss it when it comes time to pay your claim.

The Phone Is A Client's Lifeline

The practice of law involves many things – knowledge of the law, writing ability, speaking ability, ability to present a logical argument in an interesting way, but, most of all, compassionate understanding of the “human condition” of clients.

It has always amazed us to hear from clients that the “human condition” aspect of practicing law can be so low on the totem pole of legal services to some practitioners. Helping a client through tough times should be priority Number One for all lawyers.

This is especially true of those pursuing disability income (ERISA and private) claims against insurance carriers who reflexively don’t pay. Claimants in these types of claims usually are laid low, both physically and mentally, by a devastating illness or injury which prevents them from performing their daily occupation, thereby cutting off income to themselves and their families.

Add to this condition, that in most cases the “nest egg” claimants may have set aside to try to secure their future, is eaten up quickly with ordinary housing and food costs which they need to keep themselves and the family going through the “no-pay” period. What a “human condition”:  Being seriously incapacitated and having no income!

It’s at that low point in their lives that disability income claimants comes to lawyers for help. They recognize that they stand very little chance of getting disability income payments from insurance companies unless they have knowledgeable legal representation to stand up to the well-staffed, specialized attorney corps insurers use to try to duck policy obligations.

It’s at that low point in their lives that most attorneys practicing disability income law recognize that their clients need more than just good “lawyering”. They also need good “peopling”. They need to project to the client that the client’s case is important to the lawyer and is getting the attention it needs to give it the best chance of resolution in the claimant’s favor. The most important thing, while a disability claim is pending, is for the client to really feel the lawyer understands the client’s economic situation and is doing everything in the lawyers’ power to get the job done quickly and correctly.

One of the smaller, but most important aspects of this caring lawyer-client attitude is one that some lawyers seem to ignore – returning phone calls promptly. If you are a client, what could give you a better feeling about how your case is being handled than to have your lawyer respond reasonably promptly to a phone call from you? It demonstrates that you are important enough to have your attorney take time out of a busy schedule to talk with you.

On the other hand, what could give a client a worse feeling than having the lawyer fail to return n calls for several days after they are made, or even fail to return them at all? Imagine what this phone call “non-etiquette” does to the psyche of a client who had already been laid low physically, mentally and financially. It is an inexcusable way to treat any client, let alone one who is incapacitated and pressing a disability income claim against an insurance company.

These types of client generally need liberal doses of TLC. They need encouragement and assurance that everything is being done to get their lives back on track. What they don’t need, most of all, is short shrift or even silence from the attorney they are banking on to help them.

Our law firm was started by a lawyer who was licensed in New Jersey in 1958 and 52 years later is still practicing law every day. One thing he insisted on when I joined the firm was that I and everyone else return client phone calls as soon as possible. Clients don’t hire you for your good looks, he said, they hire you to look after their interests. The best way to do that is to respond to them in a timely, efficient way. The best way to do that is to talk to them promptly when they let you know they want to talk.

By following this advice through the years, we have found that sometimes these older geezers know what they are talking about.




"Own Occupation"

Don’t be blindsided by the simple words “own” and “occupation".  Joined together, in a policy of disability income insurance, these words become a minefield, ready to blow up your and your family’s life in the event of a disability. 

“Own occupation” is a complicated insurance policy phrase requiring your complete attention and understanding before you can believe you have done what you could to protect your own and your family’s future.

For those who don’t earn high incomes, the nuances of “own occupation’ clauses in disability income policies are not of great import.  But, to those earning the “big bucks” the definition of “own occupation” in their disability income policies can be the difference between life as they know it and an economic wasteland.

A cardiac surgeon making $750,000 a year and up, who becomes disabled and can’t practice and earn as a cardiac surgeon, adds a financial catastrophe to the already heavy burden of the disability.  Smart high earners insure themselves and their families by taking out “own occupation” disability policies to provide substantial disability benefits while they are disabled and unable to earn anywhere near their usual income. 

And, when buying these policies, these people are usually smart enough to ask their insurance agent or broker if their policy has an “own occupation” clause.  If the agent says “yes”, they feel content.  But that question hardly touches the core of what a person with a substantial income should be asking.

The major issue for the prospective policyholder is the way “own occupation” is defined in their policy.  Is it the occupation at the time you buy the policy or is it occupation at the time you become disabled?  Are there time limits on how long the ”own occupation” benefits will be paid?  How does the policy define “unable to perform the duties of your occupation”?  What happens if you start working in a totally different occupation while disabled? Are you entitled to benefits? Are there any other limitations or restrictions on the type of injury or illness which will trigger benefits in the event of a major disability?

Each of these issues is among a myriad of other considerations which have to be understood and evaluated before a high-earning professional can feel comfortable that whatever could reasonably be done to protect the family’s future has been done. 

Some other important considerations are:

* Should the renewal of your policy be guaranteed in case you contract an illness or injury which might lead your insurer to think it is in its best interests to cancel your coverage before you actually become disabled?
* Should you include a cost of living clause in the policy to keep your benefits in line with the cost of living since disability benefits may go on for years and years?
* Should you contract to continue benefits after age 65, the usual termination of policy benefits?
* Should you contract for residual (partial) disability in the event you still can do “some” but not “all” of your “own occupation”?

As with everything else, you have to pay for any additional coverage protection.  But, the important thing is that you should have the opportunity to decide before you buy the policy whether you want or need the added protection. 

So, if you are a person to whom an “own occupation” clause is important, you shouldn’t feel secure even if your insurance adviser assures you that your policy contains an “own occupation” clause. 

While you are thinking of it, read your disability insurance policy TODAY!   The language may be tough to understand but you can do it if you try.If you haven’t the time, get someone who knows to help you with it NOW.

Making the effort NOW is better than having your complacency shattered by receiving a letter from your disability carrier when the chips are down: BENEFITS DENIED!