With the country in a state of emergency due to the widespread COVID-19, many people have found themselves laid off from work indefinitely. The days are turning into weeks. The weeks are turning into months. People have exhausted their savings and now have to look for other ways to pay their bills. This situation is causing a rise in unemployment and disability claims across the country. In this article, we will highlight the causes of rising unemployment and disability claim numbers, how this will affect your claim, and what you can do to build a strong claim.
Why So Many Unemployment Claims?
The number of people applying for disability and unemployment benefits is on the rise again. With the uncertainty that COVID-19 is causing our economy, the number is likely to grow continuously until the government has a better handle on the situation. Across America, stores are closing their storefronts, using online options, pick up only options, or closing altogether. Florida Governor Ron DeSantis has closed all the beaches in Florida, which is having a negative effect on businesses like hotels, restaurants, and bars that depend on the tourism income to stay in business. Closures like these are happening all across the country.
The Recession Effect
A recession is the biggest cause of the rise in unemployment and disability claims. A study conducted by a group of economists in 2015 measured the number of claims during The Great Recession from 2006 to 2012. The results of the study showed that the number of unemployed people rose, and so did claims for unemployment and disability. The data also showed that 99% of all disability claims were denied on the initial filing. This was an effort to separate the people who were genuinely disabled from the people that were looking to supplement their income during the recession.
The Pandemic Effect
With so much uncertainty, unemployment claims have been spiking, especially in the areas hit the hardest by COVID-19. The director of the labor bureau in NY reported that the unemployment hotline received 7.8 million calls last week. They are facing a massive backlog of claims by bartenders, waitresses, and other service industries that are concerned about how long they will be out of work and how they plan to cover rent.
This isn’t the first time a pandemic has caused a crisis. During the 1918 Influenza Pandemic, tens of thousands of people died, and millions were affected. A research report called Economic Effects of the 1918 Influenza Pandemic, written by Thomas Garrett, Economist for Federal Reserve Bank of St. Louis in 2007, recalls the way people became unemployed following the flu outbreak. In eerie detail, it nearly mimics the COVID-19 pandemic that we are dealing with today.
You also see a trend of Conditional Applicants. These are people who suffered from underlying health problems but would prefer to continue to work, so they put off whatever surgeries or other treatment plans their doctors are recommending. These applicants would most likely qualify for benefits and now have decided it’s time to file since they are out of work.
However, the claims process is long and tedious. Data shows a high level of claims denied, which is interpreted as correlating to the high number of workers applying. Many applicants abandon the process and return to the workforce because of the strict application process and no work policies.
During this period of social isolation, the CDC is recommending that people stay indoors. For people who already have a mental illness like depression and anxiety, this can be a trigger that sends them into a mental health crisis. Social isolation in the older population is more severe. Social isolation is known to have adverse effects on your heart, lungs, and joints. As more people experience mental health issues due to this period of unemployment and isolation, we can expect a rise in claims accordingly.
The Medical Advancement Effect
The advances in modern medicine continue to improve the overall quality of life for millions of people every year. But just because you were able to survive an injury or illness that would have otherwise killed you 50 years ago doesn’t mean that you are symptom-free. Soldiers returning from war with limbs missing and traumatic brain injuries still suffer from lifelong struggles with finding meaningful work. Older adults that have joint replacement surgeries may still live with chronic pain.
How Will This Affect You?
Historical data shows that during a significant economic crisis, a disproportionate number of disability claims will be denied the first time they are filed. This is a calculated effort by the government and insurance companies to weed out the people who are only filing as a way to have income temporarily and are not truly disabled. A person who is genuinely disabled will probably be denied as well. Disabled workers can expect to endure more denials, longer wait times for approval, and lots of claim scrutiny.
Can I Apply For Unemployment and Disability Benefits?
The simple answer is yes. But the two programs have different goals, so you are unlikely to qualify for both. Unemployment benefits are designed for people who are able and willing to work, but they have lost their job through no fault of their own. Social Security Disability benefits are intended for people who can no longer work because of an injury or illness whereas short and long term disability benefits are designed for people who cannot currently work due to an illness or injury but hope to return to the workforce if they recover to the point that allows them to work.
It’s unlikely that your claim will be approved for both at the same time. If you are currently receiving unemployment, and you have an active disability policy, you can still file a claim. Note: Most disability policies are group policies that are provided by your employer. If you are no longer employed, you may have lost coverage. However, some policies have an extended period of coverage, so it’s best to obtain a copy of your long term disability policy from your human resources department. After you file for disability, you will may need to notify the Department of Labor that you are no longer able to work.
Problems With Applying for Both Unemployment and Disability Benefits
There are a couple of problems that can arise from you applying for both unemployment benefits and disability benefits.
The first problem is your disability insurance provider may use your unemployment benefits claim against you. If you are receiving unemployment benefits, then you are essentially stating that you are ready, willing, and able to work. So if that is the case, you don’t need long term disability benefits. Likewise, your state unemployment agency may assume that you are dishonest about your ability to work because you have applied for long term disability benefits. This problem could jeopardize both your claims.
The second problem is the offsets. When you receive long term disability benefits from a private insurance company, they have the legal right to use offsets when issuing your monthly payments. Offsets are defined as “other income from other sources.” Examples would include SSI benefits, third-party settlements, and unemployment benefits. An example of this would be you are approved to receive $1,000 a month for long term disability. You are currently receiving $120 per week through unemployment benefits. Since you are now receiving an estimated $480 per month in unemployment, your check for long term disability will only be $520 instead of $1,000.
Exception for Partial Disability
There is an exception to this rule. If you are receiving partial benefits for long term disability, then you may qualify for unemployment and disability under the pretext that you are only partially disabled.
How to Build A Strong Claim
Keep A Journal
Keeping a detailed log of everything surrounding your disability is very important. When insurance companies are receiving thousands of calls a day and handling just as many initial claims, things tend to get lost. If you have a written record of your symptoms, your phone conversations, your emails and letters, and your appointments, you will be able to answer any questions the insurance company may have, which is critical to building a strong claim.
Consult An Attorney
With so many variables in getting approved for a disability during a time of high unemployment, the best thing you could do is consult with an experienced disability attorney. Experienced disability attorneys do not get paid unless you do and have been through recessions before. They know how to navigate the complicated claims process for you.
Expect Longer Wait Times
Due to the COVID-19 pandemic, doctor’s offices and hospitals are packed with people trying to be tested and treated for COVID-19. This is causing a large number of cancellations for non-essential (not life-threatening) surgeries. Lab testing for anything other than COVID-19 has been made a low priority. So you can expect your wait times to be much longer to receive lab results, have surgery, and get your paperwork to your disability insurance company.
If you are filing a new claim during a period of high unemployment, consult with an experienced disability attorney to help you build a strong claim. The Ortiz Law Firm offers a free consultation with no obligation to use our firm. Call (866) 853-4512 and let us help you move your claim forward.