The Deal On Disability Buyouts

Buyouts are rarely in the best interests of you, the insured, and will always result in a windfall for the carrier. That being said, there are legitimate reasons to take a buyout.

If you have such a reason, you may wonder how your insurance company arrives at a buyout number when it tries to buy out your long term disability benefits claim.

The procedure is somewhat complicated, but to protect your interests in such a negotiation, you have to have some insight into how the process works.

First of all you have to understand what a buyout is. The insurance company gives you a lump sum, thereby doing away with its future monthly benefit payment obligation to you, which otherwise may have stretched for many years. The insurer doesn’t have to buy you out, so it will only offer to do so if it receives some benefit from the buyout deal.

Make no mistake, the charitable urge is no part of the insurance company makeup.

Basically insurance companies make buyout offers to save money. Every disability claim has a “present value”. This is the amount of money you could invest now, at a certain interest rate, so as to have, at the end of the benefits term, the same amount of money the company would have paid you in benefits. Obviously, the higher the interest rate used to calculate present value, the smaller the lump sum buyout offer has to be.

By paying early the company saves money and frees up the reserve set aside to pay your claim, so the insurer can use that reserve money now. It also removes the claim as a liability on its books.

Insurance companies rarely feel a pressing need for money. But for many policyholders like you, it’s another story, especially disability beneficiaries who can’t work, but still have to take care of their families. You may need funds to educate a child, keep a mortgage going, or fund treatment for an illness or injury subsequent to your disability.

When you do, a benefits buyout may be an attractive solution to your problem. And if the insurance company gets a whiff of your pressing need, they’ll push their advantage to the limit.

Insurers will try to bargain down the “present value” in various ways:

• They will try to sell you on agreeing to an interest rate which is higher than the rate you are able to get on a reasonable investment. As mentioned above, the higher the rate, the lower the “present value” needed to match the amount of money you would receive over the term of your present benefit payout.
• They will want a discount if there is any chance at all of you being able to go back to work before your present benefits payments are paid in full.
• They would also want a discount because of the chance you might die before your present benefits payments are paid in full. Death ends disability payments.
• And then there is the arbitrary rule that insurers impose: They will never pay more than a certain percentage of the “present value” amount agreed upon with you. This percentage varies from insurer to insurer.

Dealing with these variables is the essence of coming up with a fair buyout figure. Expect no sympathy from the insurer. It will be strictly a business deal.

The thing you have to watch out for is that the insurance company doesn’t give you “the business”.




A New "Poster Girl" For Insurers

Meet Terri Truitt, a Texas lawyer who is the new poster girl for the insurance defense bar.
Ms. Truitt was on long term disability with Unum for years while at the same time apparently performing tasks she allegedly wasn’t physically able to perform and acting like a world traveler while she said her disability prevented her from traveling on her job.

She received substantial benefit payments from Unum from 2002 till 2009 when Unum denied her claim based upon new insights into her actual life. These insights were provided by 600 emails and travel itineraries covering several years.

Ms. Truitt’s demise was caused by a former boyfriend who blew the whistle and brought her LTD benefits run to close. Apparently, there is truth in the saying, “Hell hath no fury like a ‘man’ scorned”.

The saga begins in 2003 when she began receiving benefits for leg pain which prevented her from lifting, walking or sitting. The disability made carrying bags and sitting on a plane for long periods impossible, she said, and these tasks were an integral part of her occupation as an attorney required to travel and carry bags and exhibits.

Although surveillance videos and medical evaluations obtained by Unum indicated otherwise, Ms. Truitt was able to defend her receipt of benefits until the “ex-friend” provided emails, photos and travel itineraries showing her doing everything she said she couldn’t do. Her benefits were halted but she managed to get Unum, one of the toughest on claims in the insurance business, to reinstate them

Ultimately, Unum prevailed in court. The Truitt opinion details a high-flying life which would have been impossible with the disability she claimed. The opinion is worth reading, Truitt v. Unum Life, 2013 WL 4777322 C.A. 5 (Tex.) (No. 12-50142), to show the details of how flagrantly Ms. Truitt appears to have flouted the rules of disability.

Even though Unum is suing for the return of $1 million it claims was wrongfully paid to her as benefits, the damage to others caused by Ms. Truitt’s apparent conduct is much worse.

Hurt more are the thousands upon thousands of ERISA and DI claimants who are suffering from disabilities that really prevent them from working and now will have to overcome the Truitt case which is bound to be raised by insurance companies whose first instinct is to believe that all claimants are looking for a free handout.

That’s why we called Ms. Truitt a “poster girl” for the defense bar. Those of us who practice disability claims law for plaintiffs will no doubt have her case thrown up to us time and again in future. Our own experience, however, is that very few people seek disability benefits without legitimately needing them. We find that the vast majority of people want to be productive, accomplish something and earn their own way in life.

Of course, defense counsel will at the same time ignore the Court’s awareness in the Truitt opinion of Unum’s history of misconduct in ERISA matters. We, like Unum, do not in any way condone Miss Truitt’s apparent conduct in this matter. We also point out to Unum that history counts.

Insurance companies try to paint claimants as dishonest malingerers who are looking to avoid work and receive insurance benefits. They tend to paint all claimants with a broad brush. Truitt shows that sometimes they may be right.

In the vast majority of cases, they are wrong!

A Careless Phone Chat May Be A Claim Killer

We cannot stress too forcefully the dangers of treating doctors talking with disability insurance company physicians about disability claimant patients. It is amazing how many times the discourse of these “peer to peer” communication sgets garbled and ends up being bad for the policyholder, the doctor’s patient,

A treating doctor may think it is collegial courtesy to speak with a disability insurance company doctor. But, the treating doctor should keep in mind that the colleague is actually an employee or, at least hired by an insurance company which is intent on finding a reason to avoid paying a patient’s long term disability benefits.

Attorneys who represent claimants should do their best to advise their client’s doctors of the dangers of dealing with the insurer and the care which must be taken when doing so. We have spoken before about the perils of completing Attending Physician Statements (APS).  But completing these APS forms, with awareness of the pitfalls, is preferable to chatting with a physician, employed by the insurer, about your patient.

Doctors should be warned that the “friendly” chat with a colleague may be manipulated by the colleague into words that spell death for the patient’s claim. There is frequently no written record of the dialogue and the doctor on the insurance company end may very well hear and interpret the conversation in a way the treating doctor never intended.

When such a conversation is reported to the insurer and incorporated into the insurer’s record, it can be devastating to the claimant even though the conversation was misreported, intentionally or not.

It is common knowledge among attorneys who practice mostly in ERISA and private disability claims that disability carriers have stables of doctors who earn a substantial amount of their income by reviewing claims from those carriers. Insurance companies would not be likely to keep feeding these doctors if their opinions didn’t tend toward favoring the insurance company.

The upshot is that all information should be provided in writing. Questions should be asked in writing and answered in writing. When the conversation is written, it speaks for itself. If the insurance doctor needs clarification of a patient’s status, the question should be put in writing to the treating doctor with a copy to the patient’s lawyer. The response from the treating doctor should also be written. Nothing should be left to chance, bad hearing, misunderstanding, misinterpretation or any other possible reason for miscommunication.

A treating doctor’s support is essential to obtaining much needed benefits which will help the disabled patient and the family live while a patient is unable to work. Attorneys should warn doctors at the start of a case not to talk or communicate casually or carelessly with the insurance company or its doctors. Any questions or requests must be in writing. The same for any response.

Disaster for a disability patient may be only a phone call away.






Don't Get Boxed In On A Medical Form

If you ever needed some proof that disability insurance companies are fully invested in the idea of not paying benefits, no matter what, read Miles v. Principal Life, 2013 WL 3197996, a decision handed down by the 2nd Circuit Court of Appeals in late June.

Among other “missteps”, Principal totally ignored the expertise of its own examining physicians and demanded objective proof of the claimant’s tinnitus, which even their own doctors said was not possible. Principal denied the claim because Mr. Miles couldn’t provide proof of a condition which Principal’s own doctors said was not objectively provable.

The opinion contained additional important points on matters which we have commented in other posts. One was the common sense adoption by the Court that a claimant’s long work history enhances credibility. Statements of this nature are beginning to find their way into opinions as a telling point when proof of the claim is subjective and credibility is a major issue.

Another important point is that claims cannot be rejected just because they are based on subjective complaints of pain. The Court reaffirmed its holding in Connors v. Conn. Gen. Life Ins. Co, 272 F. 3rd 127, 136 (2nd Cir. 2001), that it is arbitrary and capricious to disregard evidence of pain because it is subjective. In such cases, the Court implied, credibility is an issue and the insurer must enunciate why a claimant is not to be believed.

We also cannot stress too forcefully the dangers of treating doctors limiting themselves to reports of their patient’s condition to a form provided by an insurance company. Insurance companies are not in the business of paying claims. Physicians must understand that the forms insurers provide to a claimant’s doctor are designed to limit the report to the barest details so as to make the patient’s claim appear skimpy and suspect.

Many busy physicians conform their answers to the information specifically asked for in the form and do not add information not specifically asked for. This can play right into the disability insurer’s hands. Disability claims not only have to prove their illness or injury, but also why that illness or injury prevents them from doing the work they were insured for.

Even if the doctor is careful and adds notes to amplify the limited space available on the form so as to be more accurate and forthcoming, the insurance company may just ignore this additional information, as it did in the Miles case. Insurers will stick to the form box answers in coming to a decision if it is in their best interest to do so.

Medical answer boxes on disability insurance forms are convenient for physicians but can devastate a patient’s claim if the doctor fails to elucidate when a limiting form box answer is incomplete.


Insurance Companies Play Mind Games

If there is one thing you can rely on, it is that insurance companies will move heaven and earth to turn a physical disability claim into a mental or psychiatric one. The reason is obvious – most group disability policies and many individual policies limit benefits in psychiatric case to 24 months. In disability claims not caused by mental or psychiatric illnesses, disability payments usually run to age 65.

Clearly illustrating this insurance company partiality to mental problems as a disability cause is a recent case in Oregon involving an accountant who had worked for a large national accounting firm for 30 years before he was stricken with fainting spells and slowness of speech and thought. It is a prime example of the lengths insurers will go to convert a disability arising from closed head trauma to a disability based upon mental depression.

In Henarie v. Prudential, 2013 WL 2359009, D. Or. (2013) the Federal District judge wasn’t baffled by the tangled history of the case. Claimant’s doctors had at first blamed his disabling condition on depression. It was only after further symptoms became apparent that the doctors changed their opinion, citing head trauma as the cause of Mr. Henarie’s disability.

To our mind, the most interesting part of the decision was the Court’s observation that Mr. Henarie had been a high achiever who had worked at double the pace required of him by his accounting firm throughout his career. The Court also noted that he had continued at work during a period when he was suffering from a bout of mental depression. Yet, Prudential’s doctors indicated he was malingering rather than making a legitimate claim.

Inconvenient facts rarely discourage insurance companies from arguing what is in their own best financial interests. Insurance companies regularly try to get judges and the public to believe that an otherwise honorable, hard-working person who has an exemplary work history over many, many years, would nevertheless wake up one day and decide to bilk his or her employer and the long term disability insurer because they decide they don’t want to work anymore.

In Henairie, the Court looked closely at the strenuous effort the plaintiff’s doctors made to come up with the truth even though it required them to change their original diagnoses. The Court questioned whether the insurance company doctors had even reviewed the appeal and exhibits. The Court agreed with Prudential that their doctors need not disclose the material they reviewed, but, he continued, “…their opinion ought to reflect that they read and digested Henarie’s arguments.”

This was a complex case with the claimant’s doctors changing their diagnoses after obtaining and reviewing more facts, but it was also very basic with the court considering things like the long work history of the claimant and the very simple tenet that if an insurance company doctor is going to render a medical opinion, the doctor should at least give the reviewing judge the feeling that the doctor has read and considered the medical evidence of the other side.

Common sense never hurt a court decision.




Hope For Disabling Pain Sufferers

Wouldn’t it be great for disability claimants to have a reliable test to show the level of pain they are suffering? If you have an ERISA claim based on pain and are dealing with an insurance carrier with the usual insurer attitude toward disability claims, it would be the greatest of boons. Such a test would go a long way towards overcoming the dread “no objective evidence” mantra typically used by carriers to deny chronic pain claims.

Most insurance companies treat all but the most obvious disability claims with a heavy dose of “salt”. Denying a claim is almost a “knee-jerk” reaction, especially a claim which is based upon “pain” which has no objectively established physical component to support it.

There are a multitude of conditions which generate pain, some of which may not be readily apparent on an X-ray, MRI or EMG. That doesn’t make the pain any less disabling. But, you can bet that a claim based on pain, the cause of which is not clearly apparent on an X-ray or MRI, will likely draw a rejection from an insurance carrier.

Now there is hope. A recent study done at the University of Colorado Boulder found unique neurological signatures for pain in brain scans caused by heat. The brain “signatures” seemed similar in a variety of study participants. A great deal more work is to be done before any scientifically premised conclusions can be drawn. But the study seemed to confirm, with 90 to 100% accuracy, the degree of pain a participant was feeling in response to a measured level of heat being applied.

Should this research lead to an accurate, objective pain measurement, it will be an earth shaker for disability insurance companies. No longer will they be able automatically to turn down legitimate claims because they are based solely on the claimant’s “subjective” report of pain. With a scientific and reliable measure of pain, insurers will have to deal with the reality of such a disability.

Such a measuring tool will also help insurance companies detect true malingerers with a degree of certainty which will write “finis” to their spurious claims. We also welcome this improvement in claims administration.

While we wait for science to catch up on this issue, thousands more legitimate claims will be denied because there is no “objective” way to prove pain.

Hopefully, the end to the uncertainty of subjective pain complaints is in sight.




Erase Online History At Your Peril

If you have decided not to worry about how your social media antics might affect a disability claim litigation because you believe you could always delete your online history,  you’d better think again.

The ever-developing law on the meaning and use of social media in disability insurance litigation became more defined in a Federal District Court case which found that if and when the case goes to a jury, the jury would be given a “spoliation” charge by the court.  See Gatto v. United Air Lines, Inc., et als, 10-cv-1090-ES-SCM (U.S.D.C., NJ).

A spoliation charge tells the jury that a document that was destroyed by a party, even online, was evidence.  It further instructs the jury that it can infer that the party who destroys or prevents production of a document does so out of a fear that the contents of the document would harm that party’s case.

We warned readers about the dangers of going overboard on social media to impress friends or to express joy at a momentary easing of a medical condition. To Tweet Or Not To Tweet.  Being seen on the Internet doing something you say you can’t do for work, even if you do it for just a moment, can cause loads of heartache if you are pursuing a claim.

Insurance companies will jump on that moment’s indiscretion and try to build it into a mountain.  They will try to take that moment and build it into a 40-hour week, saying that the moment proves you can work at a job just like everybody else

In this case, plaintiff denied trying to intentionally destroy evidence, saying he deactivated his Facebook account because he had received notice that an unknown IP address had accessed it.  He failed to reactivate the account and after 14 days, Facebook, as was its policy, automatically deleted the contents of the account.  Plaintiff tried to reactivate the account after 14 days, but it was too late to save the data.

What’s to be learned from this is what we expressed in our earlier blog - Don’t create a problem in the first place by kidding around or trying to be macho on a social media page.  If you don’t do something silly that your adversary can use as evidence to hurt you, you won’t have to worry about it.

It is obvious that if you are in a litigation to be decided by a jury, the last thing you would want is an instruction to your jury that the jury may infer that if a document (or a video) was not produced by you at trial that you kept it back because of fear that the contents would harm your case, if produced.

With all the heartache a litigant usually has to go through to make good a claim against a disability carrier, the last thing on the list should be to try to redeem a moment’s fun on the internet which winds up being a trial disaster.





"Residual" Adds Protection

Many people don’t realize that you actually don’t have to be flat on your back to get financial help from a disability insurance policy.  Many policies provide for partial disability which can provide substantial disability benefits even after your medical crisis or injury have improved.

This fact was pointed out in a recent Wall Street Journal article by financial planner Michael Relvas, Rockville, Md., who noted that it is sometimes very hard to know about this benefit because many times you need a code breaker to decipher disability insurance contract language.  However, it is definitely worth the time and effort to find out if you have this benefit.

From an actuarial perspective it has been shown repeatedly that the risk of  suffering a partial disability is substantially greater than the risk of suffering total disability.  Yet, many disability policies do not provide benefits for only partial disability.

Residual benefits are the key words in determining if you have such coverage in your disability policy.  If you are fortunate enough to have it, then you may receive benefits even if you are able to return to work, provided, in most cases, that your income is at least 20% less than you were making before your disability struck. 

You may be entitled to residual benefits which will bring your post-disability income up to  80% of your pre-disability income. 

Mr. Relvan also points out that residual clauses in older policies may be more valuable.  Many older policies will pay benefits till age 65.  Newer policies typically pay residual benefits for only 2 years.

Not all disability income policies have residual benefit coverage.  Particularly if you are the owner of a small business or in a profession, such as medicine or accounting, this type of coverage can be vital in the event of a disability.

As we have said before, it is vital to read your insurance policy before a triggering event rather that after one.  Before, you can do something about a gap in your coverage.  After, you are out of luck.

When it comes to protecting income, you have to be thoughtful.  Medical disabilities often come with longer, drawn out recoveries which may permit a return to an occupation, but at a less remunerative level.

You have to decide:

Do I need insurance coverage for this eventuality?

"Little People" Are "Our People"


The above holiday card message from a client reminded us of what our disability insurance practice is all about – “little people”. “Little people” is not a reflection of a claimant’s standing in the world. It describes a claimant’s position when fighting a mammoth insurance company for policy benefits.

No matter how wealthy or well connected you may be, your wealth and power pales in comparison to the resources of an insurance company. They not only have the “bucks”, they have armies of claims adjusters and experienced insurance attorneys and plenty of ways to throw a monkey wrench into a claims procedure.

Luckily there are legal procedures which level the playing field somewhat so long as you know how to use those procedures properly. Those who practice this type of law do know and help to bring an insurance company down to a size which is manageable by a claimant. We have been doing this for more than 30 years and never once worked on the insurance company’s side of the street!

Being able to bring hope to those insurance claimants who are overwhelmed by the thought of what they are up against is an added bonus to the way we make our living as attorneys. It helps us to keep going when things get rough.

The client who wrote the holiday card was fearful of going ahead with her LTD claim when she first came to see us. We encouraged her to move ahead with her claim after reviewing her circumstances. She had a perfectly valid claim under her policy.

There should have been no question that her carpal tunnel condition kept this accountant from working as she couldn’t operate a computer or an adding machine without severe pain and numbness. For an accountant to be unable to operate a computer or an adding machine is almost the same as a carpenter being unable to use a hammer.

But, did this obvious fact dissuade her insurance company from terminating her disability claim? Hardly. One of the biggest moneymakers for insurers is discouraging their policyholders from pursuing valid ERISA and private disability claims. After all, when a policyholder drops a valid claim, the benefits payments go from “Debit” to “Profit” for the insurer.

Although she was discouraged and doubtful about whether to challenge her insurance company’s denial of her claim, this client was resilient enough (See “Wimp”) to be able to take on the challenge after we spoke and take the fight to her insurance company. She recognized the insurance company denials and tactics for what they were: A ploy to make her drop her claim.

With help from us, the insurer reconsidered on appeal and now pays her disability benefits.

What makes this claim stand out is that a claimant was brought back from the abyss of giving up a rightful claim which would have made her life a greater struggle because of her finances. She still can’t work but has the security of the disability insurance benefit to which she is entitled to under the terms of her disability policy.

Her card said, “…thanks for watching out for the little people and keep being defender of the faith!”.

Watching out for “little people” is what we have been doing for more than 30 years, particularly when ordinary folks are matched against insurance Goliaths and their “denial machines”.

We intend to keep doing this until we can be of no further use to “little people”.

Insurance Noses And Faces


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!





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.





Disability Insurance Discouragement

Some short term disability insurance carriers seem to have become enamored of a new excuse for stopping disability benefits:

                                       “You were fired so you lose your benefits.”

We had just completed the task of convincing a carrier that their policy gave it no authority to stop benefits because a covered employee was terminated, when we took on another case on behalf of another policyholder against another carrier on the same issue.

Is this the new ploy companies are adopting to discourage disability income claims?

This tactic is patently ridiculous. If this insurance company interpretation of policy language is accepted, what protection would a policy offer?

* You become employed and as part of your employment, you are made a beneficiary of your employer’s ERISA benefits plan.
* You become disabled and can’t work.
* You start receiving short term disability benefits.
* You are terminated by your employer.
* The insurance company stops paying benefits because your employment was terminated.

It would be almost comical if it were not so serious for the disabled employee and his or her family. Most likely they are without income and have few resources to meet their daily living expenses except for the benefits they are receiving. On top of that the breadwinner is injured or ill, making the future uncertain. It is at that point the insurance company piles on by making the ludicrous claim that because the employee was fired while receiving benefits, the employee is no longer covered and benefits are halted.

What a Catch-22 for an employee!

* An employer pays a premium based upon the insurer’s benefits experience with the employer.
* An employee gets sick and can’t work.
* Insurer starts to pay disability benefits.
* Employer, worried about premiums going up, fires employee.
* Insurer says employee no longer works at employer and is no longer eligible for benefits.
This tactic would surprise someone who doesn’t deal with disability insurance carriers all of the time. But, we who deal with them daily, hardly react because we see insurers weaseling on claims all of the time. If there is a chance the company might discourage the claimant, it tries to do so.

Misinterpreting the language of policies is a major weapon in the disability income benefits denial arsenal. Others are:

* Losing claim paperwork.
* Dubious medical reports from highly paid doctors who don’t even examine the claimant they are reporting on.
* Following the claimant with video cameras.
* Overlooking facts supporting the claim.

The list could go on and on. Suffice it to say that a person with an ERISA claim should protect against these disability insurance ploys by talking with an attorney who knows them and deals with them all of the time.
Don’t give up because the insurance company makes it tough for you.
Making it tough is their first line of defense. They will try it every time.












Feed The Canary To The Cat?

 It is amazing to us how blithely some Washington politicians suggest that turning the health care market over to “for profit” insurance companies is the best answer to the nation’s health care problems. If they spent a few days in the “denied claims trenches” with us, they might develop a different viewpoint.

“For profit” insurance companies are in the business of making profits for their shareholders. Policyholder “protection” is just the way they make those profits.

We see it every day when disability income insurance companies deny perfectly valid claims with perfectly unsustainable excuses. Insurance companies’ first line of defense is to deny, deny, deny. Many times this tactic is enough to discourage a policyholder with a perfectly valid claim. (See “wimp”). Result: The insurance company bottom line gets the benefit of not paying the claim.

After that first line of defense, we see, delay and obfuscation with paperwork, requiring proofs that are impossible to get and are not required by the policy, interpreting language to suit the insurer’s needs and, finally, the so-called Independent Medical Examination (IME).

While the reported cases in ERISA and disability income insurance have favored the insurer because of the fear that a claimant’s doctor may have a slanted view, insurance companies actually have developed stables of servile doctors with slanted views who never seem to find a disability that they can’t find a way to overlook.

While the law as it stands still gives no more weight to a treating doctor’s diagnosis, Federal judges are realizing more and more that an IME should be scrutinized carefully.  Courts have come to realize that an Independent Medical Exam may be “independent” in name only.

Add to this the recent $40 million state settlement with MetLife where the company scrupulously searched for info to stop making benefit payments it was already making but didn’t review the same records to discover when it should start making payments to beneficiaries who were unaware of their entitlement. Not only that, MetLife didn’t make the required escheat payments to the states on these unclaimed benefits.

Also, hark back not too many years and you come up to the Unum settlement with the states in 2004 in which Unum’s totally unsavory system of dealing with disability claims was revealed for all to see.

Why, oh why would anyone, even a Washington politician, have any desire to turn the welfare of sick and elderly Medicare beneficiaries over to private insurers?

Medicare is designed to make older people’s lives a little easier when they become sick or disabled. Private insurance companies are designed to make profits for shareholders.

And, never the twain shall meet.



Looking Honestly At Opioids

A recent article in the New York Times pointed out a serious problem for disabled people seeking to alleviate pain – Opioids!

Narcotics, such as Percocet, Vicodin and Oxycontin, are strong and may be addictive.  Yet, they are being prescribed more and more for injuries for which they are not appropriate. In effect, they are “overkill” and pose a danger to the patient.

The NY Times article tackled the difficult challenge of health care these days – cost.  One insurer, Accident Fund Holdings, claims that when medical care and disability payments are combined with the use of a narcotic like Oxycontin, the cost is nine times higher than when the injury is treated with a non-narcotic.

Accident Fund put the average insurance cost of a disability claim at $13,000, but when  Percocet-like drug was prescribed, the average cost of the claim tripled to $39,000.  When a drug, such as Oxycontin, was prescribed, the average cost of the claim shot up to $117,000!

This increase in costs is attributed not only to the higher cost of the drugs, but also to the common side effects, such as drowsiness, lethargy and addiction.  Such side effects do not facilitate a person trying to overcome a disabling illness or injury.

Some of these consequences can be attributed to the drug companies which aggressively market their products while keeping the downsides of taking them under wraps.   Others can be attributed to the public which believes the ads and wants relief NOW and damn the consequences.

Perhaps the most important factor, often overlooked, is that health insurers are much more willing to pay for cheap, generic pain medications than for the costly therapy which is likely to be more effective in helping the patient to recover.

The problem is that such an approach is short sighted and leads to claimants whose symptoms have increased in severity and in length of disability because of opioids.

Some insurers are finally seeing the light and trying to limit the use of these drugs to only cases in which they are appropriate.

 States, such as New York, California and Washington, are proposing rules to curb unrestricted use of these drugs, to cut down on the possibility of addiction or other unwanted effects.

Use of opioids can have serious, unwanted consequences.  It’s time doctors, insurance companies, government and people with disabilities took a good, long serious look at them.

Note:  In response to this problem, Blue Cross Blue Shield of Massachusetts just announced that as of July 1, it will no longer permit physicians to write opioid prescriptions for more than 30 days without a mandatory review by the insurer, except  in cases of chronic conditions, cancer or for the terminally ill.



To Tweet Or Not To Tweet?

  “That’s a great picture of you on Facebook, dancing on the table. We really got a kick out of it. Oh, and by the way, your disability insurance benefits are terminated as of last Friday.”

This is the reality of social media in today’s disability insurance claim wars. Photographs and information that you post online can be seen not only by your friends and family, but by everyone, including insurance claim defense attorneys and adjusters.

Anyone with an adversary out in the great beyond has to be aware that when they go online their life becomes an open book, particularly when they post on social media, because this is when they put on a “happy face” for friends and family.

Beware, insurance companies and their minions are on the prowl for anything posted by or about a claimant which may in any way throw a disability claim into question. Once an insurance company sees such a post, you may be sure it will try to use it to torpedo a claim.

Insurance companies are not behind the times. They turn to social-networking sites and social-media data to find out all they can about their policyholders’ behavior and activities. They are looking for any excuse to deny claims.

Fun is fun and everyone enjoys a good laugh. But, it’s not a hoot when an insurer takes a 30-second video clip and tries to turn it into a lifetime of no benefits for you. A truly disabled person may be able to perform certain functions normally for a minute or even longer, but can they perform that function 8 hours a day, 5 days a week? Insurance companies just need a 30-second video clip to ignore that question and go for the jugular of your claim.

Getting benefits from insurers is difficult enough without adding that 30-second video to the mix. Be aware that what you or your friends make public, is public forever and insurance companies are constantly on the prowl for anything that will make a claim look bad.

If you wouldn’t want to tell or show an insurance claims adjuster something, don’t post it on Facebook, Twitter or any of the other social networks.

There is a very good chance that it will wind up in your insurance claim file.

So, think before you post. The claim you save may be your own.




Prescription For Doctors

Doctors have more problems with disability income insurance claims than most other occupations, because:

 * They never read their disability policy until they have to make a claim. * Policy benefits are usually higher because they make more money.

 * They are too busy to change coverage when their situation changes.

 * Their duties as physicians are more likely to change because of specialization or increase in skills.

 * The terms of their policy are so complex that they don't truly understand them.

This medical profession problem was succinctly pointed out by T Keith Mangrum of Medical Group Insurance Services, Inc., click here, when she pointed out 10 things a doctor doesn't want to hear when making a claim, in an article in MD Preferred,click here, an online publication for physicians. While the article dealt well with the front end of the MD disability claims process, it did not deal with the back end, i.e., what does a doctor do when faced with a denial of a legitimate disability benefits claim?

As we have said many times before, disability insurance companies have a litany of "reasons" why they should not pay benefits. Some of these reasons have a foundation in law and some do not. Since the policy is the contract which governs the insurance relationship, it is the law of the claim and dictates the rights of the doctor to receive benefits and the insurance company to refuse to pay.

So, the first thing every doctor should do is READ THE DISABILITY INCOME POLICY NOW!!! Doctors, of all people, are aware that illness or injury can strike without warning, at any time of the day or night. No one is immune to catastrophe. After reading the policy, if the full meaning isn't clear, get someone who knows, like a knowledgeable lawyer, to help you understand.

Once disaster strikes, the doctor is stuck with the terms of the policy and can't change them. If the policy doesn't afford enough coverage there's nothing to be done about it. Reading and understanding the policy before the doctor has to make a claim should help take care of the front end. What about the back end - if there is a denial?

As we have pointed out here so many times, insurance companies are adept and motivated to throw roadblocks in the path of benefits seekers even when their reasons for denying a claim sometimes border on the ridiculous. Insurers do so because they know a certain percentage of claimants will give up and allow the insurer to drop what they should have paid in benefits to the company's bottom line.

The stakes in a physician's disability income insurance policy are usually high and give the insurance company more reason to contest the claim. Before a doctor gives up on such a claim it must be absolutely clear that the claim denial is legitimate .

This goes double when the claim is covered by a group policy, purchased by an employer, of which the physician has no firsthand knowledge. To have the policy explained to the doctor by a Human Resources manager who works for the employer and who has no legal understanding of arcane ERISA insurance law and the sometimes questionable tactics of insurance companies, may not be the best thing for the policyholder. So, what is the best thing?

First, read and completely understand the disability income policy. Does the protection it affords them and their family do the job? If not, they should make the desired changes before disaster strikes. And, if they ever should be so unfortunate as to have to make a claim for disability benefits, they definitely should not take an insurer's claim denial as gospel. It is in insurance company genes to almost automatically reply to a claim with a denial, hoping the claimant will "wimp" out and go away.

Doctors know medicine, but they are not experts in insurance law and claims. Don't stand alone. Get a veteran, knowledgeable disability claims lawyer to review your situation and give you an opinion on the validity of the denial.

Only then can the doctor make an intelligent diagnosis of a disability income benefits claim.

The Client-Patient Comes First!

Although doctors and lawyers handling an injury claim for a client-patient should always cooperate, disability income insurance claimants have a most pressing need for ongoing and speedy communication among their medical experts and attorneys. Disability income claims require medical reports that meet special standards and must be filed within strict time limits.

In view of these constraints, it is amazing how many doctors and lawyers can’t seem to get along.

It’s common knowledge that lawyers and doctors, as a class, generally don’t like each other. Each profession has had some bad experiences in dealing with the other, particularly in the area of medical malpractice lawsuits, but that’s no reason to shortchange a claimant-patient, locked in battle with an insurance company. By not helping each other to understand the important parts of a claimant’s case, shortchanging is exactly what the professionals may be doing to their client-patient’s disability income case

Does anyone doubt that the lawyers and doctors, working on the defense for the insurance company, coordinate their efforts to try to put their best foot forward for their client? Why shouldn’t a claimant’s doctors and lawyers be able to work together to present the best case for their client?

The basic problem seems to be that the claimant’s doctor and lawyer are not employed and paid by a single entity, as are the professionals hired by the insurer to defend against the claim. Without this unitary control exercised by the insurer, who is paying them, professionals are subject to their past experiences and prejudices and, sometimes, one profession finds it difficult to cooperate with the other.

It can reasonably argued that an attorney who has spent the best part of his or her professional life reading and interpreting insurance policy language and dealing with insurance companies, is best qualified to know what is important and necessary to include in a disability income claim submission to the insurer.

On the other hand, doctors are clearly best qualified to make medical and psychiatric findings and to produce the necessary medical reports required by insurance companies.

With the expertise of each profession clearly established, and both having the same client-patient, why shouldn’t they be able to work together to present their client-patient’s claim in the best light?

Both professionals should want to do the best for their client-patients. In actuality, they don’t many times, because they view the needs of the case from their own medical or legal standpoint only and do not understand the other profession’s view.

Doctors and lawyers seem to have no patience or inclination to take the time to understand or to trust the judgment of the other profession. Because of this, client-patients do not, in some cases, get the full benefit of the professional knowledge and experience they need

Both professions should understand that the other is busy and overwhelmed with paperwork. Extra time is not usually available to either. Any unnecessary request, one to the other, should be avoided.

But, in the interests of the client-patient, they must communicate. Mistakes or ambiguities in a medical record or report can be fatal to a disability income claim and leave a patient to face a handicapped future without income for the patient or the family.

The attorney must take the time to explain clearly to the doctor what questions the medical or psychiatric reports must answer to meet the requirements of the patient’s insurance policy.

If the lawyer and the doctor retained by the claimant to press his case before the insurer don’t do their jobs properly, who will do it?

If the doctor and the lawyer approach each other in a considerate, respectful manner, there should be no problem in doing their jobs for the client-patient in a professional way. If the doctor and lawyer approach each other with a chip on their shoulder, there is a big problem.

The disability insurance client-patient has enough problems dealing with the insurance company. That’s why the professionals were retained. It is incumbent upon them to drop the “attitude”, if any, and get on with the work they were hired for.










Addiction Is A Disability

  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.






A Simple "Thank You"

Because of a relatively few bad apples, the vast majority of lawyers have a mostly undeserved rep with the public.

Lawyer jokes abound and lawyers’ friends are only too happy to share the latest one with their pals who are members of the bar. Such conduct on the part of our friends doesn’t bother us one whit. We know that with all of this laughing and “hoo-hawing”, the first person these seemingly disdainful friends call when there is a serious problem of any kind is the butt of their lawyer jokes – us.

It makes it kind of easy for us to bear the jokes when we know that when the chips are down, the “laugher” is going to run “crying” to us for help and advice.

The reason we are on this subject at this “up” time of the year is an email we just received from a client, which makes all of the hard work, stress and lawyer jokes worthwhile.

Down through the years, we have come to understand that most clients consider the rule of thumb for lawyers is:

If the lawyer gets a good result, the client considers it is because the client had a peachy case; if there is a poor result it is because the lawyer handled the matter badly.

With this mantra stacked against us, it is really tough to get even a left-handed compliment from a client, no matter what the result.

That’s why we were so pleasantly surprised and delighted when one of our clients, whose matter was resolved in early 2010, thought it appropriate to write us to say “Thank You” in a heartfelt and sincere way. In our experience, it is unusual for a client to see and understand the value of what lawyers do beyond the fees we get paid. It is even more extraordinary when the client feels the need to communicate that feeling to us, especially long after the matter is concluded.

The email was just a few words, but it goes up in our Hall of Fame:

“December 28, 2010

“Dear Mr. Quiat:

“It is the end of the year a time for reflection and giving thanks. I wanted to let you how thankful I am for the services you provided us. I have kept your voice mail on my cell phone, it cheers me up everytime I listen to it. Thanks once again. “Best wishes for a happy, healthy, and prosperous new year. Good luck digging out from the snow!
                                                                    “a very grateful and appreciative client,…”

This matter involved a medical doctor who had an unusual medical problem on top of a particular clause in his policy which would, at first blush, seem to preclude any disability income benefits for him. The solution, which led to full benefits for him, took a close reading of the policy, intense medical research and a clear, well-reasoned appeal to the insurance company.

The fact that the work on his case followed the normal pattern of what we do in matters of this kind did not hide the value to him of what we do. And this doctor felt that what we do requires a THANK YOU even long after the matter was concluded.

Such thoughtfulness touched us deeply and brightens our recollection of the work we did in 2010. For that I thank the doctor from the bottom of my heart. It’s good to know that someone out there really understands what we do.

                                                  A Happy and Healthy New Year To All!!!

















A box of candy, a pound of cookies, a smiling “Please” or “Thank you”, may be of more help in pursuing a disability income insurance claim than you might think. But, not to the insurance company (though it never hurts to be polite and civil despite the way your claim is treated).

Kathleen, our gal Friday on disability claims, remarked to us the other day that she sometimes notices that our clients who bring a box of candy or some cookies for their doctor’s office staff once in a while, seem to get quicker attention paid to their forms and other insurance claim requests, than those claimants who go empty-handed.

When you think about it, it makes sense. People tend to reciprocate for kindness. Doctors and hospitals and their office staffs are people (even though sometimes their attitude makes one start to doubt it). And, many times these people are inundated by requests from patients and their insurance companies to complete an endless stream of repetitive forms on treatments, diagnosis and costs.

And, as is usually the case, these unglamorous office jobs get little attention from patients because they think they are relatively unimportant. And, they are when it comes to diagnosis and treatment, which is the reason you go to a doctor or hospital in the first place.

But, when your illness or injury becomes a claim for disability, the picture changes. The people who do the billing and the transcribing of reports and the filling out of the endless flow of forms, become the primary focus of your needs because you can bet the insurance company will demand reams of reams of papers from your doctors, before giving your claim serious consideration.

Couple this fact with the usually overworked doctor or hospital business staff, being
hard-pressed with overwhelming demand for information, and it’s easy to see how things can get jammed up.

So, just as in the everyday business world, a kind word or a small gift of appreciation goes a long way toward name recognition and a desire to reciprocate for kindness. In an overwhelmed office, if you are not one of the crowd and you have been pleasant to deal with, your file may just be moved to the head of the list of things to be done.

As in everything else, it never hurts to show appreciation.


Chronic Fatigue Is Real

Chronic fatigue syndrome is not hoax. As long-time disability income insurance attorneys, we have seen too many people devastated by this disease to believe that it is not really a severe illness.

People in our line of work generally develop a knack for spotting falsity in claimants trying to wheedle their way into a long term benefits bonanza while still having plenty of capacity to work. We have always found that people truly suffering from CFS are really ill, although medicine has failed to find a viral or bacterial culprit.

Now, it appears that the causes of this devastating affliction are starting to see the light of day.

In an Op-Ed piece in the New York Times, author Hillary Johnson reports that a researcher has found a human gammaretrovirus, XMRV, was present in tissue samples of a significant number of chronic fatigue syndrome patients, going back as far as 1984. Recently discovered, XMRV is the third human gammaretrovirus, the other two being H.I.V. and human lymphotropic viruses, which cause leukemia and lymphoma.

For the full text of the article, see &st=cse.

Hopefully, this discovery is the key to unlocking the mystery of CFS, which has plagued an expanding number of people down through the years. Finding a cause for this affliction would be the first step in finding a cure.

Having seen firsthand the devastation this malady causes in a person’s quality of life, a cure can’t come too soon.




Watch The Fine Print

Being good can be very, very bad for disability income insurance claimants in many ways, all locked away in the fine print of the policy. See Mr. Nice Guy.

A recent New York case added a new pitfall for claimants who try working at a lesser job even when they are physically or mentally not up to it. Insurance companies ambush unsuspecting “Good Joes” waiting for them to fall into the trap of trying to continue to work even if they can’t hack it because of their disability.

The issue in McCauley v. First Unum Life Ins. Co., 551 F.3rd 126 (2nd Cir., 2008) , did not involve the warning we issued in Mr. Nice Guy. McCauley dealt with the insurance company tactic of wrongfully withholding benefits and thereby forcing a disabled person to do anything in order to live, and then claiming that the new work cut off the insured’s right to claim the disability under the terms of the policy.

The First Unum policy in this case contained a provision that if the insured was employed for more than 6 months while earning more than 80% of predisability income, the insured would not be entitled to benefits.

After Unum wrongfully denied him benefits, the insured, desperately needing money to live, worked for 8 months at a salary exceeding the 80% limit. He worked at a company which was sympathetic to his disabling condition and employed him anyway, recognizing the limitations of his disability. But, even with this compassionate help and despite his pressing financial needs, the claimant could not continue because his condition was too debilitating.

Even though the policy was governed by the ERISA statute, First Unum jumped on the issue of claimant’s employment for 8 months, citing the policy language, even though First Unum’s wrongful denial of benefits put the claimant in a position where he needed money to live so desperately, that he was forced to try to work, no matter how trying or demeaning it was to work in his condition.

But, the court, in its wisdom, applied the ERISA doctrine of unconscionability, declaring that to wrongfully deny ERISA benefits and force a disabled claimant to try to earn income at peril to his health, and then to claim this employment destroys the claimant’s right to benefits, is unconscionable and First Unum’s denial of benefits would not stand.

It is heartening when a court recognizes that the reality of just trying to go on living trumps the cold, hard, sometimes unrealistic and impractical, language insurance companies use in their policies.


No Good Deed Goes Unpunished

There’s nothing a disability insurance carrier likes better than a claimant who is “Mr. Nice Guy”. These are people who keep trying to do work even though they can no longer continue the occupation for which they have an “own occupation” policy and have a
clear cut claim for disability benefits.

What’s wrong with trying to keep working, one may be tempted to say? It’s the pioneer spirit. “Don’t give up the ship” and all that.

What’s wrong is that Mr. Nice Guy may scuttle his claim for benefits by trying to work at another job before making a claim under his policy. The carrier may have the right to say the claimant can perform duties similar to the ones he is performing at the time the claim is made, so he is not disabled as defined in the policy and, therefore, is not entitled to any benefits, let alone benefits for the occupation and income intended to be protected when the policy was purchased.
The problem is that “own occupation” is interpreted to mean the actual occupation at the time of claim – not the original occupation for which the insured originally purchased coverage.

So, if you modify your occupation to accommodate a disability, by giving up the duties you can no longer perform, then those duties are no longer considered part of your occupation when you subsequently file a disability claim.

Also, even if the carrier has to pay, the carrier may be required only to pay benefits based upon the salary or income of Mr. Nice Guy’s employment at the time of making the claim. These benefits would likely be much less than the benefits originally contemplated by the policyholder at the time of purchase. And the hefty premiums paid for the anticipated coverage would be gone with the wind.

So, if you have been astute enough to cover yourself and your family with an “own occupation” disability policy and you become disabled under its terms, don’t be a Mr. Nice Guy. To be safe, make your claim with your insurer under the terms of your “own occupation” policy when you become disabled under its terms and before you start doing any other work.

Certainly be Mr. Nice Guy to your family, your friends and even to people you may meet in the street. But, not to your disability insurance carrier.

Give Me Independence Or Give Me Debt

Federal judges finally seem to be coming to grips with phony “independent” medical examinations set up by many disability insurance carriers to deny claims, thereby feathering their own financial nests.

Lately there have been a trickle of cases in which the courts take a closer look at the relationship between the physicians insurance companies use to “independently examine” claimants and the insurance companies themselves. See Solomon v. MetLife, 2009 U.S.Dist.LEXIS 51507 (S.D.N.Y. June 18,2009)

It is no surprise that those “independent examining” doctors, relying in large part or fully on insurance company fees for their living, are frequently unable to see any merit to a claim.

Actually, the insurance company’s “examining” physician oftentimes doesn’t even see or physically examine the claimant. Only the medical paperwork provided by the claimant in support of the claim is “examined”, and it is on this “review of the record” that the doctor bases his or her opinion, most often finding the claimant is not disabled.
While the insurers are doing nothing to redress this obvious tilt of the playing field in their direction by setting up truly independent medical exams, Federal Courts are increasingly recognizing the basic unfairness of the situation.

In making decisions on ERISA disability claims, courts are beginning to take into account the relationship between the insurance company and the doctors they hire and pay as “independents”.
Courts are recognizing more and more that physicians who rely on these insurance “evaluation” assignments for a significant portion of their income know that if they find the claim valid too often, they will soon find no requests for examinations from the insurance company.

No requests, no exam fees, no income.

In fact, these medical exams are such a lucrative business that there are several agencies in the business of engaging doctors to examine claimants for insurance companies. This makes it easy for the companies to have physicians to conduct exams without having them on payroll (and, perhaps, making it look fairer to a casual observer). Such a system makes it easier for doctors who don’t want to actually practice (or are not competent to do so), get exam assignments without having to go through the trouble of looking for them.

However, one would have to be quite naïve to believe that the agencies and the physicians whom they employ for this work are not fully aware of which side of their bread has the butter.

The insurers have found a way to call a medical exam “independent” while retaining almost complete control of its outcome.

With the Solomon case, courts are getting closer to the bone with the purported neutrality of these “independent” physicians. Rather than just accept the statements of these “independent” doctors, the court looks at their personal (substitute “financial”) interest in the outcome of the exam and what they actually did medically to reach their conclusions.

Until a court is satisfied that all of the answers to these questions are fair to both the claimant and the insurer, courts should absolutely reject insurance company ERISA claim denials based upon such purported “independent” medical exams.


Pull In The Welcome Mat




If an adjustor or other agent of your disability income insurer wants to talk with you as a claimant, talk. But, there is no way you should invite the agent into your home or office. Meet the agent at your lawyer’s office with your lawyer present.

By the very nature of the insurer-claimant relationship, it is obvious the insurer is not your friend. Therefore, neither is the insurer’s employee, the adjustor.

An adjustor may try to charm you into a “convenient” visit to your home just to get “your view” of your claim. Don’t fall for this line. The adjustor works for the insurance company which is trying its “darndest” to reject your claim or at least find some reason for reducing it.

Why host a meeting at your home or office which will give your adversary a leg up on how you live, what you own and how tough an adversary you are likely to be? Also, acting as a “host” you are less likely to carefully scrutinize the statement that the adjustor is likely to write as you talk and ask you to sign.

If the adjustor wants to talk, your policy requires you to cooperate and talk. But, the time and place of the discussion has to be mutually agreed upon.

The best place for such a meeting is your lawyer’s office with your lawyer acting as host.


No "Do-overs" in Disability Claims

Because a disability income insurance claim requires you and your physician(s) not only to describe the medical (or psychological) nature of your disability but also why the disability makes it impossible for you to perform your occupational duties, any error or uncertainty is guaranteed to be seized upon by the insurer and used to attack your right to benefits.

Why is it of vitally more importance for a claimant to have good, knowledgeable advice about how to file a disability claim before filing a claim, than it is in filing a claim in just about any other field of insurance? An expert should help you understand the details required to file a DI claim in an accurate, responsible manner, with the proper supporting documents in proper form so that the insurance company will have no technical excuse for rejecting the claim or demanding more information from you before reviewing your claim.

This is particularly so if your claim is covered by the ERISA statute. Giving your insurer the least little edge at the time of filing your notice, provides the insurer with a big leg up in resisting benefits payments to you. This is because the ERISA statute provides the insurer with the first opportunity to declare whether, in its opinion, your claim is valid or invalid. More on ERISA.

It’s the same as with anything else. The party starting off with a decision in its favor has the advantage in that the other party -- in this case you -- has the burden of proof to show that the original decision is faulty. Sometimes when trying to do this, you are forced to rely heavily on the papers and reports you supplied in making the claim and if these documents are in error or are incomplete, they can hurt you in trying tomeet this burden of proof.

While on the subject of filing a claim, an important part of this area is the type of medical and occupational reports which are furnished to the insurer on your behalf. Medical experts are very important to presentation of your disability income claim as the entire basis of your position is that your illness or injury prevents you from attending to your occupation or, perhaps, any occupation.

So, the first thing is to be hopefully treated and examined by a doctor who is fully familiar with and experienced in your disability. However, no matter how skilled and knowledgeable a physician is, it does your insurance claim no good if the doctor can’t or won’t properly communicate the details of your true condition and the nature of your restrictions and limitations to the disability insurer.

So, while you are being treated it behooves you to express clearly to your physician that you expect to make a claim under a disability income policy. You may also explain that since you are disabled and can’t work, under the terms of your policy your future depends on the doctor providing the insurer accurate and complete reports on your condition.

Request that the doctor personally attend to any reports required on your behalf and that the reports be as complete and thorough as possible in describing your condition.

Try to impress upon your treating professionals how much your future wellbeing depends on the outcome of your disability claim and how you would appreciate their full and complete attention to your reports.

After all, just as in treating your injury or illness, the doctor’s knowledge and attention to detail in reporting your true condition determines your future.

Don't "Wrongfoot" Your Claim

Taking the first step in filing a claim for disability income benefits is not nearly the same as filing a claim for an auto accident, which is how many of us have our first claims experience with insurance companies. In fact, it is so different that an unintentional mistake in this first step can bring your whole hope of obtaining a benefit to a crashing halt, never to be resurrected.

In filing auto insurance claims, one usually gets the police report to open the claim and then follows with medical reports detailing the injury as a follow up. This procedure is usually enough to have the insurer either deny the claim or start to negotiate a settlement with you.

Not so with disability income insurance claims. With these claims there is an added factor – not only must you show you were you incapacitated to some degree by accident or illness, but you must also show that the incapacity prevented you from performing your work, either your usual occupation or any occupation, depending on the terms of your policy.

What makes this first step so vital is that disability carriers have large staffs of trained, experienced people going over disability income claims with a fine-toothed comb looking for any omission or inconsistency in the claim submission. It may be that your doctor’s report was too general in describing your disabling condition or that your description of your occupational duties omitted a key element or mistakenly described one of its functions. Without experience in filing such claims you would have no way of knowing you were making such an error.

If your disability income claim contains an error or omission, it will haunt you throughout your upcoming battle for proper benefits. At any administrative or judicial hearing, the insurance company will continually bring up the “warts” on your initial claim form to try to impeach your claim, no matter how you amend it to conform to what is required.

At the very least, the insurer will use the inadequacies of the initial claim to delay paying whatever monies may be due you.

The best defense against this insurance company defense tactic is to file a complete, accurate initial claim form.

Save yourself loads of headache – get it right from the get-go.


Is Cash King For You?

With financial earnings in the dumps and prospects for an early recovery dim, insurance companies with disability income and other long-term payouts on their books are on the prowl for claimants who need cash NOW!

Disability insurers know that many of their beneficiaries are having trouble making mortgage payments, meeting college tuitions or just plain paying their bills in this severe economic turndown.

With long term disability beneficiaries in a stressed and highly vulnerable mode, having lost a good part of their incomes and retirement packages in the stock market meltdown, what better time to dangle a relatively large lump sum of cash in front of the insured?

Policy and settlement buyouts are complex issues and broad experience in successfully negotiating such deals is critical. Insurers like nothing better than dealing with a novice in buyout negotiations, especially if the novice needs the money and allows personal involvement determine the outcome.

How tempting for a beneficiary to grab a lump sum now and not worry about the long term consequences.

Issues which must be carefully considered for the beneficiary are:

* Understanding the true value of the claim.
* Family circumstances and needs.
* Are there other investments or incomes (i.e., annuities? pensions? SSDI?) which will replace the settled-away insurance benefits for the family?
* In view of the nature of the disability, what is the likelihood of the beneficiary living to the end of the benefit term? These benefits usually end at death.
* In view of the nature of the disability, what is the likelihood of the beneficiary recovering the ability to resume work before the end of the benefit period? Ability to resume occupation as described in the policy would terminate DI benefit payments.

To try to answer some of these thorny questions, a knowledgeable, experienced, not-personally-involved, adviser in the beneficiary’s corner is a must.


Kudos to Kathleen

Most plaintiffs’ disability income insurance lawyers are aware of the heightened emotional and psychological needs of their clients – up to a point. Our Kathleen takes up whatever slack our clients miss in the way we communicate with them.

Although attorneys in the disability field know that their clients are usually in pain, economically behind the 8-ball and aching for some one to talk to them about all aspects of their case, attorneys are not always able to spend all of the time on the phone some clients think they require.

That’s where Our Kathleen comes in. She is a paralegal who is knowledgeable about the factual requirements of properly pursuing a disability income claim. But more than that, she seems to have a natural empathy about the human needs of the people filing such claims. And, she makes the time to talk to clients and prospective clients who call our office and need a “listener” who cares, shares and wants to help.

Every attorney in plaintiffs’ disability insurance work would do well to make sure they have an “Our Kathleen” on staff to alleviate some of the stress their clients are feeling as they pursue their claim under the most trying circumstances.

That’s if you can find another Kathleen.


Insurers Love "Docility"

Ever wonder why insurance companies pursue a policy of turning down apparently valid claims out of hand? I have and the only thing I can figure is that they are relying on the “docility” factor. They have found through experience that a substantial number of people will accept a turndown, right or wrong, and do nothing further about it.

One would expect an insurance company to have a tendency to say “no” when asked to pay a claim. That is not what is surprising. What is surprising is that they say “no” in cases where they know they are likely to have to pay. This is because when they say “no”, there are a slew of additional costs in defending a claim which they know they are likely to have to pay anyway.

Why they do this is a mystery which seems to have one likely solution – they do it because it saves the insurers money.

The one thing you can bet on with certainty is that insurance companies can mathematically calculate the probability of any financial result they face. They know how much the legal, medical, court, and internal costs of litigating a claim will likely be.  And, they know these costs are substantial. So, why do they do it?

They do it because they have also calculated the “docility” factor – the chance that a valid claimant will not challenge a denial of a claim for a variety of reasons. Nobody but the insurance companies know the percentage of valid, but denied, claims which are never pushed to a conclusion, but even if the number is between 10% and 20%, the savings turn out to be a big windfall for the insurance companies.

Some of the reasons people may not fight for their rights are innate - they hate conflict and controversy. Other reasons (excuses) are:

  • "You can't fight City Hall", i.e.,insurance companies are too big and powerful ever to be challenged by an individual.
  • They find it difficult to cope with stress.
  • They believe the insurance company acted fairly and made an unprejudiced decision.
  • They won’t take the risk of spending money on fees without a guarantee they will win.
  • They have an aversion to getting involved with a lawyer (I wonder if insurance companies have been fostering all of those “shark” jokes about lawyers). The vast majority of lawyers don’t bite, no matter what the jokes lead you to believe. If they are retained by you, lawyers work for you and only for you and your claim.

There is a whole host of reasons (maybe excuses) why a goodly number of people will not take on an insurance company. And, in that goodly number of people lies a treasure for insurers.

This is particularly so in disability income and long term care insurance claims. The payments for these types of claims can go on for decades and cost millions of dollars. Evading payment on 10% or 20% of these types of claims comes to a hefty amount of money saved for the insurance companies. And, since insurers do this consistently, one has to believe that they know that the “docility” savings more than offset what they spend to defend claims they know they will have to pay – if the claimants undertake and follow through on the job of properly pursuing the claim.

Advice to the leery claimant: Before you become one of the “docility” herd, have a competent insurance attorney evaluate your claim and advise you on if and how to challenge a denied claim.

Only then is it fair to yourself to decide whether or not to pursue you claim.

It's a No-Brainer

The easier things become, the harder some people make them. Wouldn’t you think that when medical science advances so that a patient can swallow a pill and replace chemotherapy with all the expense and trouble it involves, it would make the treatment process simpler? Wrong!

As President Obama said recently, insurance payment protocols, like the ship of state, are humongous, and can’t be changed quickly. Pill treatment, which would seem a no-brainer since it will lead to less medical and hospital costs for patients and therefore insurance companies, should be received with open arms by insurers. Not so.

As reported in the New York Times recently, insurance companies seem to be hung up on the issue of how to classify pill treatment. Drugs which are administered at a clinic or hospital are usually treated as a medical benefit. Prescription drug plans cover pills and normally require copayments which are sometimes substantial.

With all of the talk about how Social Security and Medicare are going broke, why don’t the insurers or the government jump on this opportunity to save big dollars on cancer drug treatment?

Some one in authority should do a fast analysis of what it costs to go to a place, have a trained medical person administer an infusion, have a doctor on premises, pay for the chemicals, the rent, equipment and personnel, and compare it to the cost of the pill medication. It seems obvious that the lesser cost would be the pill even omitting the patient’s loss of time and transportation costs.

The State of Oregon, according to the Times, is the only state so far to deal with the situation. It 2007, Oregon passed a law requiring insurers to reimburse oral and intravenous chemotherapy drugs equally. Other states, including Colorado, Hawaii, Minnesota, Montana, Oklahoma and Washington are in the process of passing similar legislation.

I’m thinking a lot more states ought to be joining the parade – and ASAP.