Insurance companies, with their inflexible “no pay, no way” attitude towards disability income benefits, are cutting off their own nose to spite their face. Insurers have long ago adopted the basic philosophy that claimants are malingerers and cheaters and not really people who are hurting
Support for this view was recently revived by a guy named Rabbat who finally gave up his heroics and applied for long term disability benefits. Naturally, his disability insurance carrier turned him down despite strong evidence that he was telling the truth about his disability. See Rabbat v. Standard Insurance Company, 2012 WL 4504557 (D. Or.).
Mr. Rabbat had been afflicted with Familial Mediterranean Fever since his early teens. This rare affliction attacks the joints making them very, very painful. It is also a condition which worsens over time.
He went to work for the plan employer in 2005 and worked through his pain until October, 2008, when he went on short term disability. In November, 2008, he applied for long term benefits.
Despite Rabbat’s doctors, who had treated him for years, reporting on his battle with his disease, Standard turned him down because its flunky doctors, who had never laid eyes on Mr. Rabbat, said he could work. The court, which had no conflict of interest, found for Mr. Rabbat.
Why we say insurance companies, in fighting cases similar to Mr. Rabbat’s, are cutting off their nose to spite their face is that there are probably tens of thousands of people at work right now who could rightfully claim disability benefits but who choose to work through the day.
Standard’s attitude in the Rabbat case clearly discourages this exemplary type of behavior. Using their commendable behavior against them to deny benefits to employees when they are finally forced to give in, discourages others from trying to work through their disability.
We have written about this before Stiff Upper Lip.
What insurance companies overlook is that every day a person works, even though disabled, is another day the insurer did not have to pay benefits. When you multiply these days by tens of thousands, it comes to a tidy sum, even for an insurance company.
The 7th Circuit Court of Appeals said it best in another case in which an employee claimed to have fought through a disability for a long time before giving in, Hawkins v. First Union Corp., 326 F.3d 914,(7th Cir,2003):
“…A desperate person might force himself to work despite an illness that everyone agreed was totally disabling... Yet even a desperate person might not be able to maintain the necessary level of effort indefinitely. Hawkins may have forced himself to continue in his job for years despite severe pain and fatigue and finally have found it too much and given it up even though his condition had not worsened. A disabled person should not be punished for heroic efforts to work by being held to have forfeited his entitlement to disability benefits should he stop working…”
Insurance companies should give such hardy souls a medal rather than a hard time!