Insurance companies approve many claims at the initial application stage. However, many claims are prematurely terminated or cut-off. Even if your Long Term Disability (LTD) claim is initially approved, your insurance company can terminate your monthly benefit payments for a number of different reasons. It is important to be familiar with the most common reasons that LTD benefits are cut-off so that you can fight for your right to continue to receive benefits for as long as you remain disabled.
Each LTD insurance policy is different and your disabling medical conditions are unique to you, so it is likely that not everything that follows will apply to your claim. For these reasons, you should not take anything said here as legal advice and you should consult with an attorney to discuss your individual case.
Change in Definition of Disability After 24 Months: Transition from “Own Occupation” to “Any Occupation”
Most group LTD policies contain a provision that changes the definition of the term “disability” after 24 months. In order to be eligible for long term disability benefits during the first 24 months, most LTD insurance policies employ an “Own Occupation” standard; namely, the claimant must be unable to perform the Material and Substantial Duties of his or her regular occupation due to a physical or psychological impairment.
After the initial 24-month period, a claimant may be eligible for continued benefits if he or she is unable to perform, with reasonable continuity, the Material and Substantial Duties of Any Occupation. A typical LTD policy defines “Any Occupation” as “any occupation that the claimant is or becomes reasonably fitted by training, education, experience, age, physical and mental capacity” to perform. Most courts have interpreted such language to mean that if you’re medically capable of performing virtually any job that exists in the economy, your LTD benefits may be terminated. This determination does not usually take into account whether such jobs are available, only that they exist.
Even if an LTD insurance company agreed to pay benefits because it found the claimant could not perform the material duties of his or her own occupation, the insurance company may find that the claimant can perform other work and cut-off benefits at the 24-month mark under the broader “any occupation” standard.
Time Limitation on Mental / Nervous Conditions and Disabilities Diagnosed by Subjective Complaints
Most group policies have a 24-month limitation for claims involving disabilities arising from mental, nervous, and psychological impairments. If you are receiving LTD payments due to depression, anxiety, post-traumatic stress disorder, agoraphobia, obsessive-compulsive disorder (OCD), or a similar impairment, you may be limited to receiving 24 months of benefits. However, if you are institutionalized or confined to an inpatient treatment facility when your 24 months expire, most insurance companies will continue to pay benefits until you are no longer hospitalized, subject to a cap.
Note: The rationale behind this two-year limitation (from the insurance company’s point of view) is that many of these mental/nervous impairments can be exaggerated or outright faked. While this policy does keep insurance policy premiums lower than they otherwise would be, this provides little comfort to those LTD recipients with bona fide mental illnesses whose benefits are terminated after only two years.
There are often (but not always) exceptions to this time limitation for organic mental disorders like dementia and organic brain disease, and perhaps even for mental illnesses such as schizophrenia and bipolar disorder. You must look to the specific language in your policy to determine what conditions are subject to the two-year limitation (and to determine which conditions are exempt from this 24-month limitation).
Some policies also have a two year for chronic pain conditions such as arthritis and chronic back pain, and for medical conditions that are primarily diagnosed based on “subjective” complaints, including chronic fatigue syndrome, neuromusculoskeletal and soft tissue disorders, and/or fibromyalgia. Again, some insurance policies may carve out exceptions to this limitation. For example, I’ve seen a MetLife policy that has a 24-month limit on neuromusculoskeletal and soft tissue disorders, except where there is certain objective evidence. Here is an excerpt from that policy:
Neuromusculoskeletal and soft tissue disorder including, but not limited to, any disease or disorder to the spine or extremities and their surrounding soft tissue; including sprains and strains of joints and adjacent muscles, unless the Disability has objective evidence of:
- Seropositive arthritis;
- Spinal tumors, malignancy, or vascular malformations;
- Traumatic spinal cord necrosis; or
Finally, disabilities caused by alcohol or drug abuse will almost always be subject to the same 24-month limitation.
Cessation Due to Medical Improvement
Another common reason benefits are terminated is because there has been medical improvement and the claimant is no longer disabled (or the insurance company finds there has been sufficient medical improvement). In order to terminate benefits due to medical improvement, there must be substantial evidence showing that medial improvement which is related to the ability to work. That is, the claimant must have improved to the point where he or she is now able to return to work.
In short, to find medical improvement there should be both a decrease in the severity of the impairments present at the time of the most recent favorable medical decision and an increase in the individual’s functional capacity to perform work activities. The medical improvement should obviously be related to the individual’s ability to work. The medical improvement is related to the ability to work when it results in an increase in the claimant’s functional capacity to do basic work activities. If the improvement is not related to the claimant’s ability to work, or if the medical improvement does not enable the claimant to engage in work activity, benefits should not be terminated.
Failure to Apply for Social Security Disability Benefits
Most LTD policies require the claimant to apply for Social Security Disability Insurance (SSDI) benefits. That’s because insurance companies are allowed reduce your LTD payments by applying an “offset” of SSDI payments against the LTD benefits. In other words, the monthly LTD benefits will be reduced by the amount of monthly SSDI benefits. Because of this “offset” provision, the insurance company has an express interest your Social Security disability claim being approved. Thus, if you fail to file a claim with the Social Security Administration, your LTD benefits could be terminated.
Failure to Continue Medical Treatment
LTD policies require you to submit continuously updated proof of your disability. You may satisfy this proof as easily as providing updated medical records. Or you may provide evidence of an annual or semi-annual re-certification by your doctor that you continue to be disabled. Or you may be required to attend regular “independent medical examinations”.
As you may surmise, one of the most common reasons LTD benefits are terminated is that the claimant failed to receive regular, ongoing medical treatment. That’s why you should continue to obtain medical treatment even if your doctor has told you there’s “nothing else” the doctor can do for you to improve your medical condition. Even if there is “nothing more” that can be done for you, you should continue to go to the doctor to produce the evidence that your condition continues to be so serious that you are disabled. If you completely stop going to see the doctor, your insurance company may interpret your lack of treatment as proof that your condition has improved.
Because it is costly to conduct video surveillance, the LTD insurer will likely conduct surveillance at a time when it knows where you will be.
For example, if you provided the insurance company with a daily log of your activities to support your claim and the log shows you go to church every Sunday at 11:00 a.m., they may decide to follow you on a Sunday because they know that you will be leaving your home. Or, if you advised them of the date and time of your next doctor’s appointment, they may send someone to follow you on that day. Likewise, if the insurance company has arranged for an “independent” medical examination for you, they may send someone to conduct surveillance on that day. The insurance company may hire the surveillance company to follow you a few days before or a few days after such times. That way they have a comparison point.
Surveillance may include following you for the entire day while you are on your daily errands, following you to doctor’s appointments, parking outside your house, and recording you. Long Term Disability claimants (and recipients) should exercise extreme caution when interacting with anyone they suspect to be an investigator. If you are observed participating in activities that are inconsistent with your medical impairments, the insurance company may find that your condition has improved and may discontinue your benefits.
Reaching the Maximum Age For Benefits
Most LTD benefits end when the claimant reaches retirement age (typically 64, 66 or 67) or upon the claimant’s death. If you are over 60 when approved for LTD, your benefits may continue past 65, 66 or 67, but generally only for a few years. The specific terms set out in the Maximum Benefit Period chart in the LTD policy will dictate when the benefits expire.
The Claimant’s Return to Work
Working while receiving LTD benefits can also cause payments to stop. However, some LTD policies allow the claimant to work and receive benefits so long as that claimant is only capable of earning substantially less than his or her pre-disability wages. Again, the policy will dictate the maximum amount of work allowed (if any) to continue receiving benefits.
Legal Representation in Long Term Disability Insurance Claims
Although based in Florida, the Ortiz Law Firm represents claimants across the United States. If your LTD claim has been wrongfully denied, delayed, or terminated and you’d like to speak to an experienced Long Term Disability Insurance Attorney contact us at (866) 853-7703 to schedule a consultation. We can help you evaluate your claim to determine if you will be able to access Long Term Disability Benefits and how to move forward with the process.