Long term disability cases are really very different than most other types of cases, including personal injury cases and Social Security Disability Insurance cases (although a Social Security Disability claim will have an impact on your long term disability claim – more on that later). Disability insurance companies understand the disability rules and regulations and will use those rules against you. You need an experienced legal team of attorneys and professional staff who understand the rules, and know how to use those same rules to fight back and protect the rights of people filing disability claims.
For example, if your long term disability insurance policy was obtained through a group employer plan then any denial of benefits may be covered under a complex federal law called the Employee Retirement Income and Securities Act of 1974, or ERISA for short. In an ERISA lawsuit, the judge will only review the evidence that was submitted during the administrative review process. An inexperienced attorney and their failure to introduce certain key pieces of evidence during the administrative review process may severely hinder your ability to bring a lawsuit at a later time. You can maximize the chances that your LTD claim will be approved by working with an experienced long term disability lawyer.
If you are considering whether or not to hire a long term disability lawyer you likely have enough worries with respect to your medical treatment, medical bills, and other complications caused by your loss of income and deteriorating health. That’s why it is so frustrating to have to fight with a disability insurance company to get your claim approved. Luckily, there are disability insurance lawyers that can help you through the appeal and litigation process. In this guide, we discuss the following topics:
Table of Contents
- What Is Disability Insurance and How Do I Get It?
- Group Disability Insurance v. Individual Disability Insurance
- What Does Social Security Disability Insurance Have To Do With My LTD Claim?
- What Other Income Offsets My Disability Insurance Benefits?
- What Does My Long Term Disability Denial Mean?
- How Does ERISA Govern Group Disability Claims Denials?
- Buyouts v. Settlements in Long Term Disability Cases
- Why Should I Hire a Long term Disability Lawyer?
- Can a Long Term Disability Lawyer Speed Up a Case?
- Protect Yourself by Hiring a Long Term Disability Lawyer
1. What Is Disability Insurance and How Do I Get It?
Long term disability insurance is offered to help support you as a wage replacement in the event that you’re sick or injured and unable to work. Long term disability benefits (sometimes referred to as “LTD” benefits for short) provide vital income protection to individuals beginning a few weeks to a few months after the onset of a disabling condition. It typically kicks-in once the short term disability benefit period ends.
As with short term disability insurance benefits, LTD benefits are designed to replace a specific percentage of your pre-disability income. Policies typically provide coverage until retirement age, which is usually defined as age 65 in the policy, but may also be specifically defined in the policy.
You can typically purchase long term disability insurance benefits from an insurance agent or through your employer. Individual policies are typically bought and paid for by the insured, separate and apart from an employer. Group coverage, on the other hand, is usually offered by an employer or union, and the premiums are paid (in whole or in part) by the employer. There may be circumstances where an employer will purchase and pay the premiums for an individual policy on behalf of an employee. Conversely, an individual may personally obtain group LTD coverage unrelated to his or her employment by joining a group that has group coverage available for its members.
Some benefits you might obtain include:
- Bi-weekly or monthly benefit payments, which will pay you a portion of your pre-disability earnings on a bi-weekly or monthly basis for the term length of your policy; and
- Comprehensive Rehabilitation Program benefits, which can provide benefit incentives related to vocational (job) rehabilitation, dependent (child) care, workplace modifications, and more.
Long term disability lawyer Nick Ortiz elaborates on the question, “What is Long Term Disability Insurance?” below:
2. Group Disability Insurance v. Individual Disability Insurance
Both individual disability insurance (IDI) and group disability insurance (GDI) programs offer cash benefits for disabled individuals, but there are several differences between the two. Nick Ortiz addresses this below:
One major difference between individual and group policies is that individual policies are underwritten with respect to the individual purchasing insurance coverage, while group policies are not individually underwritten. Instead, group policies are issued by disability insurance companies based on certain underwriting assumptions related to the general health of a group of people.
Another key difference is the type of law that applies to each type of plan. Under a group plan, because it’s through an employer, it’s subject to a federal regulation called ERISA. ERISA was originally enacted in order to make it more affordable for employers to offer benefits to employees such as life, disability, and health insurance, but there were some trade-offs to make it more affordable, and those trade-offs are that they take away certain rights that you have when you go through the decision making process in that type of claim.
Under an individual plan, you’re not subject to the same stringent requirements under ERISA, but you are still subject to whatever the requirements are under your policy.
Your Right to a Jury Trial
For example, one of the key rights that is taken away from you is your right to a jury trial. Second, you are not allowed to introduce any new evidence. The evidence is limited to whatever was in your claim file during the administrative review process and that’s the only thing that the judge can consider in a bench decision.
With an individual plan, you have the right to a jury trial. You have the right to testify. You have the right to have your doctors and your friends and family get up to testify about the changes and impact that your disability has had on your life. That is another major difference is having the ability to testify and introduce even new evidence that’s been developing over the recent months in that type of case.
The Appeal Process
The other major difference when you have a group plan is that you must go through the appeal process directly with the insurance company before you can file a lawsuit. Typically when you’re denied, you have either 90 or 180 days to file an appeal, depending on your plan, and you must file an appeal directly with the insurance company and go through each appeal that the insurance company requires before you go to court. If you do not go through the appeal process and you try to file a lawsuit, then your case will be dismissed by the court for your failure to exhaust your administrative remedies. So it is very critical that you go through that appeal process before filing suit.
With an individual plan, you don’t necessarily have to have gone through the appeal process, although you should really look at what your insurance policy requires, and if there are some required appeals stated in the policy itself. While you’re not subject to the same stringent requirements under ERISA, you are still subject to whatever the requirements are under your policy.
The Standard of Review
The final difference between a group and an individual is the standard of review that a court applies. With a group plan, the “arbitrary and capricious” standard of review applies. What that means is when the court is looking at the case, they have to determine not only whether the decision was wrong, but whether the decision by the insurance company was made without any reasonable basis. That’s a very tough burden for a claimant to overcome because although you can show that the disability exists and one should be entitled to benefits, it’s oftentimes more difficult to show that the insurance had no reasonable basis for the decision. They can oftentimes point to a medical review or report by one of their doctors that says that you’re not significantly impaired, and if they have that type of report, then the court may allow the decision to stand.
In an individual policy, the standard of review is the preponderance of the evidence. It’s the civil standard under state court, not federal court. All you have to prove is that by a preponderance of the evidence that you should be entitled to benefits. That’s a much easier burden to satisfy than the arbitrary and capricious standard that we were talking about. The preponderance of the evidence standard is more along the lines of what you think of in any typical case or when you think of the classic scales of justice. So, when you present your case, the jury just has to decide that they believe your case a little bit more than the other side. Let’s say they believe you 51%, and they believe the insurance company 49%. Whichever side that they believe just a little bit more by a preponderance of the evidence, then that’s the side that they must rule in favor of. That’s a lot easier to establish than showing that there is no reasonable basis for the insurance company’s decision. If you’re using the scales of justice under that standard of review it’s more like you have to prove your case almost beyond a reasonable doubt.
3. What Does Social Security Disability Insurance Have To Do With My LTD Claim?
If you are approved for long term disability, you may be required by the insurance company to file for social security disability. There are many long term disability benefits plans that do have this written in as a requirement. Check your policy to be sure of the language and the requirements. If it is required, you must comply or your LTD benefits may be reduced by the insurance company.
Being approved for Social Security Disability benefits can be a long process – usually longer than the long term disability process. For this reason, having a long term disability policy is good. You can still file for Social Security Disability even while receiving long term disability benefits. Long term disability (LTD) and Social Security Disability (SSD) are two very different benefits programs. Long term disability insurance is a policy you buy (and/or your employer purchases) to help cover your expenses in the event you become disabled through injury or illness. The Social Security benefits program is a government-funded program that you pay for through the government tax system.
The LTD insurance company has an interest in seeing you approved for SSD. If you are approved, this will offset the cost to the long term disability insurance company – making it in their best interest to see you approved. This is why it is oftentimes a requirement in the policy. For example: If you are receiving $2,000 a month in benefits from the LTD insurance company and you’re approved for SSD for $1,000, then you will still receive $2,000 a month in total benefits, but $1,000 will come from the LTD claim and $1,000 will come from the SSD claim. Claimants make the argument that this is unfair; however, the insurance companies will point out that this policy is what keeps premiums low.
Eligibility for Social Security Disability Insurance
To qualify for Social Security disability benefits, you must first have worked in jobs covered by Social Security, worked long enough — and recently enough — under Social Security to qualify for disability benefits, and have a medical condition or a combination of medical conditions that meet Social Security’s definition of disability.
Covered Job Requirement
Social Security Disability Insurance does not cover all jobs. For example, certain federal government employees, state and local government employees, employees of railroads, and children employed by their parents, are not covered by SSDI.
Work Credit Requirement
Work credits are based on your total yearly wages or self-employment income. You can earn up to four credits each year. The amount needed for work credit changes from year to year. In 2020, for example, you earn one credit for each $1,410 in wages or self-employment income. When you’ve earned $5,640, you’ve earned your four credits for the year. The number of work credits you need to qualify for disability benefits depends on your age when you become disabled. Generally, you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify for benefits even with fewer credits.
To be eligible for Social Security Disability Insurance, you must also have a disability defined by federal law. According to the Social Security Administration, “the law defines disability as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.”
A “medically determinable… impairment” is one that “results from anatomical, physiological, or psychological abnormalities that can be shown by medically acceptable clinical and laboratory diagnostic techniques.”
Applying for Social Security Disability Insurance
An application for Social Security Disability Insurance benefits (SSD or SSDI) and/or Supplemental Security Income (SSI) is very easy to initiate and file. You can apply for SSDI in person at a Social Security office, by telephone, mail, or over the Internet. SSI can typically only be applied for at the Social Security office or by telephone conference with a Social Security representative. There is an online application for SSI, but you are only eligible to file your SSI application online if you:
- Are between the ages of 18 and 65;
- Have never been married;
- Are a U.S. citizen residing in one of the fifty states, District of Columbia, or the Northern Mariana Islands;
- Haven’t applied for or received SSI benefits in the past; and
- Are applying for Social Security Disability Insurance at the same time as your SSI claim.
Starting Your Application on the Phone
Once you have contacted Social Security (either through the national toll-free phone number or via your local district office) and advised SSA that you wish to apply for disability benefits, an appointment will be scheduled for you to be interviewed to start the application process. This interview may be conducted in person at the Social Security office, or over the phone. If you select to have a telephone interview (or are strongly recommended to have a phone interview), all of the necessary paperwork will be mailed to your home.
Starting Your Application Online
For SSDI, you are able to start your application for disability benefits by going online to the Social Security Administration website. SSDI is for workers who worked long enough and have paid enough Social Security taxes into the system to qualify for the benefit.[Note: As stated above, you can only apply for SSI benefits online if you meet certain criteria. Thus, even if you have enough work credits to qualify for SSDI, you may want to apply in person so that you have an opportunity to ask questions about the Supplemental Security Income program.]
Starting in Person at Your Local Office
For most disability applicants, perhaps the safest and easiest method of filing a disability application would be to contact the Social Security office closest to you and inform them that you wish to apply for disability. Whether you qualify for disability insurance benefits or SSI can be determined by the Social Security office.
Forms for the Disability Application
There are several forms you will need to file in your claim for benefits, depending on whether you qualify for SSDI or SSI. A Social Security field representative can help you fill out the forms.
To apply for SSDI, you’ll need to fill out Form SSA-16-BK (Application for Disability Insurance Benefits) and Form SSA-3368-BK (Adult Disability Report).
To apply for SSI, you’ll need to fill out Form SSA-8000-BK (Application for Supplemental Security Income) and, for adults, Form SSA-3368-BK (Adult Disability Report).
Many insurance companies will offer you the assistance of one of their representatives to help you navigate your case. Just remember that they work for the insurance company and have an interest in saving the insurance company money if possible.
How a Social Security Disability Insurance Lawyer Can Help
Because of the large amount of paperwork involved in processing a claim it is sometimes worth hiring an attorney to help navigate you through the process or to assist you in making an appointment at the local office. Most Social Security attorneys offer free consultations. You owe it to yourself to research the matter in as much detail as you can and there are times when it may be appropriate to get a second opinion as to whether you should have an attorney with you from the very beginning of your SSDI claim.
If you do not seek the assistance of an attorney or at least research for yourself about how to win your SSD or SSI claim, then you may have no one to blame but yourself for losing your first chance to win benefits. Below we will discuss several ways that having a disability attorney represent you might help speed up the process. One thing to keep in mind: there is no “fast-track” for claimants who are represented by an attorney. However, experienced attorneys do know a few things that might help you get a decision on your claim faster.
Helping You Get Approved In the “First Round” or Initial Application
The fastest way to receive Social Security Disability benefits is to win your claim on the initial application (rather than on appeal, which can take several months or even years). An attorney’s experience in handling claims and in knowing what Social Security is looking for can help increase your chances of winning at the initial application stage. Not all attorneys handle initial applications for Social Security Disability benefits; however, we do handle initial claims here at the Ortiz Law Firm.
If you do find an attorney to represent you at the initial application stage, the lawyer can:
- Assist you in filling out the disability application so that it clearly demonstrates how you “meet a listing” (or equal a listing), or how you are not able to perform any work on a full-time basis;
- Help gather your medical records and other evidence to show your medical conditions; and
- Obtain opinions from your treating doctors or medical providers on your resulting level of impairment and limitations.
Social Security looks for specific evidence of impairments in medical records and medical opinions. An experienced disability attorney can educate your treating physician on such terminology so that the doctor can give opinions in a format generally accepted by the Social Security Administration. A medical provider may also alert Social Security if you have a terminal illness, making your case eligible for expedited processing. Typically, however, an attorney will only take your case at this early stage if he or she thinks you have a good chance of winning.
Getting Your Claim Approved in an “On The Record” Decision
If your original application for benefits is denied, the next fastest way to receive benefits is to request an “on the record” (OTR) decision while the claim is pending a hearing before an Administrative Law Judge. At this stage a Social Security disability attorney can:
- Write a clear and concise brief that satisfies Social Security’s requirements and presents arguments as to why you should receive benefits;
- Update any recent medical records since you applied for benefits;
- Continue to try to obtain information from physicians and other medical providers to answer questions about your condition that may not already be in your medical records;
- Write a proposed decision that, if approved by the Administrative Law Judge (ALJ) assigned to your claim, saves time since you do not have to wait for the ALJ to write the decision; and
- Speak to the Attorney Adjudicator to discuss the specific merits of your case or to negotiate your disability onset date.
Approval at the ALJ Hearing Stage
If your request for an OTR decision is denied, your case will be scheduled for a hearing before an ALJ. If you are applying for SSI and you are in dire financial straits or facing homelessness, an attorney can write a “dire need” letter for you, which can get your hearing date scheduled sooner than normal.
At the hearing level, an experienced disability attorney can improve your chances of winning by:
- Preparing you to answer questions that the Judge may ask you at the hearing so that you can clearly describe the specifics of your medical impairments and limitations; and
- Working with you to obtain written witness statements from your friends and family, describing your medical condition and resulting limitations.
While there are no magical shortcuts to speed up the processing of your Social Security Disability benefit claim, an attorney can help you increase your likelihood of being approved for benefits at the early stages. This means less time waiting to receive your benefits.
4. What Other Income Offsets My Disability Insurance Benefits?
When you apply for long term disability benefits, you may not realize how offsets can decrease your payout amount. After all, your long term disability benefits will only be replacing a portion of your salary, not the entire thing. Regardless, offsets can cause you to lose a substantial amount of your benefits if they are too high. You could even be required to pay the money back to the insurance company. Let’s take a look at how offsets affect your long term disability benefits.
What Are Offsets?
Offsets refer to income that you are receiving either before or after your long term disability claim is approved. Examples are:
- Social Security Income – this can be a Social Security Disability (SSD) or Supplemental Security Income (SSI), or Social Security Retirement claim. This is the most common type of offset. If you are approved for long term disability, you may be required by the insurance company to file for SSD. Failure to apply may result in your benefits being canceled. Is this legal? It all depends on what your LTD contract says;
- Worker’s Compensation – If your disability has been caused by an injury on the job, you may receive worker’s compensation benefits in addition to long term disability benefits;
- State Disability Benefits – Some states have their own benefit policies, which would decrease the amount you would receive from your employer;
- Retirement Benefits – Benefits that you receive on behalf of a spouse. For example, Susan receives her husband’s retirement benefits since he passed away. She applied for long term disability for her myelofibrosis, but her benefits were less than expected due to her husband’s benefits offsetting her lost revenue;
- Sick Pay – Most employers have a sick-pay policy that allows for a certain number of days to be paid to the employee, even if they are not there. This can become an income problem if you have accrued too much sick leave. Although most employers will have you use up your sick leave before you can receive benefits if you do still have some sick pay left over when your benefits are approved, it will be calculated as income decreasing your payout for your long term disability benefits; and
- Third-party Payouts – This is when you receive a settlement from a third party that is responsible for your injury. For example, Mike is injured in a car wreck caused by a tractor-trailer. He sues the owner of the company and wins a settlement. That settlement is an offset to your long term disability benefits provided through your employer.
Why Do Offsets Exist?
Insurance companies make the argument that offsets help keep premiums low. Whether that is true or not, you should always check your insurance policy to determine what your financial obligations will be. Your insurance policy will briefly mention that your disability benefits may be decreased based on the number of offsets or additional income that you have. It may be just a couple lines buried deep within your policy, but it will have major implications on your claim.
Can I Prevent Offsets?
If you are covered under a group policy through your employer, you will not be able to prevent offsets. The policy negotiations are between your employer and the insurance company. However, if you have an individual policy, you have a little more wiggle room to negotiate the terms.
Beware of Back-Pay and Overpayments
Payments for benefits like Social Security Disability can take a while to process even up to 12 months. Most of the time, this “back pay” will come to you in one lump sum. Be cautious about spending it all right away. If you received your long term disability benefits and now have received back pay for the full amount from SSD, you will be required to pay back some of the money the insurance company paid you. They can require you to immediately return the money or decrease your benefits until you have paid them back. They even have the option of ceasing payment until you have paid them back in full.
Occasionally, a long term disability insurance company will miscalculate your overpayment. It is always a good idea to have a long term disability lawyer review the long term disability insurance company’s calculations. At the Ortiz Law Firm, if an insurance company asserts an overpayment we check the accuracy of the calculations before discussing repayment options with our clients.
What Should You Do If You Receive a Lump-Sum from Social Security?
The best thing to do if you receive a lump-sum payment from SSD or a settlement is to get advice from a long term disability lawyer. An experienced long term disability lawyer will have seen all kinds of cases and knows how to handle them.
5. What Does My Long Term Disability Denial Mean?
A long term disability denial doesn’t necessarily mean you’re not disabled — look at your denial notice to see the specific rationale for the denial in your individual claim.
Most LTD claims are evaluated by claims adjusters who work for the insurance company. Unfortunately, because ERISA regulations favor insurance companies, claims handlers routinely deny legitimate claims even where the medical evidence of disability seems to be clear.
Claims handlers deny disability applications on behalf of the insurance company for many reasons, some of which are legitimate and many more that are illegitimate. Understanding some of the reasons as to why claims are denied may help you prepare your best possible case. Once you have a better understanding as to why your claim was denied you will be in a better position to decide whether you need to hire a long term disability lawyer. Here are some of the most common reasons why LTD claims are denied.
Insufficient Medical Evidence
Here is a sample of the denial language used by Unum in a claim: “[T]he FCE findings were noted and evaluated during the medical review process. Based on our review findings, there are no exams, laboratory testing, specialty evaluation, medication changes or imaging to support the level of impairment [the claimant] describes and the decisions to deny benefits on her claims are appropriate.”
The most important part of an LTD case is your medical records. Here are some of the issues that typically come up in a claim with respect to medical evidence in support of the claim:
- Regular Medical Treatment: It is nearly impossible to win a long term disability case without obtaining regular medical treatment. Your insurer expects your claim to be well supported by medical records and will expect to see evidence of regular, ongoing visits to your primary care physician and other medical specialists (as appropriate). If you suffer from a mental/psychiatric condition (such as depression or anxiety), the insurance company will expect you to see a mental health provider, preferably a psychiatrist or psychologist, at least once a month. If you have a physical medical impairment, the insurance company will expect to see evidence that you are visiting the doctor on a regular basis and that your doctor is ordering objective tests, including x-rays, MRIs, or CT scans, whenever possible.
- Missing Medical Records: Disability claims are routinely denied due to insufficient medical evidence to support the claim. There may be several reasons why your medical records are not in your file. For example, your doctor’s records department may not have ever processed the insurance company’s medical records request. Or, the insurance company may have failed to request some of your medical records. You should periodically ask your disability carrier for a list of the records it has requested and a list of those it has received. If some records are missing, you should make sure that your insurer requests the appropriate records or even provide the records yourself.
- Doctor’s Statement: Perhaps the single most important evidence in a disability claim is the opinion of your treating physician. You (or your attorney) should ask your doctor to provide a detailed opinion as to your work-related medical limitations. Note: You should not rely on the Attending Physician Statement forms provided by your insurance company. These are often designed to elicit responses that would support a denial of the claim. Instead, you should give your doctor a Residual Functional Capacity form that is customized for your medical condition(s) or write a letter that details exactly how your impairment limits your work abilities. If your treating doctor refuses to support your LTD case, you should seriously consider finding a doctor who will.
Failure to Satisfy the LTD Policy’s Definition of Disability
The definition of the term “disability” is unique to each claim. You should always check your long term disability insurance policy for the exact definition of the term “disability” to see if you can meet it in your case. To make things even more complicated, the term “disability” changes over time. Most LTD insurance plans transition from “own occupation” to “any occupation” after a certain length of time. Most policies have an “own occupation” definition of disability for the first two years you receive benefits, and an “any occupation” definition after the first 24 months, or two years.
Under a typical “own occupation” LTD policy, you are considered “disabled” if you are unable to carry out the duties of your own individual occupation (this is your “own occupation” or “own occ” for short). An “any occupation” policy defines the term disability much more broadly. Under an “any occupation” (or “any occ”) standard, you are considered disabled if you are unable to perform the duties of “any” job.
Your long term disability policy may specifically exclude coverage for certain medical conditions. For example, medical impairments related to alcohol or substance abuse are typically excluded from coverage. Moreover, medical conditions that are based on subjective complaints rather than objective testing (such as depression, fibromyalgia, or chronic fatigue syndrome) may be limited to 24 months of benefits.
Pre-Existing Condition Exclusion
A typical Pre-Existing Condition Exclusion reads like this:
“A pre-existing condition limitation will apply during your first year on the plan or when you increase your coverage. If you received treatment, consultation, care or services; took prescription medication or had medications prescribed or had symptoms or conditions that would cause a reasonably prudent person to seek diagnosis, care or treatment in the three (3) months before your insurance or any increase in the amount of insurance takes effect, Prudential will not cover you if you become disabled from a disability that results from such pre-existing condition for a period of twelve (12) consecutive months from the date your insurance or your increased amount takes effect. After the twelve (12) month waiting period, a pre-existing condition(s) would be covered per the standard long term disability insurance policy.”
Under the above “pre-ex” exclusion, you would be “excluded” from coverage if: (1) you stopped work within one year of the insurance policy taking effect, (2) you stopped work due to a medical condition; and (3) you received medical treatment for that same condition in the 3-month period before the policy took effect.
For example, let’s say that you have a back pain disorder, but you found a job that could accommodate your condition on December 15, 2013. With your first paycheck, you see a back pain specialist on December 22, 2013, for treatment of your back pain condition. As part of your benefits package, you are eligible for long term disability coverage, effective January 1, 2014. Over the next several months, your back pain condition worsens and you stop working on October 1, 2014, due to limitations caused by your back. You file for LTD benefits. This claim would likely be denied under the “pre-existing condition” exclusion because: (1) you stopped working within 1 year of the LTD policy taking effect; (2) you stopped working due to a back pain problem; and (3) you treated for back pain during the three month period before the policy took effect (December 22, 2013, is between October 1, 2013, and December 31, 2013).
Video Surveillance Inconsistent with the Disability Claim
If you are in the process of filing an LTD claim or are already receiving LTD benefits, you should be aware that your insurance company may be conducting video surveillance on you. Insurance companies are willing to hire private investigators to record your activities to determine your level of impairment. If these investigators record you on tape performing activities that are inconsistent with your allegations of disability, your claim could be denied. Or, if you are already “on claim”, your previously approved claim could be terminated.
Be aware that the surveillance footage does not have to be directly contradictory to your diagnoses for an insurance adjuster to deny your claim. In other words, video recordings may be used to justify a disability denial even where the videotape does not actually prove you are not disabled. For example, let’s say you have been diagnosed with fibromyalgia. Many patients with fibromyalgia often report having “good days and bad days” with regard to their pain and limitations. If an investigator “catches” such an individual performing light yard work, this evidence could be used to justify a denial – even if the video was taken on a “good day.”
You should always follow your doctor’s advice with respect to any limitations placed on your activity level. If your physician has advised you to walk with a cane and avoid lifting more than five pounds, you should avoid walking without a cane and lifting and carrying heavy bags of groceries.
You should be aware that there are specific deadlines when applying for LTD benefits and when filing an appeal in your claim. Most long term disability insurance plans governed by ERISA give you 180 days to appeal an initial denial. Although this is almost six months, you should be sure to submit all medical evidence as soon as possible in the appeals process.
Note: Under ERISA law, federal courts are limited to considering only the evidence contained in the administrative record, so you should not wait until your case is in federal court to present medical records, doctor’s attending physician statement reports, third-party statements, or any other evidence helpful to your case. If the evidence was never submitted to your insurance company, it almost certainly will not be allowed in federal court.
You should use the 180 days to find and hire an experienced LTD attorney who will help gather medical records and other documentation to “stack the administrative record” with favorable evidence. If you miss the 180-day deadline to complete your appeal, you will not be allowed to sue your insurer in federal court because you failed to “exhaust” your administrative appeals. The deadlines should be identified in your decision letter. Look for any deadline on the notice of denial from your insurance company, and file your appeal as soon as you can.
6. How Does ERISA Govern Group Disability Claims Denials?
What is ERISA?
The Employee Retirement Income Security Act (ERISA) was originally enacted to protect employees’ rights to collect employee retirement benefits, particularly pension benefits. Over time, the courts expanded the reach of ERISA to cover other “fringe” employee benefits such as long term disability, health insurance, life insurance, and other benefits provided by employers.
You properly planned for the unexpected by purchasing LTD benefits. In fact, such insurance benefits are one of the only things we will ever buy that we hope to never use. You probably filed a claim for benefits only to be shocked to learn that insurance companies and ERISA administrators regularly deny benefits to claimants who are disabled.
Fighting to obtain and maintain ERISA LTD benefits requires a deep and thorough understanding of a very complicated area of law. It is very easy to make mistakes that will totally destroy your opportunity to ever receive disability benefits.
Federal ERISA Laws and Regulations are Different Than State Laws
Federal ERISA claims are much different than state law breach of contract claims. Once the internal appeals are completed (or “exhausted”) and a lawsuit is filed, you cannot submit additional evidence in an ERISA claim. The federal court considering the lawsuit must limit its review to the administrative record (i.e. the long term disability claim file). Under ERISA LTD laws and regulations, there are no trials, depositions, or hearings. The claimant is not allowed to testify on his or her own behalf. The claimant’s treating physicians are not allowed to testify. There are no third-party witnesses. The claimant cannot introduce evidence that was not in the claim file at the time the insurance company issued its final decision. In other words, the Court limits its review to the medical and vocational proof already in the claim file.
Standard of Review
In most ERISA-governed long term disability cases, federal courts are required to defer to the insurance company’s decision so long as there are a rational basis and reasoned explanation for the denial or termination of benefits. In fact, the federal court will overturn the insurance company’s denial only if the claimant is able to prove that the denial was “arbitrary and capricious.” This is the highest burden of proof in civil cases and is far more difficult to meet than the typical “preponderance of the evidence” standard in a civil claim; this burden of proof is far more similar to the “beyond a reasonable doubt” standard in criminal cases.
The Insurance Company Is Not Bound By Findings of Other Insurance Companies or Governmental Agencies
Insurance companies must consider a favorable disability determination by the Social Security Administration as part of its review; however, case law across the country is clear that insurers are not bound by that determination. The insurance company is allowed to make its own independent determination. If it does not follow Social Security’s disability findings, the insurance company must explain why it is not also making a finding of disability.
What Civil Remedies Are Available?
Under ERISA, the most the court can do is award the claimant his or her past-due disability benefits and have their monthly disability check reinstated. In a state law breach of contract claim, a claimant may be eligible to receive consequential, bad faith, or punitive damages; however, these types of damages are not available in ERISA claims. An ERISA claimant may seek attorney fees, but they are rarely recovered. As you can see, LTD law is stacked heavily in favor of insurance companies to the detriment of claimants.
ERISA Law is Complicated
ERISA long term disability insurance claims are complicated. They involve short deadlines and are governed by complex federal laws and regulations. Many of the legal guidelines for ERISA claims are created by case law that applies to each federal circuit.
Here are some of the most common pitfalls claimants come across in ERISA LTD cases:
- Failing to provide adequate evidence of the disability;
- Failing to appeal in a timely manner; and
- Failing to recognize that you often only have one chance to appeal, and if the appeal is denied, a court’s review is limited to the evidence that was submitted to the insurance company.
When you are sick or injured, you have your health to worry about. In trying to get better, you may not understand each and every one of the complicated procedures that are often required to obtain LTD benefits. Insurance companies seize upon this disadvantage and regularly deny benefits to people who have a real and significant disability. The insurance companies are skilled at using the complicated and one-sided ERISA rules and regulations in their favor.
What Does a Federal Judge Who Considers ERISA Claims Have to Say?
We aren’t the only ones who think that it is beneficial to hire an attorney to assist you in an ERISA long term disability claim. Here is a comment from a Federal Judge:
“Having recognized the difficulties posed by Plaintiffs position, the Court also recognizes that ERISA claimants may not have the advantage of legal advice or favorable referrals before the administrative process is complete, placing such claimants at a distinct disadvantage if discovery is not permitted on judicial review. For ERISA claimants not able or aware enough to hire legal counsel before the administrative process is complete, they likely enter into judicial review facing a loaded deck—a deck loaded with the expert opinions of those hired by the plan administrator and, with the possible exception of a treating physician or two, lacking the opinions of vocational or medical experts hired by the claimant.”
Abromitis vs. Continental Casualty Insurance Company / CNA Insurance Companies, 261 F.Supp.2d 388, 391 (2003).
7. Buyouts v. Settlements in Long Term Disability Cases
We’re going to separate out buyout offers, which are offers that are made by the insurance company while you are receiving long term disability benefits, and settlement offers. Settlement offers occur when you’ve been completely denied benefits and you’re trying to negotiate a settlement with the insurance company either right before filing a lawsuit or after filing a lawsuit.
This distinction is very important. Let’s go back to buyout offers for a moment.
Buyouts are only when the insurance company has acknowledged that it’s supposed to be paying you benefits and is paying you benefits, but they want to give you a one-time lump sum settlement to buy you out. In the long run, this will save the insurance company money that it would have otherwise paid over the lifetime of the claim. Because they have acknowledged that they are supposed to be paying you benefits, they may offer to pay a higher percentage of the total value of the claim.
A lot of people go online, and they read about how when you receive a buyout offer from an insurance company, you may be able to receive 50, 60, 70, even 80% of the total value as a settlement as part of the buyout. Those percentages are totally different in a situation where the insurance company has denied your claim and you’re trying to obtain a settlement.
Let’s give you an example: You’ve had to sue the insurance company to get your benefits, and you’re about to go to mediation. In that type of situation, we have oftentimes seen that the insurance company is only willing to settle that claim for less than 50%. A lot of people come to us and say, “But wait a minute, I did my own research online. I see that insurance companies will settle cases for 50 to 80%.”
We then have to explain to them that the situation is totally different because the 50 to 80% range only applies when they’re already paying benefits like they’re supposed to. In the latter situation, in litigation, they’ve already said that they don’t think they should be paying benefits. As a result, those claims have a lower value and typically settle than less than 50%.
Again, those are situations where the person is already receiving benefits. This is all very highly technical. If you have received a buyout or settlement offer you should not make a decision without consulting with an attorney about the individual circumstances of your case.
8. Why Should I Hire a Long term Disability Lawyer?
So why should you hire a long term disability lawyer? Nick Ortiz addresses this below:
At the end of the day, insurance companies like to collect premiums but they do not like to pay out on claims. You need to do everything you can to satisfy your burden of proving you are disabled so the insurance company pays you the benefits you deserve. Your HR contact may offer to help you, but HR representatives are not always aware of the time limits and amount of proof necessary to support an LTD claim.
Managing an appeal on your own can be risky if you are not physically or mentally capable. If the case becomes too complicated to handle on your own, you may want to seek out advice from a professional. Nick A. Ortiz is an experienced long term disability lawyer who is compassionate and dedicated to the rights of those whose LTD benefits have been wrongfully denied or terminated. To see if you qualify for a no up-front cost contingency fee arrangement with an experienced LTD attorney complete the consultation request form on this website today. Most inquiries are responded to within 24 hours of submission
What Will Hiring a Disability Attorney or ERISA Lawyer Cost Me? Long Term Disability Lawyer Fees
Here are three primary ways disability insurance lawyers earn a fee in Long Term Disability or ERISA claims:
- On a “Contingency Fee” basis. A contingency fee means that you do not have to pay any fees upfront to retain the attorney, and the attorney only earns a fee with a successful outcome in the case. The fee is contingent upon recovery. The attorney is paid a percentage of the recovery, typically between 25% and 40%.
- Other attorneys are paid on an hourly basis for an agreed-upon hourly rate. Such fees are typically paid whether you win or lose the case.
- A few attorneys will accept the entire case for one set “flat fee”.
There are many variations within the three categories above. For example, in category two, the attorney may not ask for anything upfront and bill you once a month. Or, the attorney may request a large retainer up-front, drawdown fees from the retainer, and ask that you always have a minimum amount of fees in the retainer.
The best choice of attorney fees for you really depends on the specific needs of your individual claim.
Administrative Appeals and Filing a Lawsuit
The Ortiz Law Firm handles most Long Term Disability and ERISA claims on a contingency fee basis. The “contingency” that must occur is that you must recover benefits in order to have a fee. In other words, you do not have to pay a fee if there is no recovery in your claim. However, Mr. Ortiz does accept some cases on an hourly basis, depending upon the circumstances.
At the Ortiz Law Firm, we charge a percentage of your past-due benefits and a percentage of your future benefits for 12 months if you are put “on claim” during the internal appeal process (i.e., before going to court). If we must file a lawsuit and your disability claim is settled in court for a “lump sum”, then we charge a percentage of the total settlement amount.
Negotiating Lump Sum Settlements
In Florida, most attorneys charge 40% of all money recovered in a lawsuit. That percentage applies whether the claimant is put on claim (approved for on-going monthly benefits) or is given a “lump sum” settlement with no on-going payments. At the Ortiz Law Firm, if a disability claim settles for a lump sum then the attorney fee is only 33 1/3% of the lump sum payment.
Negotiating Buyout Offers
In some disability claims, the insurance company will offer claimants a lump sum payment or settlement so that the insurance company does not have to pay monthly benefits. The lump-sum offer may be 50%, 60%, 70%, or more of the total value of the claim.
The Ortiz Law Firm does assist some claimants in negotiating a buyout offer. We are different from most firms, however, in that we do not charge a fee on the entire settlement amount. Instead, our fee is applied only to any settlement above and beyond what the insurance company offered you before our involvement.
For example, let’s say the insurance company offered $50,000.00 to buy out the policy. You come to us and we negotiate the amount up to $75,000.00. We do not charge a fee on the entire $75,000.00. We would charge a fee of $25,000.00, the difference between the final amount and where you started ($75,000.00 minus $50,000.00). If we are unable to negotiate for a higher amount there will not be an attorney fee.
If you have any questions about the attorney’s fee in these types of disability claims, our best advice is to pick up the phone and ask Mr. Ortiz your questions.
9. Can a Long Term Disability Lawyer Speed Up a Case?
An attorney can “speed up” an LTD claim only with respect to how quickly he (or she) can put together a good and effective appeal package. It does not do a client any favors to use up the entire 180 day appeal period before filing the appeal.
We know time is of the essence for our clients. They are not working and they are not receiving their benefits. That is why we try to file the appeal as quickly as possible. Many of our appeals are filed approximately 45 to 60 days after we are hired.
Mr. Ortiz explains why you are given 180 days to appeal below:
10. Protect Yourself by Hiring a Long Term Disability Lawyer
The most important reason for hiring a long term disability lawyer is that they can help you develop the evidence that will be critical down the road if and when a lawsuit needs to be filed. This is especially important because of ERISA. This act specifies that if you have a lawsuit that goes against an insurance company, then the court can only consider what’s in the administrative claim file at the time that the insurance company made its decision. This means that you need to get in all the evidence that you potentially think that you might use in a lawsuit during the appeal process because you will not be allowed to introduce any new evidence in the lawsuit.
Most people, when they file an appeal, it’s really basic. We’re talking a one or two paragraph appeal that basically says, “Look, insurance company. I really think you got this one wrong. I think there is more than enough evidence to support my case. I want you to go back, take another look at it, and I think you will see that there’s enough evidence to approve me. So, I hereby appeal, go back and take another look at it.”
Now, that is wholly insufficient.
When we prepare an appeal the very first thing that we do is request a copy of your insurance policy to determine what your rights and responsibilities are, in terms of proving up your case. The next thing that we do is request an entire copy of your claim file. We then take that claim file, break it down, and we reverse engineer it to determine what we need to provide to the insurance company. That way we can work with you to strategize and get updated medical records and, perhaps, custom forms or letters from your doctors to address the reasons why the insurance company denied your case. Nick Ortiz explains the importance of using custom forms in the video below:
That’s just one part of it. Another thing that we do is work with you to obtain your statement, typically in the way of an affidavit, or what we call a sworn statement. In the statement, we identify what your impairments are, and not just what your impairments are, but what your limitations are a result of. That is additional evidence that we can use to show the insurance company why it is you can’t do your job. This is a new piece of evidence that may get the insurance company to change its mind.
Finally, we do a comprehensive legal analysis, where we take the reasons why they denied you, which should be set forth in the denial letter, and we show why their reasons are insufficient as a matter of law. We may cite legal cases to compare your case to others where the insurance companies may have made similar mistakes in the past. Just to give you an idea, our appeals tend to be anywhere from 16 to 20 pages long with a summary of all your medical records, all the opinion evidence, and all the legal reasons why we think their decision is insufficient. That’s a lot different than a simple one or two paragraph appeal. Nick Ortiz goes into more detail as to what an attorney will do to help in the administrative appeal process below:
The Ortiz Law Firm has assisted numerous clients in recovering benefits following a long term disability insurance denial or termination of benefits. We have experience in handling internal administrative appeals directly with insurance companies and we have prosecuted numerous ERISA lawsuits in federal court against LTD insurance companies. We are available to help you anywhere in the country and we will strive to make the process as easy as possible for you.
Consult a Long Term Disability Lawyer Today
During an already difficult time both personally and financially, finding and hiring an attorney may seem overwhelming. While the process can be daunting, your experienced disability attorney will be able to guide you through the process. They do not get paid until you win your case. You can seek help without worrying about upfront costs or unexpected bills. When an insurance company has denied your benefits you need a knowledgeable and aggressive advocate who can pick up your fight and obtain the compensation you deserve. Working with an experienced disability attorney will give you the best chance of getting the benefits you deserve. Even if you have been denied benefits, that does not mean your fight is over. Many people are denied benefits the first time they apply. You have the right to file an appeal and to try to get more information that may help your case. Getting expert help is often the difference between being denied and being approved for benefits.
We help disability claimants receive the long term disability (LTD) insurance benefits they are entitled to receive. If you have been denied benefits, we can help prepare and file your administrative appeal with the insurance company in an effort to maximize the chances that your LTD claim will be approved. If your benefits have been cut-off or terminated, we can help prepare the appeal to have your benefits reinstated. If you have exhausted your administrative appeals with the insurance company, we may be able to file a lawsuit against the insurance company. We handle both group disability claims that are typically governed by ERISA regulations, as well as individual disability insurance (“IDI” or “DI”) policy claims.
The Ortiz Law Firm has successfully represented people in disability cases across the United States. If you would like to talk to an experienced disability lawyer call us at (866) 853-4512. We would be happy to evaluate your case and to discuss how to help you through the appeal process.