How does my insurance company define the word “disabled?”
Every long term disability policy contains a very specific definition of disability. If you purchased your LTD insurance through your company, your policy may define disability very strictly, meaning that the medical evidence must show that you do not have the capacity to perform any work at all.
Other company provided policies contain a hybrid definition. For a certain period of time (i.e., one year or two years) you will be deemed disabled if you cannot perform the duties of your job (“own occupation”). But after one (or two) years the plicy changes to an “any occupation” definition.
Some company peovided (ERISA) policies limit benefits to one or two years for certain condition (such as mental health or fibromyalgia), but no time limit for other conditions.
Private (non-ERISA) policies are essentially contracts between you and the insurance company. Most of these policies use an “own occupation” definition of disability.
What is the Difference Between an Empoyer Provided LTD Policy and a Private Policy?
Many employers offer long term disability insurance to employees. Often these employer sponsored policies are relatively inexpensive and the premiums are deducted directly from your paycheck.
If you find yourself unable to work for an extended period of time, you can file a claim under your company sponsored policy. Many times, the first claim you will file is for short term disability and it may cover you for three to six months.
If you remain unable to work after your short term disability benefits run out, you will need to file a second claim – this time for benefits under a long term disability policy.
Sometimes the insurance company providing short term disability will be different than the company providing long term disability. Further, it is often easier to claim short term disability than it is to pursue long term disability benefits.
Employer sponsored short term and long term insurance policies are governed by a federal law called ERISA (Employee Retirement Income Security Act of 1974). ERISA sets out minimum standards for how insurance companies process long term disability insurance claims and your appeal rights. If you have to sue your long term disability carrier in court you will need to do so in federal court.
One major downside to ERISA plans – in federal court the denial by the insurance company to deny your claim will be evaluated under an “abuse of discretion” standard. This means that you (and your attorney) have to prove that the insurance company’s decision to deny benefits was clearly incorrect and not supported by evidence.
Private long term disability policies are purchased directly from an insurance agent or from an insurance company, and are not governed ERISA. They are governed by state law which may give your more rights in litigation. Private policies are often more expensive that group policies but they often provide a higher quality of coverage.
Further, unlike ERISA claims, non-ERISA policy denials are not subject to the difficult to win “abuse of discretion” standard. Instead, judges in non-ERISA cases can award damages if they simply conclude that the insurance company’s decision was incorrect.
My LTD carrier sent me a denial notice – what should I do now?
If you receive a denial of your short term or long term disability policy you should not wait to take action. Most of these policies require you to file your appeal within a set amount of time.
You also need to put your hands on as much information about the policy and the appeal procedures as soon as you can.
Many times, for example, your company may only provide you a summary of your disability policy. We strongly recommend obtaining a copy of the full policy.
The denial notice should provide you with a detailed explanation explaining why you were denied, along with specific instructions about how and where to appeal.
If you would like to speak with us about how to appeal the denial issued in your case, we will identify the policy documents we need and explain the next steps you need to take to appeal a denial.
Can You Help Me Apply for Long Term Disability Benefits?
Yes, we often help newly disabled clients file their claims for short term and/or long term disability. In many cases a thorough and reasoned application can result in an approval and thus avoid the need for appeals and litigation.
Why do I Need a Lawyer?
No you do not need a lawyer to file your short term or long term disability claim. If you file a claim on your own, we encourage you to carefully read your policy as well as the actual application. Make sure you understand how your insurance company defines “disability” in your policy as well as any limitations that the policy provides (for example, many LTD policies put a two year limit on claims arising from mental health conditions, so if you are claiming disability based on both physical and mental health conditions, in most cases your application should emphasize the physical disabilities).
Keep in mind that insurance companies do not exist to pay out claims – they exist to make money for shareholders. ERISA was put in to place to protect employees from insurance company overreach, and state insurance law (to some extent) is designed to protect consumers. Both ERISA and state law set out minimum standards so there is still plenty of room for insurance companies to rely on “mice type” language to deny your claim.
How Much Will I Get if I Win?
If you have a company provided ERISA plan, your monthly payment will depend on the policy option you selected. In our experience you can expect to receive between 50% to 75% of your pre-disability income. However, many group plans we see cap the benefit at a set number (i.e., $5,000 to $10,000 per month).
A private, non-ERISA plan is typically a custom purchase based on how much you pay, and limits imposed by the underwriter. For example if you have a pre-existing heart issue at the time you purchased your policy, your monthly benefit may be reduced or not payable at all if the underlying medical issue that takes you out of work arises from heart issues.
How Long Does This Process Take?
In most LTD cases, there is an “administrative appeal” in which we respond to the insurance company’s denial of your claim and file an appeal with the insurance company. ERISA does impose time limits on insurance companies but there are options for extensions. However, generally speaking, you can expect to wait two to four months for a decison after your application. If you are denied and we appeal, we usually get a decision (hopefully an approval) within six months. If we have to go to federal court, you can expect to wait approximately one more year.
Private, non-ERISA, claims often move more quickly. Wait times for 6 to 18 months are common.
Can I Get Free Information?
Why Trust Ginsberg Law with my Case?
What Does it Cost to Hire a Long Term Disability Lawyer?
We handle long term disability claims under a “no fee unless you win” contingency fee contract. There is no up front cost. The percentage we charge will depend on the complexity and difficulty of your case.